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HomeMy WebLinkAbout20250828EX 4 WOW June 6 2024 Letter to Avista.pdf Exhibit 4 WOW's June 6, 2024 Letter to Avista WIRED DR WIRELESS, INC. Date: June 06, 2024 Subject: Demand Letter from Avista to WOW. Heather Rosentrater President and CEO—Avista Corp Heather, I am writing this letter to ask for a meeting with you, Vern, and Jessie to resolve the 3 main issues we discussed during our last meeting. I have attached meeting notes from our meeting on Feb 16th, 2024. As a review—there were 3 issues discussed— 1. The Audit and Pole Count. 2. Increase in Fees and Back Charging, and 3. Stop Work Order. WOW has received a demand letter from Todd Colton—Avista Senior Legal Counsel that puts our previous progress in jeopardy. This legal demand letter from Avista makes WOW believe Avista is aggressively moving towards litigation. This saddens WOW, since WOW has bent over backwards to be a good partner to Avista—for example WOW stepped up to take over the Avista Edge customers when Avista exited Cheney, WA as a favor to AVISTA—even though WOW is continually losing business on the AVISTA Edge customers but felt it was important when asked as a partner to help—that WOW stepped up and did. I'd like to review the 3 issues and propose WOW's solution. The first issue of pole count in the Hope and Clark Fork area is agreed upon to be 561 poles. Although it is argumentative and disheartening for the Avista legal department to claim that the actual count is some kind of concession, case in point Avista's own employee Jesse Butler, has confirmed in writing that the 561 count is accurate. So, this is not a concession—it's just facts. The second issue of fees and back charging is the main crux of the issues. Avista provided WOW with the pole count in a letter attached to our Joint Use agreement for signature. For 14 years, Avista updated the pole count and invoiced WOW. The fact that Avista operated differently than the contract seems to indicate for 14 years and is now trying to back charge at an increased rate of 354% is outrageous. Avista should not be penalizing a customer for Avista's mistakes. Avista never sent emails, letters or had meetings to discuss any part of this contract for 14 years. WOW took over the cable company in Clark and Hope Fork and has maintained cable frequencies and channels throughout its ownership. This is to the FCC regulations as being considered a cable company. 17813 East Appleway Ave Office:(509)892-5877 Fax:(509)892-5876 Spokane Valley,WA 99016 www.wow-tel.com To add to this WOW is launching new cable content services that will add an enhanced layer of qualifying and eliminate any confusion as to their pole rate qualification as a cable company. The claim that"Avista is prohibited by statue from charging WOW the cable television rate because WOW is a telecom service provider," is wrong. The name of WOW is Wired or Wireless—the company provides lots of different services to customers and has licenses to operate in 3 different states with services that include cable and telecommunications. WOW will agree to pay the 2023 year's bill, at the 561-pole count, at the cable rate. This payment can be paid within 15 days of this letter. WOW also agrees to pay the 2024 year's bill at the 561 (or the 2024 year's adjusted number based on work), at the cable rate. WOW also agrees to provide any additional documentation that Avista would like to see that in fact they are maintaining cable content. WOW will also give the updated pole count each year—now that both parties are re-aware that it is a key part of the responsivities in the contract. WOW would also like to have Avista put in writing that they will not reopen this particular contract to back billing and that the issue is settled and both parties are moving forward. The third issue is the stop work order that was resolved—but is now again a major issue. The initial stop work order was based on the confusion over what work was or was not being done. This has been resolved and the stop work order was lifted. Having the stop work order originally created immeasurable harm to WOW and lost WOW customers, revenue, and reputation. As of February—the stop order was lifted, and the crew has been preparing to start building now that the weather is good. The Avista legal letter that placed a"new" stop work order on WOW adds insult to injury. Avista expects to resolve and receive payment, but they ensure that WOW cannot supply services to customers who have been waiting for over 2 years. WOW needs the stop work order lifted to maintain business operations to be able to both work with Avista and provide services to customers. WOW asks that the stop work order be lifted. WOW will work with Vern and Jessie to make sure that WOW is compliant with all partner requirements moving forward. The remaining new issue, that was not part of the initial discussion, is that Avista is now asking WOW to execute a new pole license agreement but has not shared this agreement with them yet. This is unacceptable to WOW. WOW cannot comment on the new agreement, or will it agree to a new contract when they haven't even seen it. The aggressive legal demand letter from Avista puts WOW in a difficult position. The letter asks for WOW's legal counsel to call and talk to them. Is Avista trying to take a matter that is almost resolved and shift it to a full legal matter and possible litigation? WOW has no desire to be in a legal fight with Avista over contracts but will head that direction if forced to. And if WOW is forced to defend themselves, they will involve