(1) As consideration for the use of City’s public rights-of-way, Astound Broadband shall remit to City a franchise fee which shall equal seven percent of its gross revenues earned, less bad debts, from the provision of telecommunications services within the City. The franchise fee payment shall be due quarterly and payable within 45 days after the close of the preceding calendar quarter. Each payment shall be accompanied by a brief report prepared by a representative of Astound Broadband showing the basis for the computation.

(2) In the event the maximum allowable franchise fee is increased or decreased by applicable law, the City may hold a public hearing on such matter to obtain input from subscribers and Astound Broadband and may thereafter unilaterally increase or decrease the percentage amount of the franchise fee.

(3) “Gross revenues” means any revenue received by Astound Broadband and all its affiliates from the operation of the facilities to provide telecommunications services in the City; provided, however, that such phrase shall not include: (a) any tax, fee or assessment of general applicability collected by Astound Broadband from subscribers for pass-through to a government agency; (b) any revenue derived from the provision of Internet access services where such franchise revenue is expressly prohibited by Federal or State law; and (c) unrecovered bad debt. For purposes of this section, the term “affiliate” shall mean an entity providing service within the service area and which provides “telecommunications services,” as contractors, subcontractors, assignees, or subsidiaries of, for and at the request of Astound Broadband during the term of this franchise.

(4) The franchise fee required under this section: (a) shall not take effect until Astound Broadband begins construction, and (b) thereafter, shall be payable quarterly. City shall have the right, upon 48 hours’ notice and during normal business hours, to conduct or cause to be conducted an audit of gross revenues as defined herein for the purpose of ascertaining whether Astound Broadband’s franchise fee payments have met the requirements of this franchise. Any difference of payment due either the City or Astound Broadband following audit shall be payable within 30 days after written notice to the affected party. Neither party is entitled to recover any under- or over-payment more than three years after the payment’s due date. In lieu of all or a portion of the payments required under this section, Astound Broadband may provide telecommunications or other services to the City. Any agreement for the provision of such services will be as mutually agreed by the parties in separate documentation. The offset value of any such services provided to the City will be determined based on the standard rates Astound Broadband charges to third­party customers for substantially equivalent services. (Ord. 119 § 7, passed 1-12-2016)