§ 30-50. General financial and insurance provisions.

(a)

Existing Franchises Subject to Ordinance of General Application. For existing Franchises and permits and privileges which are subject to an Ordinance of General Application, as compensation for the occupancy of Public Property and of the Rights-of-Way of the City for the construction, operation, maintenance, and/or the reconstruction of a Wireline Telecommunications System within the City, the value of such rights and privileges granted by the Franchise, the fact that the Rights-of-Way contain limited and finite capacity, the administration of this Act and the Franchise by the Grantor, the usage and interference with the public's use of Rights-of-Way, the reduction in the useful life of the Rights-of-Way and other costs and obligations undertaken by the Grantor herein, the Grantee shall be subject to all existing provisions of its Franchise, permits and privileges and the Grantee shall pay to the Grantor an annual compensation to be calculated as stated below:

(1)

Long distance and Private Communications Systems. For Wireline Telecommunications Systems providing Long Distance Network Service or Private Communications Systems, the compensation payable to Grantor shall be based on a fee of $2.60 per year per linear foot of Right-of-Way or other Public Property occupied by Grantee's system, and every five years such compensation shall be increased by the average increase in the Consumer Price Index ("CPI") for the preceding five years. The increase initially shall become effective on the fifth anniversary of the date Grantee's Franchise was accepted pursuant to Section 30-55 of this Act and every five years thereafter;

(2)

All others. For all other Wireline Telecommunications Systems the compensation payable to the Grantor shall be as follows:

a.

For the first year of Grantee's Franchise, Grantee shall pay $2.60 per linear foot for its approved System route;

b.

For the second, third and fourth years of Grantee's Franchise, Grantee shall pay five percent of its Gross Receipts from the operation of the System within the City, plus $2.60 per linear foot for any additional approved System route in excess of its original approved System route; and

c.

Thereafter, when five percent of Grantee's Gross Receipts from the operation of the System within the City exceeds the minimum fee calculated on a $2.60 per linear foot basis in any year, the compensation payable to Grantor for that year shall be five percent of Grantee's Gross Receipts from the operation of the System within the City. For any year in which five percent of Grantee's Gross Receipts exceeds the linear foot payment, Grantee shall be credited with the amount of the linear foot fee payment to Grantor, and Grantee shall pay to the Grantor the additional amount by which the Gross Receipts payment exceeds the linear foot payment;

(3)

It is expressly understood that the compensation terms provided in this Section 30-50(a) shall be applicable to persons with existing franchises, permits and privileges which are subject to an Ordinance of General Application, and shall replace any similarly characterized compensation terms (percentage of gross revenues or per linear foot fees) provided in such existing franchise, permit or privilege. Notwithstanding the foregoing, nothing contained in this Section 30-50(a) shall be deemed to relieve any Person having such existing franchise, permit or privilege of its obligation to pay any and all other forms of compensation contained in its franchise, permit or privilege.

(b)

Future Franchises.

(1)

Compensation. All Franchises granted or authorized after the date of this Act shall provide compensation for the occupancy of Rights-of-Way in the following categories:

a.

For Private Communications Systems, the compensation payable to Grantor shall be based on a per linear foot of Right-of-Way occupied by Grantee's System.

b.

For Wireline Telecommunications Systems providing Long Distance Network Service to a Service Address within the city, the compensation payable to the grantor shall be an amount per minute for toll calls charged to a service address within the corporate limits of the city or other rate set by the grantor.

c.

For all other wireline telecommunications systems (excluding wireline communications systems), the compensation payable to the grantor shall be based on a linear foot measurement or percentage of grantee's gross receipts from the operation of the system within the city.

d.

For wireless communications systems, the compensation payable to the grantor shall be a fixed amount per month per cell site located on rights-of-way, plus an amount per year per linear foot of right-of-way occupied by grantee's backhaul network.

e.

