HomeMy WebLinkAbout26 AT&T (PROJECT LIGHTSPEED) 09-05-06 AGENDA REPORT MEETING DATE: SEPTEMBER 5, 2006 TO: WilLIAM A. HUSTON, CITY MANAGER FROM: CITY ATTORNEY SUBJECT: AGREEMENT WITH PACIFIC BELL D.BA AT&T CALIFORNIA REGARDING VIDEO SERVICES (PROJECT L1GHTSPEED) SUMMARY: AT&T has launched a project in the City to upgrade its communications facilities to provide video services. The City Code requires providers of video services to obtain a franchise, pay a franchise fee, and comply with other regulations. AT&T claims that its video service is a telecommunications service that is not subject to regulation by the City under its cable franchising regulations. Instead of a franchise agreement, AT&T proposes to enter into the attached Video Services Agreement, which preserves the rights of the parties in the event legislation in the State or the U.S. Congress affects the terms of the Agreement. RECOMMENDATION: Reject the proposed agreement unless AT&T agrees to provide sufficient support to carry the City's local governmental programming on their video services system. FISCAL IMPACT: In the proposed agreement and impending State and Federal legislation, AT&T will be responsible for paying 5% of gross video service revenues to the City. The City currently collects approximately $500,000 per year in cable television franchise fees from Cox Communications and Time Warner based on a 5% franchise fee on the cable companies' gross cable services receipts. The cable companies further provide equipment support to carry the City's live governmental programming in their systems, which AT&T is not fully willing to do. BACKGROUND: SBC, now merged with AT&T and using the AT&T brand, has launched a project in the City to upgrade its communications facilities to provide video services. The City Code requires providers of video services to obtain a franchise, pay a franchise fee, and comply with other regulations pertaining to customer service standards, support for governmental programming, and the extension of facilities throughout all residential areas (anti-red lining or anti-cherry picking). Page 2 AT&T claims that its video service, which will be delivered on demand through the Internet networking protocol, or "IP," which it calls an "IP-enabled Video Service," is a telecommunications service that is not subject to regulation by the City under its cable franchising regulations. After months of discussion, AT&T is proposing to enter into the attached Video Services Agreement, which addresses many of the City's issues with respect to its management of the public rights-of-way, while preserving the parties' rights in the event that legislation currently being reviewed by the State Legislature and the U.S. Congress affects the proposed agreement. However, staff is not supportive of the proposed support for local governmental programming, and AT&T is not willing to consider the support requested by staff. DISCUSSION: On June 19,2006, the City Attorney provided the City Council information pertaining to AT&T's Project Lightspeed and on the proposed legislation that would preempt the City's regulatory authority over the phone company's entry into the video programming market using facilities in the City's right-of-way. After some discussion and a presentation by AT&T representatives, the City Council directed City staff to come back with a proposed agreement. The attached agreement addresses the issues outlined for the City Council in the City Attorney's June 19, 2006 report as follows: o Under Section 3(a) AT&T agrees to provide compensation to the City in an amount of 5% of the gross revenues collected by AT&T for its IP Video service. The proposed agreement incorporates the definition of "gross revenue" applicable to the Comcast Cable Television franchise. o Under Section 3(b), AT&T agrees to carry the City's noncommercial educational and governmental programming (EG), which include the carriage of televised Council meetings. AT&T and the City will work together to develop the technology necessary to convert the City's programming to work within AT&T's video protocol. AT&T will provide a one time cash grant to cover the City's initial costs of purchasing the necessary equipment to convert its EG content into a form that can be carried by AT&T's system. However, this may not be sufficient to support the carriage of the City's programming in AT&T's video services system as more fully explained below. Additionally, the City would be responsible for programming content. o Under Section 5(a), A T& T agrees' to refrain from discriminating between or among City residents, but AT&T would not agree to a firm date for build-out of their system in the City. Instead, AT&T agrees to provide its IP Video service to all areas of the City through satellite or other alternative technology that provides comparable content, service and functionality. Page 3 . Under Section 5(b), AT&T agrees to comply with the customer service standards adopted by the FCC, the State of California, and any additional standards mutually agreed upon between the City and AT&T. . Under Section 8, AT&T agrees to indemnify the city for any claims, injuries or damages