City Auditor - City Recorder - Council Ordinance - 177193 IRNE telecom services revocable permit ordinance

ORDINANCE No. 177193

*Grant a temporary revocable permit to Integrated Regional Network Enterprise for telecommunications services, and establish terms and conditions (Ordinance).

The City of Portland ordains:

Section 1. The Council finds:

1. On May 24, 2000 the Portland City Council, through Resolution No. 35888, directed the Bureau of General Services Communications and Networking Division to implement the Integrated Regional Network Enterprise (IRNE). ‘Integrated Regional Network Enterprise’ and IRNE are both registered as assumed business names with the Oregon Secretary of State, Corporation Division.

2. IRNE is a broadband telecommunications network that will carry voice and data communications for the City of Portland and its strategic IRNE partners. IRNE is designed to meet the City’s and regional partners’ needs for telecommunications for the next decade while controlling cost.

3. IRNE will install fiber and other equipment in the City’s rights of way in order to provide telecommunications service. On July 3, 2002 and July 5, 2002, the City registered both ‘IRNE’ and ‘Integrated Regional Network Enterprise’ as assumed business names with the Oregon Secretary of State, Corporation Division.

4. IRNE has approached the Office of Cable Communications and Franchise Management (“OCCFM”) to obtain a franchise to provide Telecommunications Services in Portland. The Cable Office is responsible for franchise negotiations under PCC 3.114.030.A. The OCCFM and IRNE have reached agreement on franchise terms.

5. Under the Charter of the City of Portland, the time before a franchise takes effect may extend up to four months or more. However, IRNE needs to obtain permission to use the City streets as soon as possible. IRNE has entered into intergovernmental agreements with the Portland Public Schools, the City of Gresham, Multnomah County and other governmental entities in the region to provide competitive telecommunications services, including data transmission and voice services. Significant public benefits will accrue as a result of the prompt startup and provision of services by IRNE to these governmental entities. There should be no delay in providing authority to IRNE for use of the streets in order to provide such public benefits.

6. The City will shortly begin considering approval of the proposed Franchise, following the formal Portland City Charter procedure of public notice and hearing. IRNE has asked the City, in writing, if the City would issue a temporary, revocable permit allowing IRNE to immediately begin construction to add to its fiber optic system to provide telecommunications services. IRNE’s letter acknowledges that the parties have otherwise reached final agreement on Franchise terms and conditions, and identifies an immediate need to begin construction of its telecommunications facilities in the public right-of-way. IRNE has accepted that its rights under a revocable permit would end upon the permit’s expiration, if not otherwise superseded by the proposed Franchise. A copy of IRNE’s letter is attached to this Ordinance as Exhibit A, and is hereby incorporated by reference.

7. The City Code restricts the authority of the City Engineer to issue permits to any entity to open or use the streets until that entity has a franchise or other grant of authority from the City Council to occupy the Streets.

Now therefore the Council directs:

a. NATURE AND TERM OF GRANT.

A. Issuance of Temporary, Revocable Permit.

1. Grant of Permit. The City of Portland, grants to the Integrated Regional Network Enterprise, operating under the assumed business name of IRNE (Permittee), and to Permittee’s successors and assigns, as approved by the City under Paragraph o of this Temporary, Revocable Permit (“Permit”), a Permit to construct, operate and maintain a telecommunications system, with all necessary Facilities, in, under, and over the surface of the City of Portland’s Streets. Permittee intends to use its Telecommunications System to provide Telecommunications Services. To the extent that Permittee’s use of its Telecommunications System changes or is subsequently modified, the City of Portland may reopen this Permit pursuant to the provisions of Paragraph s, hereof.

2. This Permit is issued to Permittee subject to all of the following terms and conditions:

A. This Permit does not authorize the operation of a cable system or providing video programming, as defined by 47 U.S.C.A §522.

B. Duration of Permit. The term of this Permit, and all rights and obligations pertaining thereto, shall be effective for either: (1) a period of only one year, as measured from its effective date; or, (2) until the City grants a franchise to Permittee and the franchise becomes effective, whichever event occurs sooner. The effective date of this Permit shall be upon passage of this ordinance by the City Council, unless Permittee fails to file an unconditional written acceptance of this Permit in accordance with Paragraph s of this Permit, in which event this Permit shall thereupon be null and void. The passage date of this Permit is set forth on the last page of the original hereof, as stamped by the Council Clerk.

C. This Permit is temporary and revocable, and no expenditure of money, lapse of time, act, event, or other occurrence shall give Permittee any rights, vested or otherwise, to occupy or use the City’s streets, or shall operate as an estoppel against, or a waiver by, the City. Upon expiration to the term of this Permit, or its revocation by the City Council, Permittee shall remove its Telecommunications System and other facilities from the City Streets, or waive its rights to such Telecommunications System and other facilities. Any such removal shall be directed by, and to the satisfaction of, the City Engineer.

D. Permit Not Exclusive. This Permit is not exclusive. The City expressly reserves the right to grant rights or permits to other Persons, as well as the right in its own name as a municipality, to use the Streets for similar or different purposes allowed Permittee hereunder, by franchise, permit or otherwise.

E. Charter and General Ordinances To Apply. To the extent authorized by law, this Permit is subject to the Charter of the City of Portland and general ordinance provisions passed pursuant thereto, affecting matters of general City concern and not merely existing contractual rights of Permittee, now in effect or hereafter made effective. Section 10-201 through 10-218, inclusive, of the Charter of the City of Portland, (1942 compilation, as revised in part by subsequent amendments), are hereby incorporated by reference and made a part of this Permit, to the extent authorized by law. Nothing in this Permit shall be deemed to waive the requirements of the various codes and ordinances of the City regarding permits, fees to be paid or the manner of construction.

b. DEFINITIONS.