Where a franchise has been granted to a primary grantee by grantor for the operation of a telecommunications system, and the compensation to be paid for said telecommunications system has been based on a linear-foot measurement, the compensation to grantor for any additional franchise granted with the permission of the primary grantee to a secondary grantee, and involving the use by secondary grantee of all or a portion of the telecommunications system operated by the primary grantee, shall be the lesser of a) $25,000.00 or b) the sum which results from multiplying the total linear footage to be used by secondary grantee times the charge per linear foot paid by the primary grantee. Where the franchise to be granted to secondary grantee involves the use of all or a portion of the telecommunications system of more than one primary grantee, the total compensation to be paid to grantor by secondary grantee shall be the lesser of a) $25,000.00 or b) the sum which results from multiplying the charge per linear foot paid by the respective primary grantees times the combined linear footage from all telecommunications systems to be used by secondary grantee. The term primary grantee, as used herein, shall mean a grantee of a franchise to operate a specific telecommunications system who allows a secondary grantee to acquire or use not more than percent of the total strands of fiber contained in the cable(s) which run along said primary grantee's telecommunications system, or portion thereof. The term secondary grantee, as used herein, shall mean a subsequent grantee who acquires from the primary grantee the right to use not more than ten percent of the total strands of fiber contained within cable(s) running along the primary grantee's telecommunications system, or portion thereof. The provisions of this subsection shall not apply to Wireless Service Providers granted access to the Grantee's Distributed Antenna System for the purpose of providing wireless telecommunications service pursuant to Section 30-46(f) of this Code.

f.

Where a Franchise has been granted to a Grantee for the operation of a Distributed Antenna System, the annual compensation payable to Grantor by Grantee for the use and occupancy of Grantor's Right-of-Way or other Public Property shall be $2.60 per linear foot of fiber optic cable in the City's Right-of-Way and/or other Public Property occupied by Grantee's approved Distributed Antenna System route used to connect Grantee's Hub to the Node nearest to Grantee's Hub. Nothing contained in this subsection shall be deemed to relieve the Grantee from per Node rental payment required by subsection g., the security fund required by subsection (b).

If technologically possible, all accessory equipment used in connection with a Grantee's Distributed Antenna System shall be housed outside of the public right-of-way.

g.

Where a Franchise has been granted to a Grantee for the operation of a Distributed Antenna System, Grantee shall pay Grantor as rent for the placement of a remote unit consisting of a distributed, repeater, or microcell antenna system on Grantor's Public Property, including, but not limited to, utility poles, stop signs, other utility structures, and/or public buildings, a rental payment of $70.00 per month for each Node located within the Franchise area granted for the operation of Grantee's Distributed Antenna System. Grantee shall immediately notify the Department of Finance when Grantee adds an additional Node or Nodes and the rent due to Grantor shall be increased retroactively to the date such Node or Nodes were installed. The monthly rental payment required by this Section 30-50(b)(1)(g) shall be in addition to the annual compensation due Grantor for the use and occupancy of Grantor's Right-of-Way or other Public Property pursuant to subsection f.

(2)

Criteria. In negotiating the specific compensation levels for the categories set forth in this subsection, the parties shall consider the following criteria:

a.

The burden(s) created by grantee's occupancy of the rights-of-way;

b.

The inconvenience to citizens created by grantee's construction and use of the rights-of-way;

c.

The damage caused to the rights-of-way by grantee's construction;

d.

The diminution of the useful life of rights-of-way caused by construction on such rights-of-way;

e.

Hazard to public safety occasioned by grantee's occupancy of rights-of-way;

f.

Costs of monitoring and administering the franchise;

g.

The value of the rights-of-way affected by grantee's occupancy;

h.

Location of rights-of-way sought to be occupied by grantee in their limited and finite capacity;

i.

Rates paid by grantees under existing franchises; and

j.

Any and all such other criteria as the grantor deems appropriate.