every jurisdiction, legal entity and the public in their defense. Conclusion: WOW is willing to move forward with a cable rate fee based on current pole counts and yearly review. WOW is willing to pay 2023 fees based on the cable rate and requests that the Avista lift the stop work order. WOW does not agree to have back billing at a rate that is not their historical rate, or their billing rate classification designated and accepted by the FCC. WOW also asks for time to review any changes 17813 East Appleway Ave Office:(509)892-5877 Fax:(509)892-5876 Spokane Valley,WA 99016 www.wow-tel.com that might be part of a new pole agreement and will not agree to a new contract they have never seen. WOW is willing to have a sit-down meeting with Heather, Vern and Jessie to finalize any remaining details in hopes that Avista is willing to work with smaller cable and internet service providers and get this resolved. WOW feels that Avista is pushing WOW into litigation and regrets that they have become an aggressive partner. But WOW is willing to defend itself against being unduly targeted by Avista. Sincerely, William B. Geibel, Jr. President See Attached: 1. Copy of demand letter from Avista. 2. Copy of Email from Jesse Butler. 3. Copy of Original Joint Use letter from Avista to WOW. 17813 East Appleway Ave Office:(509)892-5877 Fax:(509)892-5876 Spokane Valley,WA 99016 www.wow-tel.com DocuSign Envelope ID:8A76FFCC-72AD-4B8A-853E-F49140220A97 May 15, 2024 VIA: Email and FedEx William B. Geibel, Jr., President Wired or Wireless, Inc. 17813 E. Appleway Ave. Spokane Valley, WA 99016 bil Ii r(a)wow-tel.com RE: Comprehensive Settlement Offer("Offer") regarding uncured defaults under the Joint Use Master License Agreement, between Wired or Wireless, Inc./AIR-PIPE ("Licensee" or "WOW") and Avista Corporation ("Licensor" or "Avista"), dated October 8, 2009 (the "Agreement"). Dear Mr. Geibel: Avista is providing WOW with this Offer to cure multiple defaults under the Agreement, as describe in more detail below: Default 1: Late Payment of Annual Rent Invoice Avista provided you with an invoice for 2023 Annual Rental Billing on or about October 25, 2023, in the amount of$49,053.12, which was due and payable, pursuant to the Agreement, on or about November 24, 2023. Section 5 of the Agreement provides thirty(30)days to pay your rental billing for the prior year. Avista sent you a Notice of Default for nonpayment on or about February 13, 2024 ("Notice"). As of the date this Offer,Avista has not received your payment. This delinquency is a default under the Agreement. Default 2: Refusal to Pay True-Up Rent Invoice Section 3.6 of Exhibit G of the Agreement, among other things, permits Avista to audit WOW's facilities and issue true-up invoices based on the results of such audit. After performing an audit,to which your participation was invited, Avista provided you with an invoice for True-Up Rental Billing on or about December 14, 2023, in the amount of$334,288.80, which was due and payable pursuant to the Agreement on or about January 13, 2024. Section 3.6(a)(2) of Exhibit G of the Agreement provides thirty (30) days to pay your True-Up Rental Billing. Avista included this default in the Notice it sent you on or about February 13, 2024. As of the date this Offer, Avista has not received your payment. Since your receipt of the Notice, there have been several communications between WOW, its representatives, and Avista. One issue that was raised was WOW's desire to be charged the cable television rate for its attachments rather than the telecom rate. Unfortunately, Avista is prohibited by statute from charging WOW the cable television rate because WOW is a telecom service provider. Another issue raised by WOW was its desire to use lower attachment numbers than the numbers identified by Avista in its audit. Avista identified 702 attachments of which 322 were deemed unauthorized, whereas WOW claimed 561 attachments of which it claims 181 were unauthorized. Although Avista stands by its numbers, in 1 DocuSign Envelope ID:8A76FFCC-72AD-4B8A-853E-F49140220A97 Offer—WOW May 15, 2024 the interest of amicably resolving this matter, Avista is willing to use the WOW attachment numbers to calculate a revised Annual Rental Billing and a revised True-Up Rental Billing set forth below. As an additional concession, Avista will eliminate the three(3x) multiplier on unauthorized attachments that is prescribed by the Agreement. As a result, Avista makes the following comprehensive settlement offer for WOW to cure the aforementioned defaults and return to doing business with Avista with respect to pole attachments: ■ WOW must pay Avista the revised Annual Rental Billing amount of$39,121.08 within thirty (35) days of the date of this Offer; ■ WOW must pay Avista the revised True-Up Rental Billing amount of$61,769.40 within thirty(35) days of date of this Offer; ■ WOW must execute a new Pole License Agreement (the "PLA") to replace the existing Agreement. Avista will provide WOW with the new PLA within a week after Avista receives payment of all amounts due as set forth herein; and ■ WOW must execute a definitive Settlement and Release Agreement (the "Settlement Agreement") with Avista that incorporates the terms of this Offer. Avista will provide the Settlement Agreement to WOW within a week of WOW providing confirmation that the terms of this Offer are agreeable. Notwithstanding any prior conversations with Avista representatives regarding work on WOW's existing infrastructure, WOW must not make any new attachments or modify existing attachments on Avista's poles, and