1. Captions. Throughout this Permit, captions to sections and paragraphs are intended solely to facilitate reading and to reference the sections, paragraphs and provisions of this Permit. The captions shall not affect the meaning and interpretation of this Permit.

2. Definitions. For the purpose of this Permit, the following terms, phrases, and their derivations shall have the meanings given below unless the context indicates otherwise. When not inconsistent with the context, words used in the present tense include the future tense, words in the plural number include the singular number, and words in the singular include the plural number. The word "shall" is always mandatory and not merely directory.

A. “Attachment” means any wire, optical fiber or other cable, and any related device, apparatus or auxiliary equipment, for the purpose of voice, video, or data transmission.

B. “City” means the City of Portland, Oregon, a municipal corporation, and all of the territory within its corporate boundaries, as such may change from time to time.

C. “City Council” means the Council of the City of Portland.

D. “Conduit” means any structure, or section thereof, containing two or more ducts used for telecommunications fiber or co-axial cable.

E. “Conduit Facility” means any structure, or section thereof, containing one or more ducts, conduits, manholes, handhole or other such facilities in Permittee's Telecommunications System.

F. “Duct” means a single enclosed raceway for conductors, optical fiber, wire or other cable.

G. “Facility” means any tangible component of the Telecommunications System.

H. "Permit” means this Permit agreement, as approved by the City Council and accepted by Permittee, according to the terms of Paragraph s of this Permit.

I. “Gross Revenues” shall mean any and all gross revenues derived by Permittee for the provision of any and all telecommunications products, services or charges, originating or terminating in Portland, Oregon or billed to a circuit, switch or address in Portland, Oregon, including revenues from dedicated telecommunications private networks. Gross revenues shall include any and all revenue from leases and IRUs for the Portland portion of Permittee's system.

J. "Indefeasible Right of User Interest" ("IRU") means a form of acquired capital in a telecommunications system, in which the holder of the interest possesses a right to use the telecommunications system, but not the right to control, maintain, construct or revise the telecommunications system.

K. “Licensee” means any Person franchised, licensed or otherwise permitted by the City to use the Streets. For the purposes of Paragraph l, Permittee shall not be construed to be a "Licensee" as defined herein.

L. “Minimum Annual Permit Fee” shall mean $10,000.

M. “OC-3” means an Optical Carrier 3 level of telecommunications service.

N. “Optical Fiber” means a filament of transparent dielectric material, usually glass or plastic, and usually circular in cross section, that guides light, and is used to convey modulated information.

O. “Penalties” means any and all monetary penalties provided for in this Permit.

P. “Person” means any individual, sole proprietorship, partnership, association, corporation or other form of organization authorized to do business in the State of Oregon, and includes any natural person.

Q. “Streets” means the surface of, and the space above and below, any public street, road, alley or highway, within the City, used or intended to be used by the general public for travel, to the extent the City has the right to allow Permittee to use them.

R. “Surplus ducts or conduits” are Conduit Facilities other than those occupied by Permittee or any prior Licensee, one unoccupied duct held by Permittee as an emergency use spare, and other unoccupied ducts that Permittee reasonably expects to use within the next 18 months.

S. “Telecommunications Services” means:

(1) Services interconnecting interexchange carriers, competitive carriers, and/or wholesale telecommunications providers for the purpose of voice, video, or data transmission;

(2) Services connecting interexchange carriers and/or competitive carriers to telephone companies providing local exchange services for the purpose of voice, video, or data transmission;

(3) Services connecting interexchange carriers or competitive carriers to any entity, other than another interexchange carrier, competitive carrier, or telephone company that provides local exchange services, for the purpose of voice, video, or data transmission; or

(4) Services interconnecting any entities, other than interexchange carriers, competitive carriers, or telephone companies providing local exchange services, for the purpose of voice, video, or data transmission.

(5) This Permit does not authorize Permittee to operate as a telecommunications provider. Permittee represents that it has applied for and received all necessary regulatory authority; and

(6) Nothing in this Permit shall preclude Permittee from entering into a contract for the use of any portion of its Telecommunications System with any Person or other entity for any services, whether specified herein or not, provided that said Person or entity is another franchisee, licensee, or Permittee and has been granted authority by the City.

T. “Telecommunications System” means all wires, cables, ducts, conduits, vaults, poles, Optical Fiber and other necessary Facilities owned or used by Permittee for the purpose of providing Telecommunications Services and located in, under and above City Streets, excluding ducts, conduits and vaults leased from another City franchisee, licensee or Permittee.

U. “Year”, “Annual”, or “Annually” means the period consisting of a full calendar year, beginning January 1 and ending December 31, unless otherwise provided in this Permit.

c. COMPENSATION AND AUDITING.

1. Amount of compensation.

A. As compensation for the benefits and privileges under this Permit and in consideration of permission to use the Streets of the City, the Permittee shall pay as a Permit fee to the City, through the duration of this Permit, the greater of either: a) the Minimum Annual Permit Fee; or, b) an amount equal to five percent (5%) of the Permittee’s Gross Revenues. However, revenues derived from the sale, lease or IRU of facilities and subject to Paragraph c.1.B shall be excluded from the Gross Revenues calculation of Permit fees under this Paragraph.

