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
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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
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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
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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
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