arising out of their physical use of the City's right-of-way or the installation and maintenance of its facilities in the right-of-way. While the proposed agreement addresses most of the City's initial concerns, EG support is still an issue. AT&T proposes a one-time cash grant in an unspecified amount that cannot be negotiated at this time because AT&T has not disclosed the type of equipment which the City would need to deliver the City's programming content to AT&T for inclusion in AT&T's system. Furthermore, a one-time cash grant that only covers the initial acquisition cost of equipment will not be sufficient to support the ongoing carriage of governmental programming by the City in AT&T's system. Not only does the City currently not know what type of equipment it would need, but if the equipment includes computers or computerized systems, it may become obsolete in a relatively short time (computerized equipment is normally amortized over a three-year period). By way of contrast, Comcast (now Time Warner) and Cox provided the City with $100,000 each to purchase equipment and upgrade the video facilities in the Council chambers. The $200,000 was spent quickly. Furthermore, Time Warner and Cox agreed in their franchises to train City staff on the use of the equipment, and agreed to replace it during the term of the franchise should the equipment become obsolete or inoperable. In addition, Cox extended a fiber optic connection between City Hall and its service area to properly carry the City's governmental programming in their system at a substantial cost. This on-going support has proved vital to the City's ability to continue to carry live programming on the City's governmental channels over the cable television systems operated by Time Warner and Cox. The City has proposed to AT&T that the agreement substitute the following language at Section 3(b) of the attached agreement (the sentences in bold differ from the language in the attached agreement): (b) Public. Educational and Governmental Proarammina. GRANTEE shall designate and allow sufficient capacity on its network and GRANTEE will carry CITY's noncommercial, public, educational and governmental (EG) programming made available and delivered by CITY to GRANTEE. GRANTEE and CITY will coordinate to develop the technology necessary to convert CITY's EG programming to work within GRANTEE's IP enabled communications network video protocol. CITY will be solely responsible for all EG programming content. However, GRANTEE will provide and maintain all equipment necessary to enable the delivery of CITY's live EG programming to GRANTEE's network, including the carriage of televised Council meetings. CITY and GRANTEE agree that the cost of equipment Page 4 provided herein shall not be treated as, included in, or part of, the compensation provided for in Subsection (a) above. However, AT&T's counsel has advised us that they cannot agree to the language staff has proposed above. The Council should further note that the proposed legislation at the State and the COPE Bill at the Federal level would include a payment to the City of 1 % gross receipts fee (in addition to the 5% franchise fee) for Public, Educational and Governmental programming support, which may not be sufficient to pay for the costs of financing the initial purchase of necessary equipment, and ongoing maintenance, depending on the number of subscribers AT&T is able to sign up and maintain in the City. For the foregoing reasons, staff recommends that the Council reject AT&T's proposed agreement unless AT&T agrees to provide sufficient support to carry the City's local governmental programming on their video services system. Respectfully Submitted, OMAR SANDOVAL DEPUTY CITY ATTORNEY Enclosure cc: William A. Huston, City Manager Tim D. Serlet, Public Works Director Elizabeth A. Binsack, Director of Community Development Joe Meyers, Administrative Services Manager Douglas C. Holland, City Attorney CITY OF TUSTIN AT&T VIDEO SERVICES AGREEMENT THIS RIGHT OF WAY AGREEMENT, dated , is between the CITY OF TUSTIN, a municipal corporation of the State of California ("CITY"), and PACIFIC BELL TELEPHONE COMPANY, a California corporation doing business as AT&T California ("GRANTEE"). RECITALS WHEREAS, GRANTEE is in the process of upgrading its existing telecommunications network to provide an integrated Internet Protocol ("IP") enabled broadband platform of voice, data and video services, the video component of which is a switched, two-way, point-to-point and interactive service ("IP-enabled Video Service"). This network upgrade will involve the use of the CITY's public rights-of-way."); and WHEREAS, GRANTEE believes that the franchise it has from the state pursuant to Public Utilities Code 9 7901 ("Section 7901") encompasses this network upgrade, and that GRANTEE is not required to obtain a franchise or other authorization from the CITY to offer IP-enabled services including IP-enabled Video Services over its network within the CITY limits; and WHEREAS, CITY believes that the provision of IP-enabled Video Services by GRANTEE is beyond the scope of Section 7901 and is subject to CITY's local franchising authority; and