B. As additional compensation to the amounts set forth in Paragraph c.1:

a. In the event Permittee sells any portion of its Telecommunications System, Permittee shall pay a one-time Permit fee to the City of one percent (1%) of the sales price. To the extent that the Telecommunications System is wholly owned by the Grantee as an agency of the City, all of the sales revenues shall accrue to the City and no franchise fee shall be paid on those revenues.

b. In the event Permittee enters into any lease or grants any IRU for any portion of its Telecommunications System in the Streets, Permittee shall pay annually to the City a Permit fee of five percent (5%) of the revenues from any such leases and IRUs.

c. The calculation of the one percent (1%) Permit fee on sales shall be based on the sale price of the Portland, Oregon portion of the Telecommunications System. The calculations of the one percent Permit fee on sales revenues shall be calculated under the following formula:

Permit fee = (.01) x Ts x (Fp÷Ft), where:

Ts = Total sales price for the facility(ies);

Fp = the length of the facilities sold located within the City, expressed in fiber-miles; and,

Ft = the total length of the facilities sold, expressed in fiber-miles.

An illustrative example of this calculation would be as follows: Out of a fiber optic bundle of twenty four (24) fibers in a forty mile loop, Permittee sells two (2) fibers to a purchaser for a total sales price of five hundred thousand dollars ($500,000). Ten miles of the fiber optic loop are located within the City of Portland. The calculation would be as follows: Permit fee = (.01) X $500,000 X (2 x 10) ÷ (2 x 40) = $1,250.

d. The calculation of the five percent (5%) Permit Fee on leases and IRUs shall be based on the same formula above, but the Permit Fee figure shall be (.05).

2. Permit Fee Payments.

(A) Permittee's Minimum Annual Permit Fee payable under Paragraph c. shall be paid to the City annually following the effective date of this Permit. Each annual payment shall be made for the immediately preceding calendar year ending December 31. Each annual payment of Permittee's Minimum Annual Permit Fee shall be paid on or before the forty-fifth (45th) day following December 31st.

(B) The Gross Revenue based Permit fee payable under Paragraph c.(A), together with Permit fees based upon revenues from sales under Paragraph c.(B), shall be computed and paid on or before the forty-fifth (45th) day following each calendar year quarter period (January 1 through March 31, April 1 through June 30, July 1 through September 30, and October 1 through December 31) during the term of this Permit.

(C) Permit fee payments not received by the City on or before the due date shall be assessed interest based on the average prime interest rate set by the City’s bank on December 31st of the previous year, plus 300 basis points (3%). At no time shall the annual interest rate be reduced to less than 12%.

3. Reports. Each payment shall be accompanied by a written report to the City, verified by an officer or other authorized representative of Permittee, containing an accurate statement in summarized form, as well as in detail, of Permittee's Gross Revenues, together with Permit fees based upon revenues from sales, IRUs and leases under Paragraph c. and the computation basis and method. Such reports shall be in a form satisfactory to the City.

4. Cost of Pre-franchising and Publication. Permittee has paid the City Five thousand Dollars ($5,000) for its pre-franchising costs, including publication of this Permit, as such publication is required by the City Charter.

5. Acceptance of Payment and Recomputation.

a. No acceptance of any payment by Permittee shall be construed as an accord that the amount paid is, in fact, the correct amount, nor shall any acceptance of payments be construed as a release of any claim the City may have for further or additional sums payable. All amounts paid under Paragraph c shall be subject to confirmation and recomputation by the City.

b. If the City determines that Permittee made any underpayment, and that the underpayment exceeded 5% of the amount due, Permittee shall pay interest compounded at the rate of one percent (1%) over the existing prime rate as set by the bank with which the City contracts for its banking services, compounded monthly, but not less than 12%. Interest shall be due on the entire underpayment from the date on which payment was due until the date on which full payment is received.

c. The City and its agents and representatives shall have authority to arrange for and conduct reviews of the relevant financial obligations payable hereunder. The City may determine the scope of review in each instance. City requests for reviews shall be in writing. As a City agency, Permittee shall maintain an office in Portland.

A. 6. If the Permittee disputes the City’s determination of underpayment, the Permittee shall place the disputed amount in an escrow account until final resolution.

d. GENERAL FINANCIAL AND INSURANCE PROVISIONS.

A. Insurance

1. The Permittee shall maintain commercial general liability and property damage insurance that protects the Permittee and the City, as well as the City’s officers, agents, and employees, from the claims referred to in Paragraph e. The insurance shall provide coverage at all times of not less than $200,000 for personal injury to each person, $500,000 for each occurrence, and $50,000 for each occurrence involving property damages, plus costs of defense; or a single limit policy of not less than $500,000 covering all claims per occurrence, plus costs of defense. The limits of the insurance shall be subject to statutory changes as to maximum limits of liability imposed on municipalities of the State of Oregon during the term of this Permit. The insurance shall be without prejudice to coverage otherwise existing and shall name as additional insureds the City and its officers, agents, and employees. Notwithstanding the naming of additional insureds, the insurance shall protect each insured in the same manner as though a separate policy had been issued to each, but nothing in this Paragraph d(A)(1) shall operate to increase the insurer’s liability as set forth elsewhere in the policy beyond the amount or amounts for which the insurer would have been liable if only one person or interest had been named as insured. The coverage must apply as to claims between insureds on the policy. The insurance shall provide that the insurance shall not be canceled or materially altered without thirty (30) days prior written notice first being given to the City Auditor. If the insurance is canceled or materially altered within the term of this Permit, Permittee shall provide a replacement policy with the same terms. Permittee shall maintain continuous uninterrupted coverage, in the terms and amounts required, upon and after the effective date of this Permit.