(c)

Miscellaneous general financial and insurance provisions.

(1)

Payments. All payments calculated by the linear foot are due and payable one year in advance and shall be paid annually by January 1 of each year. Payments calculated on all other bases are payable quarterly, within 30 days after the end of the preceding calendar quarter. Payments shall be by check made payable to the city and delivered to the department of finance. If any payment is not received by the due date, grantee shall add to its payment a late penalty in the amount of ten percent of the amount due. Additionally, interest in the amount of ten percent per annum shall accrue on all payments and penalties until paid in full.

(2)

Acceptance of payments. No acceptance of any payment shall be construed as an accord that the amount paid is in fact the correct amount, nor shall such acceptance of payment be construed as a release of any claim the grantor may have for further or additional sums payable under the provisions of this Act. All amounts paid shall be subject to audit and recomputation by the grantor.

(3)

Further consideration. As further consideration for the privilege of occupying the rights-of-way, every grantee may be required to provide to grantor the following:

a.

Upon request and without charge, reasonable access to and utilization of any conduit and/or duct space in grantee's telecommunication system, for noncommercial purposes. Such requirement shall be determined at the time that grantee's franchise application is considered, and shall depend upon the location of grantee's proposed wireline telecommunications system and grantor's reasonable needs in such location.

b.

Dark fibers in every portion of the fiber backbone cable of the wireline telecommunications system installed during the term of the franchise for the grantor's use. Grantee shall also provide feeder cables to such public buildings as are adjacent to grantee's wireline telecommunications system, provided that the grantor constructs, or otherwise provides, an entry link to those buildings for such feeder cable. The number and location of dark fiber to be provided hereunder shall be determined at the time that grantee's franchise application is considered, and shall depend upon the location of grantee's proposed wireline telecommunications system and grantor's reasonable needs in such location.

(i)

For purposes of this subsection, "adjacent" shall mean adjoining or abutting a portion of the right-of-way containing grantee's wireline telecommunications system, and "public buildings" shall mean buildings where agencies which perform public functions are located.

(ii)

If the initial dark fibers are not functional due to any cause, the grantee shall provide fully operational dark fibers at no cost to the grantor.

(iii)

The city may interconnect such dark fibers to any other wireline telecommunications system.

(iv)

In lieu of providing all or a portion of the dark fibers, the city may accept other services, facilities, funds, or other financial arrangements similar in value to the provision of dark fibers.

(4)

Nature of franchise fee. The compensation and other payments to be made pursuant to the franchise are in addition to any and all taxes and fees or charges which the grantee or any affiliated person shall be required to pay to the grantor or to any other governmental authority. Neither the grantee nor any affiliated person shall have or make any claim for any deduction or other credit of all or any part of the amount of compensation or other payments made pursuant to the franchise against any other fees or charges, including ad valorem taxes and/or any taxes which the grantee or any affiliated person is required to pay to the grantor.

(d)

Security fund.

(1)

Fund deposit. Within 30 days after the effective date of the franchise, the grantee shall deposit into a bank account, established by the city and maintained on deposit through the term of the franchise, the sum of up to $100,000.00, or, at grantee's option, grantee shall post a performance bond in accordance with the applicable city procedures, in an amount of up to $100,000.00, however, where a Franchise has been granted to a Grantee for the operation of a Distributed Antenna System, the Grantee shall deposit into a bank account, established by the City and maintained on deposit through the term of the Franchise, the sum of $25,000.00, or at Grantee's option, Grantee shall post a performance bond in accordance with the applicable City procedures, in the amount of $25,000.00, in either case, unless a different amount is specified in the franchise, as security for:

a.

The faithful performance by it of all of the provisions of the franchise; and

b.

Compliance by grantee with all orders, permits and directions of any agency of the grantor having jurisdiction over grantee's acts or defaults pursuant to this Act; and

c.