WHEREAS, CITY wishes to conserve the limited physical capacity of the public right-of- way held in trust by it, and wishes to establish terms and conditions with respect to the use of the public right-of-way by GRANTEE; and WHEREAS, Both parties agree that the deployment of the network upgrade and the provision of IP-enabled Video Services should not be delayed by litigation to establish the scope of Section 7901 or the application of the CITY's franchise ordinance to IP- enabled Video Services; and WHEREAS, CITY and GRANTEE further agree that litigation to resolve this issue would be complex and protracted, and that it is in the best interests of both Parties and the residents of the CITY to reach a compromise of each other's positions and claims. AGREEMENT NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS AND CONDITIONS SET FORTH HEREIN, THE PARTIES ENTER INTO THIS AGREEMENT. (8/1/06) 515776.2 -1- AT&T Video Services Agreement SECTION 1. TERM. The term of this Agreement is five (5) years, commencing on , unless it is terminated earlier as provided for below or in Section 20. The term may be extended for a period not to exceed five (5) additional years upon mutual agreement of the Parties, and is subject to the following: (a) (b) The parties agree to consult in the event that, after the Effective Date, any court, agency, commission, legislative body, or other authority of competent jurisdiction issues a finding that limits the validity or enforceability of this Agreement, in whole or in part. Should the finding be final, non-appealable and binding upon either CITY or GRANTEE, this Agreement shall be deemed modified or limited to the extent necessary to address the subject of the finding unless either party, within thirty (30) days of receipt of the ruling, provides written notice to the other party of election to terminate, in which case this Agreement shall terminate within six (6) months or such earlier period as the parties mutually may agree. Where the effect of a finding is a modification, the parties shall enter into good faith negotiations to modify this Agreement in the manner which best effectuates its overall purposes and the intentions of the parties. Failure to reach a mutually satisfactory modification within ninety (90) days of the commencement of such efforts shall entitle either party to terminate the Agreement on the provision of thirty (30) days' written notice. Either party may request to negotiate a modification to this Agreement that shall take effect immediately after the thirty-sixth (36th) month of the term of this Agreement if at any time any action by a court, agency, commission, legislative body, or other authority of competent jurisdiction repeals, modifies or clarifies state or federal law with respect to the rights, duties, privileges, exemptions, immunities and or authority of either CITY or AT&T California as it existed on the Effective Date of this Agreement, in whole or in part, relative to the provision of the IP-enabled Video Services product which is the subject of this Agreement. In the event a party requests modification to the Agreement as provided in this paragraph, should the parties be unable to reach a mutually satisfactory modification within ninety (90) days of the commencement of such efforts, either party may terminate the Agreement on the provision of thirty (30) days' written notice. SECTION 2. RIGHTS GRANTED. CITY grants to GRANTEE a non-exclusive right, subject to the recitals, reservations, covenants, and conditions herein contained, for the construction, installation, maintenance, operation and removal of the IP-enabled communications network within the CITY's public rights-of-way that are located within the corporate limits of the CITY, subject to obtaining all required permits and approvals. SECTION 3. CONSIDERATION. (a) Compensation. During the term of this Agreement, GRANTEE shall pay to CITY a fee of 5% of the gross revenues from fees collected from each subscriber to (8/1/06) -2- AT&T Video Services Agreement 515776.2 GRANTEE's IP-enabled Video Services product delivered over the IP-enabled communications network in the CITY's rights of way; such product to be defined by GRANTEE prior to GRANTEE's marketing and offering it to subscribers in the CITY. The fee does not apply to non-video revenues or the non-video revenues of a bundled product containing IP video and non-video offerings. The fee will be identified and passed through on any subscriber bill by GRANTEE and all such fees collected will be forwarded to CITY quarterly on the last day of each quarter after collection. For purposes of this section, "Gross Revenues" shall mean all revenues received by GRANTEE, directly or indirectly, for IP-enabled Video Services provided to Subscribers in the City of Tustin using the Public Rights-of- way, excluding taxes, regulatory fees or other assessments collected for governmental authorities, bad debt expense, subscriber deposits and other amounts that may be excluded by applicable law. (b) Public. Education and Governmental Proqramminq. GRANTEE shall designate and allow sufficient capacity on its network and GRANTEE will carry CITY's