2. Permittee shall maintain on file with the City Auditor a certificate of insurance certifying the coverage required above. The certificate of insurance shall be reviewed and approved as to form by the City Attorney.

3. As an agency of the City, Grantee participates in the City’s self-insurance program. Such self-insurance provides at least the same amount and scope of coverage for the Permittee and the City, its officers, agents and employees, as otherwise required under this Paragraph. The adequacy of such self-insurance shall be subject to the City Attorney’s review and approval. So long as Permittee participates in the City’s self-insurance program as an agency of the City, the adequacy of such self-insurance shall be presumed to be approved by the City Attorney.

B. Faithful Performance Bond.

1. Upon the effective date of this Permit, Permittee shall furnish proof of the posting of a faithful performance bond running to the City, with good and sufficient surety approved by the City, in the penal sum of $100,000, conditioned that Permittee shall well and truly observe, fulfill, and perform each term and condition of this Permit. Permittee shall pay all premiums charged for the bond, and shall keep the bond in full force and effect at all times throughout the term of this Permit, including, if necessary, the time required for removal of all of Permittee’s Telecommunications System installed in the City’s Streets. The bond shall contain a provision that it shall not be terminated or otherwise allowed to expire without 30 days prior written notice first being given to the City Auditor. The bond shall be reviewed and approved as to form by the City Attorney.

2. During the term of this Permit, Permittee shall file with the City Auditor a duplicate copy of the bond along with written evidence of payment of the required premiums.

3. As an agency of the City, Grantee participates in the City’s self-insurance program. Such self-insurance provides at least the same amount and scope of coverage for the Permittee and the City, its officers, agents and employees, as otherwise required under Subparagraph d.B.1. The adequacy of such self-insurance shall be subject to the City Attorney’s review and approval. So long as Permittee’s participates in the City’s self-insurance program as an agency of the City, the adequacy of such self-insurance shall be presumed to be approved by the City Attorney.

C. Construction Bond

1. During all times when Permittee is performing any construction work in or under the Streets requiring a street opening permit, Permittee shall post a faithful performance bond or irrevocable letter of credit, as is required for street opening permits, running to the City, with good and sufficient surety approved by the City, in the sum of $100,000. The bond or letter of credit shall be conditioned that the Permittee shall well and truly observe, fulfill and perform each term and condition under Paragraph f. Permittee shall pay all premiums or other costs associated with maintaining the bond or letter of credit, and shall keep the same in full force and effect at all times during the construction work. The bond or letter of credit shall provide that it may be terminated upon final approval of Permittee’s construction work in or under the Streets by the City Engineer. Upon such approval, the City agrees to sign all documents necessary to release the bond in accordance with the terms of this Paragraph. During the duration of the construction work, Permittee shall file with the City Auditor a copy of the bond or letter of credit, along with written evidence of the required premiums. The bond or letter of credit shall be subject to the approval of the City Attorney as to its adequacy under the requirements of this Paragraph.

2. As an agency of the City, Grantee participates in the City’s self-insurance program. Such self-insurance provides at least the same amount and scope of coverage for the Permittee and the City, its officers, agents and employees, as otherwise required under Subparagraph d.C.1. The adequacy of such self-insurance shall be subject to the City Attorney’s review and approval. So long as Permittee’s participates in the City’s self-insurance program as an agency of the City, the adequacy of such self-insurance shall be presumed to be approved by the City Attorney.

e. INDEMNIFICATION. As Permittee is an agency of the City of Portland, the City is subject to the terms and conditions of the Oregon Tort Claims Act, including but not limited to indemnification of employees, officers and agents for claims arising from the performance of their official duties and responsibilities.

f. CONSTRUCTION AND RELOCATION.

A. Subject to applicable regulations of the City, Permittee may perform all necessary construction to construct, operate and maintain its Telecommunications System. All construction and maintenance of any and all Telecommunications System Facilities within Streets incident to Permittee’s provision of Telecommunications Services shall, regardless of who performs installation and/or construction, be and remain the responsibility of Permittee. Permittee shall apply for and obtain all permits necessary for installation and/or construction of any such Facilities, and for excavation and laying of any Telecommunications System Facilities within the Streets. Permittee shall pay all applicable fees due for City construction permits.

1. Maps

a. Prior to beginning construction within the Streets, Permittee shall provide the City’s Office of Cable Communications and Franchise Management, or its successor, with an initial construction schedule for work in the Streets and the estimated total cost of such work. As the Permittee’s construction in the Streets is completed, Permittee shall provide the City with maps showing the location of its installed Telecommunications System in the Streets, as built. Such as-built maps shall be in a form acceptable to the City Engineer.

b. One year after the effective date of this Permit, and annually thereafter, Permittee shall provide a map to the City’s Office of Cable Communications and Franchise Management, or its successor, showing the location of Permittee’s optical fibers, conduit and ducts in, over or through the Streets on a scale of Three thousand five hundred feet (3,500’) per inch or whatever standard scale the City adopts for general use. Permittee shall also provide such maps in an electronic format acceptable to the City and the Permittee.

2. Permittee may make excavations in the City Streets for any Facility needed for the maintenance or extension of the Permittee’s Telecommunications System, subject to obtaining permits from the City. Prior to doing such work, Permittee must apply for, and obtain, appropriate permits from the City, and give appropriate notices to any further franchisees, licensees or Permittees of the City, or bureaus of the City, or other units of government, owning or maintaining facilities which may be affected by the proposed excavation.