Avista will not process any attachment applications from WOW, until all the above conditions of settlement are met. This is an offer of settlement only, and Avista reserves all rights in connection with the Agreement and at law. If you have any questions about this, please feel free to contact me at todd.colton cDavistacorp.com or 509-495- 2344 or have your lawyer contact me. Sincerely, -hDxuSigne�d,by, I o' t bin O F6A3W29B8467... Senior Counsel cc: Vern Malensky, Jesse Butler 2 William Geibel Jr From: Butler,Jesse <Jesse.Butler@avistacorp.com> Sent: Thursday, February 29, 2024 12:17 PM To: William Geibel Jr Cc: Malensky,Vern Subject: WoW/Avista meeting Hi Bill, It was great meeting with you today and I think we made a lot of progress. I wanted to make sure I sent something out capturing what was discussed today. Please see my notes below: • The true up invoice was discussed today and the Avista team will continue to work through this challenge so that we can get you a response. • Telecom vs Cable rates were also discussed today. WoW is currently being charged the Telecom rate which is substantially higher than the Cable rate. Again,the Avista Team is committed to getting back to you with a response as to which rate will be applied. • The pole replacement in question on the Hope Peninsula was discussed. Avista has agreed to pay for this pole replacement and not charge WoW. • Avista will recognize WoW's reported number of 561 attachments instead of the 704 the audit identified. WoW will work on removing inactive cable and hardware. • The "stop work"order that was in place has been lifted: O WoW has Avista's approval to remove old hardware and clean up their system in addition to wrecking out old coax cable and replacing it with lighter fiber. o WoW can start submitting applications for new attachments and overlash. o WoW will keep Avista in the loop on the progress being made cleaning up old inactive cable and material. Hopefully I didn't miss anything. Once again,thank you for your time today Bill. Looking forward to working with you and your team. Jesse Butler MANAGER I JOINT USE 1411 E MISSION AVE I MSC-46 I SPOKANE,WA 99202 PHONE 208-786-6930 1 CELL 208-290-8222 www.myavista.com �lli- _ _ �ilr V'/STA CONFIDENTIALITY NOTICE:The contents of this email message and any attachments are intended solely for the addressee(s)and may contain confidential and/or privileged information and may be legally protected from disclosure.If you are not the intended recipient of this message or an agent of the intended recipient,or if this message has been addressed to you in error, please immediately alert the sender by reply email and then delete this message and any attachments. 1 /IIo_ Avista Utilities IIIIVISTAK 1411 East Mission MSC-50 PO Box 3727 Utilities Spokane,Washington 99220-3727 Telephone 509-489-0500 Toll Free 800-727-9170 Facsimile 509-495-8573 September 3, 2009 Wired or Wireless, Inc/AIR-PIPE Mr. William Geibel, Jr. 17813 E. Appleway Avenue Spokane Valley, WA 990016 Subject: Joint Use Master License Agreement to Wired or Wireless, Inc dba Air Pipe for Signature Dear Mr. Geibel: Thank you for your time the other day to discuss your business's intentions to acquire some existing cable TV systems within Avista's service territory. Enclosed are two original Joint Use Master License Agreements between Wired or Wireless, Inc dba Air Pipe (Wired/Wireless) and Avista Utilities. Please have both agreements signed on the two pages with signature arrows and return to me. I will have the signing completed and return one to you for your file. You may keep the Exhibits for your use. My mailing address is: Avista Utilities PO Box 3727 Spokane, WA 99220 Attn: Janine Seibel— MSC 50 The Avista pole counts on record for the communities your business is interested in acquiring are as follows: Hope/Clark Fork cable TV system is attached to 377 Avista owned poles. The cable TV system in Malden is attached to 82 Avista owned poles. Verizon Communications serves these communities and owns poles, also.The TV facilities are likely attached on poles owned by Verizon and you would need to secure a separate pole attachment agreement with them. Wired/Wireless is also obligated to notify the governing authorities in each of these communities about its intent on these acquisitions and obtain a franchise agreement if one is required. A Certificate of Liability Insurance is due immediately based on the terms in the enclosed Agreement naming Avista Utilities as additionally insured. Please have this sent to me at the same address noted above. I have also enclosed a copy of the Joint Use Check list and of Avista's Joint Use Overhead Construction Standards. These Standards need to apply to all the facilities you have acquired. Please be advised that the cable TV systems you are inquiring to purchase/take over will be on an "as is" basis. It will be Wired/Wireless's responsibility to bring any of the installations to code compliance. The Performance Bond requirement of the Agreement would be payable to Avista Utilities to cover the terms and provisions of the Agreement, including but not limited to, an inspection audit to identify and An affiliate of Avista Corp. correct pole attachments that are not in compliance with standards and codes. The amount of this bond is expected to be $25,000 initially and this amount may change depending on the scope of work to be determined. If you have any questions, please feel free to call me at (509) 495-4478 or Frank Meland at (509)495- 4270. Sincerely, Janine Seibel Joint Use Specialist janine.seibel@avistacorp.com Enclosures 2