noncommercial, educational and governmental (EG) programming made available and delivered by CITY to GRANTEE, including the carriage of televised Council meetings in a format compatible with GRANTEE's system. GRANTEE and CITY will work together to develop the technology necessary to convert CITY's EG programming to work within GRANTEE's IP enabled communications network video protocol. GRANTEE shall provide CITY a one time cash grant to cover the initial costs of converting CITY's EG content into a form that can be placed on the internet and uploaded onto GRANTEE's system. At its election GRANTEE may pass the grant amount onto its subscribers. CITY will be solely responsible for all EG programming content. (c) Emergency Message. GRANTEE will retransmit emergency alerts on its IP- enabled Video Services consistent with federal standards and in the event the CTIY declares a public safety emergency. SECTION 4. INSTAllATION CONCURRENT WITH SCHEDULED PROJECTS; DAMAGE/RESTORATION PAYMENT. GRANTEE shall make a good faith effort to perform any excavation or boring and installation of it IP Network facilities in coordination with the CITY's street improvement projects. SECTION 5. SERVICE STANDARDS. (a) Service Area. GRANTEE shall not discriminate between or among any group of individuals in the provision of its I P enabled Video Service because of the income of such group and will offer video services to all residential areas of the CITY within GRANTEE's service territory through the use of its network or (i) direct-to- home satellite service or (ii) another alternative technology that provides comparable content, service, functionality, within twelve (12) months of the effective date of this Agreement, except: (8/1/06) 515776.2 -3- AT&T Video Services Agreement (1) for periods during events reasonably beyond the ability of GRANTEE to anticipate and control, such as acts of God, incidences of terrorism, war or riots, labor strikes or civil disturbances, floods, earthquakes, fires, or explosions; (2) for periods of delays caused by the CITY; (3) in areas where developments or buildings are subject to claimed exclusive arrangements with other video services providers; (4) in developments or buildings that the GRANTEE cannot access under reasonable terms and conditions after good faith negotiation; (5) in developments or buildings that GRANTEE is unable to provide service for technical reasons or which require facilities that are not available on a commercially reasonable basis; and (6) in areas where the occupied residential household density is less than thirty (30) households per mile in areas passed by overhead facilities or fifty (50) households per mile in areas passed by underground facilities, provided that permission as may be required from the owner of the property is reasonably available, and provided that service to multiple dwelling units need be provided only on terms acceptable to Grantee consistent with the exceptions herein. (b) Customer Service. GRANTEE shall meet the customer service standards adopted by the Federal Communications Commission (FCC) (CFR 76.309), the State of California (Government Code sections 53054 et seq. (Cable Television and Video Provider Customer Service and Information Act) and 53088 et seq. (Video Customer Service Act)), and any additional standard mutually agreed upon between GRANTEE and the CITY. SECTION 6. INSTAllATION AND USE STANDARDS. (a) Conformance with Applicable Law. GRANTEE shall place, construct, install, own, control, operate, manage, maintain, or use its facilities in the public right-of- way by first obtaining all necessary or required permits, agreements, or approvals from CITY and all other governmental entities with jurisdiction over the facility or public right-of-way. GRANTEE shall maintain its facilities in compliance with such permits, agreements, or approvals, and all applicable statutes, ordinances, rules, regulations, orders, and decisions issued by any federal, state, or local governmental body, agency, or court. (b) Time. Place and Manner. GRANTEE's facilities shall be located, constructed, operated, and maintained in the time, place, and manner that causes the least interference with the public's use of the public right-of-way, and the rights or reasonable convenience of property owners who adjoin the public right-of-ways, all as determined by and approved by the City Engineer in conformance with the Tustin City Code, including, but not limited to, encroachment permits for street (8/1/06) -4- AT&T Video Services Agreement 515776.2 work, street excavation, use, removal and relocation of property within a street, and other street work, and design review of above ground cabinets and/or other similar facilities pursuant to Ordinance No. 1213, codified at Part 6 of Chapter 2 of Article 7 of the Tustin City Code. (c) Relocation/Removal. GRANTEE shall remove or relocate, without cost or expense to CITY, any facilities if and when made necessary by any change of grade, alignment or width of any street, sidewalk or other public facility, or other governmental use of the right of way. In addition, in the event all or any portion of said public right-of-way