3. In the event that emergency repairs are necessary for Permittee’s Facilities in the Streets, Permittee shall immediately notify the City of the need for such repairs. Permittee may immediately initiate such emergency repairs, and shall apply for appropriate permits the next business day following discovery of the emergency. Permittee must comply with all Charter and ordinance provisions relating to such excavations or construction, including the payment of permit or license fees.

B. Locates. Permittee shall comply with the requirements of the Oregon Utility Notification Law (ORS 757.542 to 757.562 and 757.993 (2001)) and the rules and regulations promulgated thereunder.

C. Relocation. The City shall have the right to require Permittee to change the location of its Telecommunications System within the Streets when the public convenience requires such change, and the expense thereof shall be paid solely by Permittee. The City shall provide the Permittee with the standard notice given under the circumstances to other franchisees, licensees, or Permittees. Should Permittee fail to remove, or relocate such facilities by the date established by the City, the City may cause and/or effect such removal or relocation, and the expense thereof shall be paid by Permittee, including all direct, indirect and/or consequential costs and expenses incurred by the City due to Permittee’s delay. If the City requires Permittee to relocate its facilities located within the City’s Streets, the City will make an effort to provide Permittee with an alternate location for its facilities within the City’s Streets.

D. Permittee’s Telecommunications System shall be constructed and maintained in such manner as not to interfere with sewers, water pipes, or any other property of the City, or with any other pipes, wires, conduits or other facilities that may have been laid in the Streets by or under the City’s authority.

E. Within thirty (30) days following Permittee’s acquisition of any Telecommunications System Facilities in the Streets, or upon any addition or annexation to the City of any area in which Permittee retains any such Facilities in the Streets, the Permittee shall submit to the City a written statement describing all Facilities involved, whether authorized by franchise or any other form of prior right, and specifying the location of all such Facilities. At the City’s sole option, as expressed by ordinance adopted by the City Council, Facilities acquired by Permittee shall immediately be subject to the terms of this Permit, within a reasonable period of time to bring such acquired Facilities into compliance with this Permit.

g. RESTORATION OF STREETS.

A. Whenever Permittee disturbs the surface of any unimproved Street for any purpose, Permittee shall promptly restore the street to at least its prior condition to the satisfaction of the City Engineer. When any opening is made by Permittee in a hard surface pavement in any Street, Permittee shall promptly refill the opening and restore the surface to a condition satisfactory to the City Engineer, in accordance with standards developed and adopted by the City Engineer.

B. If Permittee excavates the surface of any Street, Permittee shall be responsible for restoration of the Street and its surface within the area affected by the excavation. The City may, after providing notice to Permittee, refill and/or repave any opening made by Permittee in the Street, and the expense thereof shall be paid by Permittee. The City reserves the right, after providing notice to Permittee, to remove and/or repair any work done by Permittee which, in the determination of the City Engineer, is inadequate. The cost thereof, including the cost of inspection and supervision, shall be paid by the Permittee. All excavations made by Permittee in the Streets shall be properly safeguarded for the prevention of accidents. All of Permittee’s work under Paragraph g shall be done in strict compliance with all applicable rules, regulations and ordinances of the City.

C. Tree Trimming

1. After obtaining a written permit from the City Forester, Permittee may prune or cause to be pruned, using proper arboricultural practices in accordance with such permit, any tree in or overhanging the Streets which interferes with Permittee’s Telecommunications System. Except in emergencies, Permittee may not prune trees at a point below 30 feet above sidewalk grade until one week after written notice has been given to the owner or occupant of the premises abutting the Street in or over which the tree is growing. For the purposes of this Paragraph g.C, an emergency exists when it is necessary to prune to protect the public from imminent danger. The owner or occupant shall have seven days from receipt of Permittee’s notice to prune such tree at his or her own expense. If the owner or occupant fails to do so, Permittee may prune such tree at its own expense.

2. The City Forester may, at his or her own discretion, waive the notification and permit process in the case of single trees, if Permittee adequately demonstrates to the City Forester’s satisfaction the ability to consistently apply proper arboricultural practices to the pruning of trees. Before any tree trimming permit may be issued, any contractor to be used by Permittee shall be subject to the approval of the City Forester. The City Forester shall have the discretion to cancel the permit if, at any time, the Permittee or its agents, fails to use proper arboricultural practices.

h. RESERVATION OF CITY STREET RIGHTS.

Nothing in this Permit shall be construed to prevent the City from constructing sewers, grading, paving, repairing and/or altering any Street or laying down, repairing or removing water mains or constructing or establishing any other public work or improvement. All such work shall be done, insofar as practicable, so as to not obstruct, injure or prevent the unrestricted use and operation of the Telecommunications Systems of the Permittee under this Permit. However, if any of the Permittee’s Telecommunications System interferes with the construction or repair of any Street or public improvement, including construction, repair or removal of a sewer or water main, the Permittee’s System shall be removed or replaced in the manner the City shall direct; provided, however, the City will cooperate with the Permittee to identify alternate locations within the Streets. Any and all such removal or replacement shall be at the expense of the Permittee. Should Permittee fail to remove, adjust or relocate its Facilities by the date established by the City Engineer’s written notice to Permittee, the City may cause and/or effect such removal, adjustment or relocation, and the expense thereof shall be paid by Permittee, including all costs and expenses incurred by the City due to Permittee’s delay.

i. USE OF NETWORK CAPACITY AND DUCTS BY CITY.

A. As a City agency, Permittee’s core mission and routine operations will be to provide telecommunications services to the City and other public bodies such as cities, counties, and school districts, through the construction, operation and maintenance of Facilities.