The payment by the grantee of any claims, liens, fees and/or taxes due the grantor which arise by reason of the construction, operation or maintenance of the system.

The maintenance of such bank account shall be a continuing obligation of grantee until the grantee has satisfied all of its obligations with the grantor that may have arisen from the acceptance of the franchise by the grantee or from its exercise of any privilege or right granted thereby. Alternatively, the grantee may provide such other instrument, security, or guaranty which is acceptable to the grantor. It is the intent of grantor that the security fund be established in an amount or have a value sufficient to effectuate the purposes set forth in subsections a., b., and c. above.

(2)

Failure to pay. If the grantee:

a.

Fails to pay to the Grantor any fees due and unpaid; or

b.

Fails, after ten days notice, to repay to the Grantor any damages, costs, or expenses which the Grantor shall be compelled to pay by reason of any act or default of the Grantee in connection with the Franchise;

c.

Fails to pay the Grantor any fees due as a result of any transactions which have the effect of circumventing payment of such required fees and/or the evasion of any such payment by noncollection or nonreporting of Gross Revenues, bartering, or any other means which evades the actual collection of revenues for business pursued by the Grantee; or

d.

Fails, after 30 days notice of such failure, to comply with any provision of the Franchise which the Grantor reasonably determines can be remedied by an expenditure of the Security Fund;

Then the Grantee shall have committed a material violation of the Franchise and in that event the Grantor may immediately withdraw the amount thereof, from the Security Fund. Upon such withdrawal, the Grantor shall notify the Grantee of the amount and date thereof.

(3)

Restoration of Fund. Within 30 days after notice to Grantee that any amount has been withdrawn by the Grantor from the Security Fund pursuant to this Section, the Grantee shall deposit a sum of money sufficient to restore such Security Fund to the original amount.

(4)

Return upon expiration. In the event that the Franchise is terminated by reason of default by Grantee, to the extent that such default is for nonpayment of any amount due and payable pursuant to the Franchise, an amount of the Security fund equal to the amount of the nonpayment shall become the property of the Grantor. The Grantee, however, shall be entitled to the return of such Security Fund, or portion thereof, as remains on deposit at the expiration of the term of the Franchise, or upon termination of the Franchise at an earlier date, provided that there is then no outstanding default on the part of the Grantee.

(5)

Rights of Grantor. The rights reserved to the Grantor with respect to the Security Fund are in addition to all other rights of the Grantor whether reserved by this Act or authorized by law, and no action, proceeding or exercise of a right with respect to such Security Fund shall affect any other right the Grantor may have.

(6)

Construction Bond. Grantor may require a construction bond from Grantee.

(e)

Damages and Defense.

(1)

Hold Harmless. The grantee shall hold the Grantor harmless for all damages and penalties suffered as a result of, or arising out of, the Grantee's negligent use, installation, maintenance, repair and/or operation of the Wireline Telecommunications System authorized whether or not any act or omission complained of is authorized, allowed, or prohibited by the Franchise. This provision is not intended to create liability for the benefit of third parties but is solely for the benefit of the Grantor and the Grantee. In the event any claim is made against the City that falls under this indemnity and a court of competent jurisdiction should adjudge, by final decree, that the Grantor is liable therefor, the Grantee shall indemnify and hold the Grantor harmless of and from any such judgment or liability, including any court costs, expenses, and attorney fees incurred by the Grantor in defense thereof. Upon commencement of any proceeding at law or in equity against the Grantor relating to or covering any matter covered by this indemnity, where the Grantee has agreed, by accepting the Franchise, to indemnify and hold the Grantor harmless, or to pay such final judgment and costs, as the case may be, the Grantor shall give the Grantee immediate notice of such suit or proceeding. The Grantee shall provide a defense to any such suit or suits, including any appellate proceedings brought in connection therewith, and pay as aforesaid, any final judgment or judgments that may be rendered against the Grantor by reason of such damage suit. Upon failure of the Grantee to comply with the "defense of suit" provisions of this Act, after reasonable notice to it by the Grantor, the Grantor shall have the right to defend the same and in addition to being reimbursed for any such judgment that may be rendered against the Grantor, together with all court costs incurred therein, the Grantee shall reimburse the Grantor for attorney's fees, including those employed by the Grantor in such case or cases, as well as all expenses incurred by the Grantor by reason of undertaking the defense of such suit or suits, whether such suit or suits are successfully defended, settled, compromised, or fully adjudicated against the Grantor.