shall be needed by CITY or in the event the existence of GRANTEE's facilities shall be considered detrimental to the public health, safety, welfare, or convenience or to governmental activities, or is in conflict vertically and/or horizontally with any proposed CITY installation (for a governmental purpose), GRANTEE shall remove and relocate said facilities at their sole expense to such other location or locations on said public right-of-way as may reasonably be designated by the CITY in consultation with GRANTEE. Said removal or relocation shall be completed within a reasonable time frame as mutually determined by CITY and GRANTEE. In the event said facilities are not removed or relocated within the agreed-upon time frame, CITY may cause the same to be done at the sole expense of GRANTEE. (d) [Reserved] (e) Correction of Plans. Approval by CITY of the plans and specifications shall not release GRANTEE from the responsibility for or the correction of any errors, omissions or other mistakes that may be contained in the plans and specifications. (f) Malfunctionina Eauioment. GRANTEE shall remove and replace or repair any non-functioning or malfunctioning equipment within forty-eight (48) hours of receiving notice of the malfunctioning or nonfunctioning equipment as determined by the City Engineer. (g) Restoration Uoon Comoletion. Upon the completion of each installation or removal of equipment or facilities by GRANTEE under this Agreement, GRANTEE shall promptly restore all affected areas to a clean and safe condition, normal wear and tear excepted, and to new construction standards. The provisions of this section shall survive the expiration, completion or earlier termination of this Agreement. (h) Standard of Care. GRANTEE shall use and exercise due care, caution, skill and expertise in performing all work under this Agreement and shall take all reasonable steps to safeguard work site areas, including without limitation existing facilities and property. (i) Protection of Traffic. GRANTEE shall plan, organize and perform its work under this Agreement in the manner that results in the least amount of traffic disruption. GRANTEE shall provide all signs, barricades, arrowboards, lights, high-level flag trees, flag personnel and other devices, materials or personnel that may be (8/1/06) -5- AT&T Video Services Agreement 5157762 needed in connection with the safe and careful performance of the work allowed under this Agreement. 0) Protection of Other Utilities. GRANTEE shall not disturb or disrupt the operation or maintenance of any sanitary sewers, storm drains, gas or water mains, or other underground conduits, cables or mains in connection with the work to be performed or services to be provided by GRANTEE under this Agreement. (k) Repair or Replacements. GRANTEE agrees to repair or replace at GRANTEE's sole expense and to City Engineer's satisfaction any facilities or property that CITY reasonably determines has been damaged, destroyed, defaced or otherwise injured as a result of the work performed or services provided by GRANTEE under this Agreement. (I) Contact Number. GRANTEE agrees to provide a local or toll free public information telephone number to CITY for referral of any inquiries that may arise regarding the installation of GRANTEE's facilities. (m) Performance by CITY. In the event GRANTEE fails to perform any of its obligations under this Agreement within a reasonable period after delivery of written notice of such failure and CITY performs any work including, but not limited to repairing or maintaining the street improvements, CITY shall only be obligated to perform such work in a manner consistent with the standard practices of the CITY in performing street work and construction. CITY shall not be obligated to repair or replace any materials or improvements in a form or manner consistent with GRANTEE's plans and specifications, and CITY shall not be responsible for any damages to GRANTEE as a result of CITY performing such work, including, but not limited to, severance damages. GRANTEE shall reimburse CITY for its reasonable costs, including allocated overhead, of any work performed by CITY pursuant to this subsection. SECTION 7. SECURITY. Prior to the commencement of any work hereunder, GRANTEE shall furnish or cause to be furnished to CITY a good and sufficient bond, in the form approved by the City Attorney, entitled Performance Bond, for the minimum amount of One Hundred Thousand Dollars ($100,000.00), or such other comparable security instrument as approved by the City Attorney, securing the faithful performance by GRANTEE of all the terms and conditions of this Agreement; provided, however, that CITY shall not require GRANTEE to obtain a performance bond so long as (i) GRANTEE is not in default of any terms and conditions of this agreement or any permit issued by CITY; (ii) GRANTEE's contractors are adequately insured and bonded; and (iii) GRANTEE maintains its self-insurance retentions at levels reasonably satisfactory to CITY. SECTION 8. INDEMNITY. GRANTEE agrees to and shall defend, indemnify and hold CITY, its officers, agents, employees, and representatives harmless from all suits and