1. As an agency of the City, other agencies of the City of Portland may use Permittee’s surplus conduits or ducts. The value of the City’s use of Permittee’s surplus conduits or ducts shall not be deducted from Permittee’s Permit fee, or other fees or charges payable to the City.

B. Network Capacity

1. As an agency of the City, Permittee shall provide the City with access to Permittee’s lit optical fiber network. Permittee shall provide the City with reliable levels of service, repair and maintenance, at least as good as that which the Permittee provides to other customers of its lit optical fiber network. The City hereby grants authority to the Permittee to enter any City premises necessary for building and installing the connections requested by the City.

2. As Permittee is an agency of the City, the City will pay for the costs of any design, material, service, installation, provisioning or connection of the City to the lit optical fiber network. Permittee’s charges for designing, materials, servicing, installing, provisioning, or connecting the City to the lit optical fiber network may be deducted from Permit fees payable to the City, or may otherwise be separately charged to the City. The other terms and conditions of such services shall be specified in a separate agreement between the City and Permittee.

C. For the purposes of Paragraph i, the term “municipal purposes” includes, but is not limited to, the use of the Permittee’s structures, Facilities, and installations for the City’s fire, police, traffic, water system control and monitoring, and users of City’s data, video, telephone, and/or signal systems.

j. STREET VACATION. If any Street or portion thereof used by Permittee is vacated by the City during the term of this Permit, unless the City Council specifically reserves to Permittee the right to continue its installation in the vacated Street, Permittee shall, without expense to the City, promptly remove its Telecommunications System Facilities from such Street, and restore, repair or reconstruct the Street where such removal has occurred, and place the Street in such condition as may be required by the City Council which shall be no better than the condition of such Street immediately prior to removal. The City will cooperate with Permittee to identify alternative locations within the Streets.

k. MAINTENANCE OF FACILITIES. Permittee shall provide and put in use all Telecommunications System Facilities necessary to control and carry Permittee’s Telecommunications Services so as to prevent injury to the City’s property or property belonging to any Person within the City. Permittee, solely at its own expense, shall repair, renew, change and improve said Facilities from time to time as may be necessary to accomplish this purpose. Permittee shall not construct its Telecommunications System in a manner that requires any customer, except the City or any entity franchised by the City, to install cables, ducts, conduits, or other facilities, in, under or over the City’s Streets.

l. COMMON USERS.

A. Permittee acknowledges that the Streets have a finite capacity for containing conduits, ducts and other Facilities. Therefore, Permittee agrees that, except as otherwise expressly prohibited by law, contract or other binding legal restrictions, whenever the City Engineer determines it is impracticable to permit construction of an underground conduit system by any other Person which may at the time have authority from the City to construct or maintain conduits or ducts in the Streets, unless safety or engineering concerns cannot reasonably be mitigated or eliminated, the City Engineer may require Permittee to afford to such Person the right to use Permittee’s surplus ducts or conduits in common with the Permittee, pursuant to the terms and conditions of an agreement for use of surplus conduits and ducts being entered into by the Permittee and the Licensee. If the Permittee and the Licensee are unable to mutually agree upon the terms and conditions of the use of surplus conduits and ducts, the parties shall submit the matter to final and binding arbitration. Such arbitration shall be conducted according to the procedures set forth under ORS 36.300 through 36.365 (2001). The cost of the arbitration, including the costs of witnesses and compensation of the arbitrators, shall be taxed against the losing party. However, each party shall separately bear its own costs of attorneys’ fees.

B. A Licensee occupying part of a Duct shall be deemed to occupy the entire Duct. Permittee shall give a Licensee and the City 120 written days notice of its need to occupy licensed conduit and shall propose that the Licensee take the first feasible action listed.

1. Pay revised conduit rent designed to recover the cost of retrofitting the conduit with multiplexing, optical fibers, or other space-saving technology sufficient to meet the Permittee’s space needs;

2. Pay revised conduit rent based on the cost of new conduit constructed to meet the Permittee’s space needs;

3. Vacate ducts that are no longer surplus; or

4. Construct and maintain sufficient new conduit to meet the Permittee’s space needs;

Permittee shall provide a written copy of such notice to the City at the same time such notice is provided to the Licensee.

C. When two or more Licensees occupy a Section of Conduit Facility, the last Licensee to occupy the Conduit Facility shall be the first to vacate or construct new conduit. When conduit rent is revised because of retrofitting of space-saving technology or construction of new conduit, all Licensees shall bear the revised cost.

D. All attachments shall meet local, state, and federal clearance and other safety requirements, be properly grounded and anchored, and meet the provisions of contracts executed between the Permittee and the Licensee. Permittee may, at its option, correct any attachment deficiencies and charge the Licensee for its costs. Each Licensee shall pay Permittee for any fines, fees, damages, or other reasonable costs the Licensee’s attachments cause Permittee to incur.

m. DISCONTINUED USE OF FACILITIES.

Whenever Permittee intends to discontinue use of its Telecommunications System within all or part of a particular portion of the Streets and does not intend to use said Facilities again in the future, Permittee shall submit to the City Engineer for the City Engineer’s approval a completed application describing the Facility and the date on which the Permittee intends to discontinue using the Facility. Permittee may remove the Facility or request that the City permit it to remain in place. If Permittee is permitted to abandon its Facilities in place, upon written consent of the City, the ownership of Facilities in the City’s Streets shall transfer to the City and Permittee shall have no further obligation therefor. Notwithstanding Permittee’s request that any such Facility remain in place, the City Engineer may require Permittee to remove the Facility from the street area or modify the Facility in order to protect the public health and safety or otherwise serve the public interest. The City Engineer may require Permittee to perform a combination of modification and removal of the Facility. Permittee shall complete such removal or modification in accordance with a schedule set by the City Engineer. Until such time as Permittee removes or modifies the Facility as directed by the City Engineer, or until the rights to and responsibility for the Facility are accepted by another Person having authority to construct and maintain such Facility, Permittee shall be responsible for all necessary repairs and relocations of the Facility, as well as restoration of the Street, in the same manner and degree as if the Facility were in active use, and Permittee shall retain all liability for such Facility.

n. HAZARDOUS SUBSTANCES.