(2)

Defense Expense. The Grantee shall pay all expenses incurred by the Grantor in defending itself with regard to all damages and penalties mentioned in subsection (e) above and for all claims against Grantor arising out of the Franchise. These expenses shall include all out-of-pocket expenses, such as attorney fees, and shall also include the reasonable value of any services rendered by any employees of the Grantor. In the event the Grantor is compelled to undertake the defense of any such suit by reason of the Grantee's failure to perform as here and above provided, the Grantor shall have the full right and authority to make or enter into any settlement or compromise of such adjudication as the City Council shall deem in the best interest of the Grantor, this without the prior approval or consent of the Grantee with respect to the terms of such compromise or settlement.

(f)

Liability Insurance and Indemnification.

(1)

Except as provided in Section 30-50(f)(3) below, the Grantee shall maintain, throughout the term of the Franchise, liability insurance naming both the Grantee and the Grantor as insureds with regard to all damages mentioned in subsection (e) above, in the minimum amounts shown below:

a.

Workmen's Compensation (if applicable): $100,000.00/$500,000.00/$100,000.00

b.

Commercial General Liability: $2,000,000.00 each occurrence; $2,000,000.00 Aggregate

c.

Motor Vehicle: $2,000,000.00 CSL (Combined Single Limit)

d.

Builder's Risk "All Risk": 100 percent of Contract Amount

(2)

Grantee shall, at its own expense, maintain in full force and effect throughout the duration of the Franchise, a liability insurance policy or policies underwritten by a carrier rated by Best's as either A or AA and licensed to do business in the State of Louisiana, and a copy of such policy or policies shall be submitted to Grantor. Such policy or policies shall name the City of New Orleans, including its boards and commissions and its officers, agents and employees, jointly and severally, as named insureds. Such policy or policies shall apply as primary insurance and shall stipulate that no other insurance in effect by the Grantor will be called on to contribute to a loss covered hereunder and shall provide for a waiver of subrogation in favor of the Sewerage & Water Board of New Orleans. Upon the effective date of the franchise, the grantee shall furnish proof to the grantor that satisfactory insurance policies have been obtained. A copy of the certificate of insurance shall be on file with the department of finance and maintained current at all times. Such policy or policies shall provide 45 days' prior notice to the director if the policy or policies should be canceled or materially changed.

(3)

In the event grantee is self-insured, then in lieu of the certificate of insurance required herein, grantee shall provide grantor upon the effective date of the franchise, proof that grantee's self-insurance program is sufficiently liquid to cover all losses in the amount shown in subsection (1) above. Grantee shall immediately notify grantor of any change in its self-insured status and of any change in the ability of grantee to cover the losses specified in subsection (1) above.

(g)

Costs of auditors and consultants. As necessary aid in the analysis and/or audit of all matters relative to the franchise, the grantor shall be entitled to employ services of an auditor and/or consultant. Any and all costs incurred by the grantor in this regard shall be borne by the grantee if any violations of its franchise or this Act are identified in such audit, analysis or consult, as provided in sections 158-661 and 158-691 of the City Code.

(M.C.S., Ord. No. 17,560, § 1, 6-6-96; M.C.S., Ord. No. 20808, § 1, 8-8-02; M.C.S., Ord. No. 21480, § 1, 4-1-04; M.C.S., Ord. No. 22082, §§ 4—7, 11-17-05)