causes of action, claims, charges, damages, demands, judgments, civil fines, and penalties or losses of any kind (8/1/06) -6- AT&T Video Services Agreement 51 ~776.2 or nature whatsoever, arising out of GRANTEE's physical use of the CITY's rights-of- way or GRANTEE's installation and maintenance of its facilities within CITY's right-of- way for all claims of any kind including without limitation, for damage or claims for damage for personal injury, including death, and claims for property damage that may arise directly or indirectly from this Agreement, GRANTEE's installation and maintenance of its facilities within CITY's right-of-way or damage to GRANTEE's facilities, except and to the extent caused by CITY's negligence, willful misconduct or criminal acts, including but not limited to those that arise out of : (1) the performance or the failure to perform the obligations in this Agreement by GRANTEE, or its contractors, subcontractors, agents, employees, or other persons acting on GRANTEE's behalf and, (2) the design, placement, maintenance, repair, or condition of GRANTEE's installation of its facilities within CITY's right-of-way. This indemnity and obligation to hold harmless shall apply regardless of whether or not CITY prepared, supplied, or approved plans or specifications or inspected any of the work or improvements installed and constructed pursuant to this Agreement. Specifically, and without limiting the foregoing, GRANTEE agrees to defend, indemnify and hold harmless CITY, and its officers, agents and employees and representatives from the following damages or claims for damages, except and to the extent caused by CITY's negligence, willful misconduct or criminal acts, including but not limited to those that arise out of: (1) any damage or claims for damage to GRANTEE's facilities caused by any excavation or work performed by CITY at or near the location of GRANTEE's facilities, (2) any indirect, special, punitive or consequential damages (including, but not limited to, any claim for loss of services) to GRANTEE, or any other person arising from any damage to GRANTEE's facilities, and (3) any damage or claims for damages resulting from damage to GRANTEE's facilities caused by third persons. SECTION 9. LIMITS OF CITY LIABILITY. In no event shall CITY be liable, under any theory, to GRANTEE for any damage to GRANTEE's facilities caused by any excavation or work performed by CITY at or near the location of GRANTEE's facilities except and to the extent caused by CITY's negligence, willful misconduct or criminal acts. Neither party shall be liable, under any theory, to GRANTEE for any indirect, special, punitive or consequential damages (including, but not limited to, any claim for loss of services). SECTION 10. INSURANCE. GRANTEE, at its sole cost and expense, for the full term of this Agreement, shall obtain and maintain at minimum all of the following insurance coverage: (a) Tvpes of Insurance and Minimum Limits. The coverage may be satisfied by any combination of specific liability and excess liability policies. (1) Workers' Compensation and Employee Liability Insurance in conformance with the laws of the State of California for the statutory limits. (2) GRANTEE's vehicles, including owned, non-owned (e.g. owned by Grantee's employees and used in the course and scope of employment), leased or hired vehicles, shall each be covered with Automobile Liability (8/1/06) 515776.::1 -7- AT&T Video Services Agreement (b) (c) (d) (e) (3) Insurance in the minimum amount of One Million Dollars ($1,000,000.00) combined single limit per accident for bodily injury and property damage. GRANTEE shall obtain and maintain comprehensive or commercial General Liability Insurance coverage and shall include, but not be limited to, coverage for premises operation, explosion and collapse hazard, underground hazards, contractual insurance, broad form property damage, independent contractors, and personal injury liability. The limit of such insurance shall be at least One Million Dollars ($1,000,000.00) combined single limit liability for personal injury and property damage. CITY may, by resolution, from time to time, reasonably increase said insurance to the amounts which other contractors operating within the public right-of-way in a manner similar to GRANTEE and operating in the jurisdiction of CITY are required to provide so long as said increased coverage is reasonably available. (4) CITY and its officers and employees shall be named as additionally insured by endorsement (except for workers' compensation) at no cost to CITY. Prior to commencement of any work, GRANTEE shall furnish proof to CITY that satisfactory policies of insurance described above are in place issued by companies licensed in California rated Grade "A" or better and Class VII or better by the latest edition of Best's Kev Ratina Guide. A Grade B will be accepted for workers' compensation. All insurance policies shall provide that in the event of material change, reduction, cancellation, or non-renewal by the insurance carrier for any reason, not less than thirty (30) days notice will be given to the CITY by registered mail of one (1) copy of a