A. Permittee shall comply with all applicable state and federal laws, statutes, regulations and orders concerning Hazardous Substances relating to Permittee’s Telecommunications System in the City Streets. For purposes of this Paragraph, “Hazardous Substances” shall have the meaning given by ORS 465.200(15) (2001).

B. Permittee shall maintain and inspect its Telecommunications System located in the City Streets. The City may inspect Permittee’s Facilities in the Streets to determine if any release of Hazardous Substances has occurred, or may occur, from or related to Permittee’s Telecommunications System Facilities.

C. In removing or modifying Permittee’s Facilities as provided in Paragraphs f.C, h or m of this Permit, Permittee shall also remove all residue of Hazardous Substances in compliance with applicable environmental clean-up standards related thereto. The City shall provide Permittee with information within the City’s possession which identifies potentially responsible parties for the purposes of recovering such removal costs.

D. As Permittee is an agency of the City, the City is responsible for any claims, costs, and expenses, of any kind, whether direct or indirect, arising out of the release or threat of release of Hazardous Substances caused by Permittee’s ownership or operation of a Telecommunications System in the Streets.

o. CITY’S WRITTEN CONSENT REQUIRED FOR ASSIGNMENT, TRANSFER, MERGER, LEASE OR MORTGAGE.

A. Except as otherwise permitted by Paragraph o.B hereof, neither this Permit nor any of Permittee’s Telecommunications System located in the Streets by authority of this Permit shall be sold, leased, mortgaged, assigned, merged or otherwise transferred without the prior written consent of the City as expressed by ordinance, except to entities that control, are controlled by, or are under common control with the Permittee. Permittee shall give written notice to the City of any transfers to entities under such common control within ten (10) days of such transfers. If Permittee transfers Facilities to an entity other than the City of Portland, then the City and the Permittee shall, prior to the transfer, make modifications to this Permit to reflect the change in status of the Permit holder from that of a city agency. The City’s granting of consent in one instance shall not render unnecessary any subsequent consent in any other instance. Nothing contained in this Paragraph o shall be deemed to prohibit the mortgage, pledge, or assignment of tangible assets of Permittee’s Telecommunications System for the purpose of financing the acquisition of equipment for or the construction and operation of Permittee’s Telecommunications System, within or outside the City, without the City’s consent, but any such mortgage, pledge or assignment shall be subject to the City’s other rights contained in this Permit.

1. In determining whether the City will consent to any sale, lease, mortgage, assignment, merger or transfer, the City may inquire into the technical, legal, and financial qualifications of the prospective party. Permittee shall assist the City in any such inquiry. The City may condition any sale, lease, mortgage, assignment, merger or transfer upon such conditions related to the technical, legal, and financial qualifications of the prospective party to perform according to the terms of this Permit, as it deems appropriate.

2. No sale, lease, mortgage, assignment, transfer or merger for which the City’s consent by ordinance is required may occur until the successor, assignee or lessee has complied with the requirements of Paragraph d, including, but not limited to, providing certificates of insurance, unless the City Council waives such compliance by ordinance. Within ten (10) days after execution and delivery of any instrument so consented to by the City, Permittee shall file with the Auditor an executed counterpart or certified copy thereof.

B. Permittee shall not lease any of its Facilities without the City’s prior consent as expressed by ordinance. However, and notwithstanding Paragraph o.A, hereof, Permittee may lease any portion of its Facilities in the ordinary course of its business without otherwise obtaining the City’s consent by ordinance, so long as Permittee remains solely responsible for locating, servicing, repairing, relocating or removing such Facilities. A lessee of Permittee’s Facilities shall not obtain any rights under this Permit. For the purposes of this Subparagraph, a capital lease shall be treated as a lease under this Subparagraph until the conclusion of the lease, when transfer of ownership occurs. At that point in time, the capital lease shall be treated as a sale under Subparagraph o.B.2.

1. Notwithstanding Paragraph o.A.1, Permittee may grant Indefeasible Right of User Interests in any portion of its Facilities in the ordinary course of its business without otherwise obtaining the City’s consent by ordinance, so long as Permittee remains solely responsible for locating, servicing, repairing, relocating or removing such Facilities. The holder of any IRU in Permittee’s Facilities shall not obtain any rights under this Permit. For the purposes of this Subparagraph, if a transfer of ownership of the Facilities occurs at the conclusion of the IRU, it shall be treated as a sale under Paragraph o.B.2 at that point in time.

