A CONTRACT FRANCHISE ORDINANCE GRANTED TO L R COMMUNICATIONS, INC., A TELECOMMUNICATIONS LOCAL EXCHANGE SERVICE PROVIDER PROVIDING LOCAL EXCHANGE SERVICE WITHIN THE CITY OF STERLING, KANSAS.BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF STERLING, KANSAS:

SECTION 1. A contract franchise ordinance is hereby granted to L R Communications, Inc. d/b/a Mutual TeleCommunications ("MTC"), pursuant to K.S.A. 2002 Supp. 12-2001, for a telecommunications local exchange service provider, and pursuant FCC regulations 47 U.S.C. § 573, for a cable television service provider, providing local exchange service within the City of Sterling subject to the provisions contained hereafter. The initial term of this ordinance shall be for a period beginning November 31, 2011, and ending December 31 ,2020. Compensation for said contract franchise ordinance shall be established pursuant to Section 3 of this ordinance.

SECTION 2. For the purpose of this contract franchise ordinance, the following words and phrases and their derivations shall have the following meaning:

“Access line”, shall mean and be limited to retail billed and collected residential lines; business lines; ISDN lines; PBX trunks and simulated exchange access lines provided by a central office based switching arrangement where all stations serviced by such simulated exchange access lines are used by a single customer of the provider of such arrangement. Access line may not be construed to include interoffice transport or other transmission media that do not terminate at an end user customer's premises, or to permit duplicate or multiple assessment of access line rates on the provision of a single service or on the multiple communications paths derived from a billed and collected access line. Access line shall not include the following: Wireless telecommunications services, the sale or lease of unbundled loop facilities, special access services, lines providing only data services without voice services process by a telecommunications local exchange service provider or private line service arrangements.

“Access line count” means the number of access lines serving consumers within the corporate boundaries of the city on the last day of each month.

“Access line fee” means a fee determined by a city, up to a maximum as set out in K.S.A. 2002 Supp. 12-2001 and amendments thereto, to be used by a telecommunications local exchange service provider in calculating the amount of access line remittance.

“Access line remittance” means the amount to be paid by a telecommunications local exchange service provider to a city, the total of which is calculated by multiplying the access line fee, as determined in the city, by the number of access lines served by that telecommunications local exchange service provider within that city for each month in that calendar quarter.

“FCC” means the Federal Communications Commission, or successor governmental entity thereto.

“Franchise” means the initial authorization, or renewal thereof issued by the Franchising Authority, whether such authorization is designated as a franchise, permit, license, resolution, contract, certificate, agreement or otherwise, which authorizes the construction and operation of the Telecommunications System.

"Franchising Authority" means the City of Sterling or the lawful successor, transferee, or assignee thereof.

"Gross receipts" means only those receipts collected from within the corporate boundaries of the city enacting the franchise and which are derived from the following: (A) Recurring local exchange service for business and residence which includes basic exchange service, touch tone, optional calling features and measured local calls; and (B) nonrecurring service revenue which shall include customer service for installation of service, reconnection of service and charge for duplicate bills. All other revenues, including, but not limited to, revenues from extended' area service, the sale of lease of unbundled network elements, nonregulated services, carrier and end user access, long distance, wireless telecommunications services, lines providing only data service without voice services processed by a telecommunications local exchange service provider, privateline service arrangements, internet, broadband and all other services not wholly local in nature are excluded from gross receipts. Gross receipts shall be reduced by bad debt expenses. Uncollectible and late charges shall not be included within gross receipts.

"Local exchange service" means local switched telecommunications service within any local exchange service area approved by the state corporation commission, regardless of the medium by which the local telecommunications service is provided. The term local exchange service shall not include wireless communication services.

"Provider" shall mean a local exchange carrier as defined in subsection (h) of K.S.A. 66-1,187, and amendments thereto, or a telecommunications carrier as defined in subsection (m) of K.S.A. 66-1,187, and amendments thereto.

"Public right-of-way• means only the area of real property in which the city has a dedicated or acquired right-of-way interest in the real property. It shall include the area on, below or above the present and future streets, alleys, avenues, roads, highways, parkways or boulevards dedicated or acquired as right-of-way. The term does not include the airwaves above a right-of-way with regard to wireless telecommunications or other nonwire telecommunications or broadcast service, easements obtained by utilities or private easements in platted subdivisions or tracts.

“Service Area” means the present municipal boundaries of the Franchising Authority, and shall include any additions thereto by annexation or other legal means.