written notice of such intent to cancel or not to renew the coverage. An authorized agent of such insurance carrier shall provide to CITY, on such schedule as is reasonably requested by CITY, a certification that all insurance premiums have been paid and all coverage are in force. If for any reason GRANTEE fails to obtain or keep my of such insurance in force, CITY may, but shall not be required to, obtain such insurance, in which event GRANTEE shall promptly reimburse CITY's premium cost therefor plus one and one-half percent (1-%%) monthly interest thereon until paid. Upon evidence of financial capacity reasonably satisfactory to CITY, GRANTEE'S insurance coverage obligations hereunder may be established in whole or in part by an established self-insurance program. SECTION 11. CITY'S OBLIGATIONS. (a) CITY agrees to review the construction and installation of the network upgrades subject to the same process it applies to the installation and construction of GRANTEE's existing telecommunications infrastructure. (b) City agrees to process all applicable permits for the installation, construction, maintenance, repair, removal and other activities associated with the network upgrade in a timely and prompt manner. (8/1/06) 515776.2 -8- AT&T Video Services Agreement SECTION 12. [RESERVED] SUBORDINATE USE OF RIGHTS OF WAY. SECTION 13. Any privilege claimed by GRANTEE in the public right-of-way shall be subordinate to any prior lawful occupancy of the public right-of-way. SECTION 14. DISCLAIMER OF GUARANTEES. (a) Nothing in this Agreement shall be deemed to be a representation or guarantee by CITY that its interest or other right to control the use of the property that is the subject herein is sufficient to permit its use for the purposes specified in this Agreement. This Agreement shall be deemed to grant no more than the rights that CITY may have the authority to grant. (b) GRANTEE acknowledges that CITY has made no warranties or representations regarding the fitness or suitability of any of CITY's property for the installation of GRANTEE's facilities or for this project and that any performance of work or costs incurred by GRANTEE or provision of services contemplated under this Agreement by GRANTEE is at GRANTEE's sole risk. GRANTEE acknowledges that CITY has made no warranties or representations that GRANTEE shall be provided uninterrupted power service. (c) GRANTEE acknowledges and agrees that GRANTEE bears all risk of loss or damage of its facilities, equipment and material installed on CITY property or in CITY's public right-of-way pursuant to this Agreement except to the extent said loss or damage was caused by the acts or omissions of CITY, its employees or agents. SECTION 15. NONEXCLUSIVE USE. The rights to GRANTEE allowed hereunder shall be for the nonexclusive use of the public right-of-way. By executing this Agreement, CITY does not agree to restrict the number of right-of-way agreements to be executed that cover all or any part of CITY for any person in the same business, a competing business, or a related business as GRANTEE. SECTION 16. RIGHTS RESERVED TO THE CITY. (a) This Agreement shall not contract away, modify, abridge, impair, or affect, in any way, to any extent, the right of CITY to acquire any facility located in the public right-of-way through the exercise of the right of eminent domain. (b) There is reserved to CITY every right and power which is required to be reserved or provided by any ordinance of CITY, and GRANTEE, by the use of the public right-of-way, agrees to be bound thereby and to comply with any lawful action or requirements of CITY in its exercise of such rights or power, heretofore or hereafter enacted or established. (8/1/06) 515776.2 -9- AT&T Video Services Agreement (c) This Agreement shall not constitute a waiver or bar to the exercise of any governmental right or power of CITY, including CITY's authority to make any proper public use of the public right-of-way. (d) CITY shall have the right to supervise all construction or installation work performed subject to the provisions of this chapter and make such inspections as it finds necessary to ensure compliance with the terms hereunder, or any other local, state, or federal law, regulation, permit, or standard. SECTION 17. INDEPENDENT CONTRACTOR. GRANTEE is acting as an independent contractor performing work under this Agreement and is not an agent, servant or employee of CITY. Nothing in this Agreement shall be interpreted or construed as creating or establishing the relationship of employer and employee between CITY and GRANTEE. GRANTEE is responsible for paying all required state and federal taxes. SECTION 18. NOTICES. All notices hereunder must be in writing and, unless otherwise provided herein, shall be deemed validly given on the date either personally delivered to the address indicated below; or when received by certified mail, return receipt requested via U.S. Mail; or when sent via facsimile to a party at the facsimile number set forth below or to such other or further facsimile number provided in a notice sent under the terms of this paragraph, on the date of transmission of that facsimile. Should CITY or GRANTEE