2. As an agency of the City, Permittee must obtain the City Council’s content in order to sell portions of its Telecommunications System in the ordinary course of its business. Such sales may only occur under the following conditions:

a. The sale is to the holder of a current existing, valid telecommunications franchise with the City.

b. Within fourteen days of the sale being executed and becoming final, Permittee shall provide written notice to the City, describing the portions of the Telecommunications System sold by the Permittee, identifying the purchaser of the Facilities, the location of the Facilities (in accordance with the requirements of Paragraph f.A.2), and providing an executed counterpart or certified copy of the sales documents.

c. Permittee remains solely responsible for locating, servicing, repairing, relocating or removing its remaining Telecommunications System.

d. Within fourteen days of the sale being executed and becoming final, the purchaser of such Facilities shall file written notice to the City that it has assumed sole responsibility for locating, servicing, repairing, relocating or removing the purchased Facilities under the purchaser’s current, existing valid franchise. The purchaser shall not obtain any of the Permittee’s rights under this Permit.

p. FORFEITURE AND REMEDIES. As Permittee is an agency of the City, in addition to any other rights set out elsewhere in this Permit, the City Council reserves the right to declare a forfeiture of the Permit, and all of Permittee’s rights arising thereunder by ordinance in any circumstances as the Council may deem appropriate in its discretion.

q. TERMINATION. In the event that any provision of this Permit becomes invalid or unenforceable and the City Council expressly finds that such provision constituted a consideration material to entering into this Permit, the City Council may terminate this Permit.

r. MISCELLANEOUS.

A. Compliance with Laws.

1. Permittee shall comply with applicable federal and state laws.

2. Permittee shall comply with all applicable City ordinances, resolutions, rules and regulations adopted or established pursuant to the City’s authority.

B. Severability. If any paragraph, section, provision or clause of this Permit is held by a court of competent jurisdiction to be invalid or unenforceable, or is preempted by federal or state laws or regulations, the remainder of this Permit shall not be affected, except as provided under Paragraph q.

C. Regulation and Nonenforcement by the City. The City Council shall be vested with the power and authority to regulate the exercise of the privileges permitted by this Permit in the public interest. Permittee shall not be relieved of its obligations to comply with any of the provisions of this Permit by reason of any failure of the City to enforce prompt compliance, nor does the City waive or limit any of its rights under this Permit by reason of such failure or neglect.

D. Choice of Forum. Any litigation regarding this Permit shall occur, if in the state courts, in the Multnomah County Court having jurisdiction thereof, and if in the federal courts, in the United States District Court for the District of Oregon, Portland division.

E. Choice of Law. This Permit shall be governed by and construed according to the laws of the State of Oregon, even if Oregon’s choice of law rules would otherwise require application of the law of a different state.

F. Notice. Any notice provided for under this Permit shall be sufficient if in writing and (1) delivered personally to the following addressee or deposited in the United States mail, postage prepaid, certified mail, return receipt requested, (2) sent by overnight or commercial air courier (such as Federal Express), or (3) sent by facsimile transmission addressed as follows, or to such other address as the receiving party hereafter shall specify in writing:

1. If to the City: Office of Cable Communications and Franchise Management

City of Portland, Oregon

1120 SW 5th Avenue, Room 1305

Portland, Oregon 97204

FAX: (503) 823-5370

With a copy to: City Attorney’s Office

City of Portland

Room 430, City Hall

1221 SW 4th Avenue

Portland, Oregon 97204

FAX: (503) 823-3089

2. If to the Permittee: Attn: Nancy Jesuale

IRNE

Bureau of Communications and Networking
3732 SW 99^th Ave
Portland, OR 97266
FAX: (503) 823-4185

3. Any such notice, communication or delivery shall be deemed effective and delivered upon the earliest to occur of actual delivery, three (3) business days after depositing in the United States mail as aforesaid, one (1) business day after shipment by commercial air courier as aforesaid or the same day as facsimile transmission (or the first business day thereafter if faxed on a Saturday, Sunday or legal holiday).

G. Public Records. The City and the Permittee are public bodies subject to the Oregon Public Records Law, ORS 192.410 through 192.505 (2001). Some records and information under this Permit may qualify for exemptions as provided under the Public Records Law.

H. Permit Amendment. If Permittee receives authority to offer telecommunications services outside the scope of this Permit, or otherwise begins offering telecommunications services outside the scope of those identified in Paragraph b.B.19, Permittee shall immediately notify the City. Within 90 days of receiving such notice, the City may either revise or amend this Permit to reflect such changed circumstances, or may proceed with early termination of this Permit.

s. WRITTEN ACCEPTANCE. On or before the thirtieth (30th) day after this ordinance becomes effective, Permittee shall file in the Office of the Auditor of the City of Portland a written acceptance of this ordinance, executed by Permittee, meeting the approval of the City Attorney. Any failure on the part of Permittee to file such written acceptance within such time shall be deemed an abandonment and rejection of the rights and privileges conferred hereby and this ordinance shall thereupon be null and void. Such acceptance shall be unqualified and shall be construed to be an acceptance of all the terms, conditions and restrictions contained in this ordinance.

t. OTHER AUTHORITY SUPERSEDED. Upon effectiveness of this Permit, any and all authority to operate previously granted to Permittee by the City shall be superseded by this Permit.

Section 2. The Council declares that an emergency exists because the general public welfare will be serve by IRNE being authorized to immediately begin construction of its telecommunications system, to allow it to begin operation without delay and introduce further competition into the marketplace for telecommunications services; therefore, this ordinance shall be in full force and effect from and after its passage by the Council.

Passed by the Council: JAN 15 2003 Gary Blackmer

Commissioner Randy Leonard Auditor of the City of Portland

Soloos/Walters by: /S/ Susan Parsons

January 2, 2003

Deputy

BACKING SHEET INFORMATION

AGENDA NO. 35-2003

ORDINANCE/RESOLUTION/COUNCIL DOCUMENT NO. 177193

COMMISSIONERS VOTED AS FOLLOWS:

	YEAS	NAYS
FRANCESCONI	X
LEONARD	X
SALTZMAN	X
STEN	X
KATZ	X