“Telecommunications local exchange service provider" means a local exchange carrier as defined in subsection (h) of K.S.A. 66-1, 187, and amendments thereto, and a telecommunications carrier as defined in subsection (m) of K.S.A. 66-1, 187, and amendments thereto, which does, or in good faith intends to, provide local exchange service. The term telecommunications local exchange service provider does not include an interexchange carrier that does not provide local exchange service, competitive access provider that does not provide local exchange service or any wireless telecommunications local exchange service provider.

"Telecommunications services" means providing the means of transmission, between or among points specified by the user, of information of the user's choosing, without change in the form or content of the information as sent and received.

SECTION 3. Compensation made pursuant to this contract franchise ordinance shall be paid on a quarterly basis without invoice or reminder from the City and paid not later than forty-five (45) days after the end of the remittal period. For the first year of this contract franchise ordinance, said compensation shall be a sum equal to five percent (5%) of gross receipts. Thereafter, compensation for each calendar year of the remaining term of the contract franchise ordinance shall continue to be based on a sum equal to 5 percent (5%) of gross receipts; unless the City notifies MTC prior to ninety days (90) before the end of the calendar year that it intends to increase or decrease the percentage of gross receipts for the following calendar year or that it intends to switch to an access line fee for the following calendar year. In the event City elects compensation based on an access line fee, nothing herein precludes City from switching back to a gross receipts fee provided City notifies MTC prior to ninety days (90) before the end of the calendar year that it intends to elect a gross receipts fee for the following calendar year. The franchise fee payable hereunder shall be paid and received in lieu of any tax, license, charge, fee or any other character of charge for use and occupancy of the Public Right of Way. The period of limitation for recovery of any franchise fee payable hereunder shall be three (3) years from the date on which payment by MTC is due. Any increased access line fee or gross receipt fee shall be in compliance with the public notification procedures set forth in subsections (l) and (m) K.S.A. 2002 Supp. 12-2001 and the Cable Act.

SECTION 4. The city shall have the right to examine, upon written notice to the provider, no more than once per calendar year, those records necessary to verify the correctness of the compensation paid pursuant to this contract franchise ordinance.

SECTION 5. As a condition of this contract franchise ordinance, MTC is required to obtain and is responsible for any necessary permit, license, certification, grant, registration or any other authorization required by any appropriate governmental entity, including, but not limited to, the City, the Federal Communications Commission (FCC) or the Kansas Corporation Commission (KCC), subject to MTC's right to challenge in good faith such requirements as established by the FCC, KCC or other City Ordinance. MTC shall also comply with all applicable laws, statutes and/or ordinances, subject to MTC's right to challenge in good faith such laws, statutes and/or ordinances.

SECTION 6. If requested by City, in order to accomplish construction and maintenance activities directly related to improvements for the health, safety, and welfare of the public, MTC shall remove its facilities from the public right of way or shall relocate or adjust its facilities within the public right of way at no cost to the City. Such relocation or adjustment shall be completed as soon as reasonably possible within the time set forth in any request by the City for such relocation or adjustment. Any damages suffered by the City or its contractors as a result of MTC's failure to timely relocate or adjust its facilities shall be borne by MTC.

SECTION 7. Permission is hereby granted to MTC to trim trees upon and overhanging streets, alleys, sidewalks and public places of said city so as to prevent the branches of such trees from coming in contact with MTC's facilities, all the said trimming shall comply with all applicable laws, statutes and/or ordinances.

SECTION 8. Nothing herein contained shall be construed as giving MTC any exclusive privileges, nor shall it affect any prior or existing rights of MTC to maintain a telecommunications system within the City.

SECTION 9. MTC shall comply with the applicable rules and regulations of the FCC regarding emergency alert systems (47 C.F.R. Part 11) and 911 service.

SECTION 10. Any required or permitted notice under this contract franchise ordinance shall be in writing. Notice upon the City shall be delivered to the city clerk by first class United States mail or by personal delivery.

Notices or responses to the Franchising Authority shall be addressed as follows:

City of Sterling

Rod Willis, City Manager

114 N. Broadway

P.O. Box287

Sterling, KS. 67579

Notice upon MTC shall be delivered by first class United States mail or by personal delivery to:

Mutual Telecommunications

Jimmy Todd, General Manager

365 Main Street

P. 0. Box 338

Little River, Kansas 67 457

SECTION 11. Failure to Enforce. The failure of either party to enforce and remedy any noncompliance of the terms and conditions of this contract franchise ordinance shall not constitute a waiver of rights nor a waiver of the other party's obligations as provided herein.

SECTION 12. Force Majeure. Each and every provision hereof shall be subject to acts of God, fires, strikes, riots, floods, war and other disasters beyond MTC's or the City's control.

SECTION 13. This contract franchise ordinance is made under and in conformity with the laws of the State of Kansas. No such contract franchise shall be effective until the ordinance granting the same has been adopted as provided by law.

(12-19-2011)