have a change of address, the other party shall immediately be notified in writing of such change, provided, however, that each address for notice must include a street address and not merely a post office box. All notices, demands or requests from GRANTEE to CITY shall be given to CITY addressed as follows: To CITY: Tim Serlet, Director of Public Works/City Engineer City of Tustin 300 Centennial Way Tustin, CA 92780-3767 Fax No. (714) 734-8991 To GRANTEE: AT&T California Area Manager C&E Support Alln: Virginia Becker 1265 N. Van Buren Street Anaheim, CA 92807 Fax No. (714) 630-6617 ASSIGNMENT. SECTION 19. GRANTEE may not assign or transfer any interest in this Agreement, without the prior wrillen consent of CITY, which consent shall not be unreasonably withheld; provided however that such consent shall not be required for GRANTEE to assign or transfer an interest in this Agreement to an affiliate of GRANTEE that is controlled by, controlling, or (8/1/06) -10- AT&T Video Services Agreement 515776.2 under common control with GRANTEE. Notwithstanding the above, the lease or grant of indefeasible rights of use in existing fiber optic lines, or other network elements shall not require the prior written consent of the CITY as long as GRANTEE remains solely responsible for maintaining, removing, and relocating the facilities pursuant to this Agreement. SECTION 20. TERMINATION. (a) If GRANTEE defaults in the performance of this Agreement, materially breaches any of its provisions, or if the California Public Utilities Commission finds GRANTEE's telecommunications services or facilities not to be sanctioned by any federal or state regulatory requirement, CITY reserves the right to terminate this Agreement subject to reasonable prior notice and an opportunity to cure any breach or default. (b) Notwithstanding the foregoing, either party may terminate this Agreement at any time by providing one hundred eighty (180) days written notice of said termination to the other party. CITY agrees that it shall terminate this Agreement only in the event it determines GRANTEE's facilities and GRANTEE's use thereof create a public nuisance or otherwise cause jeopardy to the public health, welfare or safety. (c) Upon expiration or termination,GRANTEE shall discontinue providing video services and shall remove any facility used solely for delivery of video services within a mutually agreeable timeframe. The provisions of this subsection shall survive the expiration or termination of this Agreement. SECTION 21. [RESERVED] ENTIRE AGREEMENT; AMENDMENTS. SECTION 22. This Agreement, including the exhibits referenced herein and incorporated herein, constitutes the entire Agreement between the parties relating to the rights of the parties hereunder. No modification of this Agreement shall be effective unless and until such modification is evidenced in writing signed by all parties. SECTION 23. TIME OF ESSENCE. Time shall be of the essence in this Agreement. SECTION 24. NON-WAIVER. A waiver by CITY of any breach of any term covenant, or condition contained in this Agreement shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant, or condition contained in this Agreement whether of the same or different character. (8/1/06) 515776.2 -11- AT&T Video Services Agreement SECTION 25. GOVERNING LAW/EXCLUSIVE VENUE. This Agreement shall be governed and construed in accordance with the laws of the State of California and exclusive venue shall be in the County of Orange, whether litigation ensues in State or Federal court. SECTION 26. SEVERABILITY. If any part of this Agreement is held invalid, the remaining terms and conditions shall not be affected unless their enforcement under these circumstances would be unreasonable, inequitable, or otherwise frustrate the purposes of this Agreement. SECTION 27. PROPERTY TAXES. In no event shall CITY be liable for any taxes owed as a result of this Agreement or California Revenue and Taxation Code section 107.6. SECTION 28. DEFAULT. In the event of default by either party to this Agreement, CITY, but not GRANTEE, shall have available all remedies at law or in equity not otherwise provided for herein, including by way of illustration but not limitation, suits for injunctive or declaratory relief, specific performance, relief in the nature of mandamus, or action for damages. GRANTEE shall possess all remedies with the exception of an action for damages, which will not be available against CITY or any related person or entity except and to the extent of CITY's sole negligence, willful misconduct or criminal acts. All remedies, including the remedies specified in this Agreement, shall be cumulative and not exclusive of one another, and the exercise of anyone or more of said remedies shall not constitute a waiver or election with respect to other available remedy. [SIGNATURE PAGE FOLLOWS] (8/1/06) 515776.2 -12- AT&T Video Services Agreement IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the day first above written. CITY City of Tustin GRANTEE AT&T California William A. Huston City Manager By: Its: APPROVED AS TO FORM: Douglas C. Holland City Attorney (8/1/06) 515776.2 -13- AT&T Video Services Agreement