Chapter 5.21 CABLE COMMUNICATIONS SYSTEMS

(1) Establishing a regulatory framework to administer franchises to ensure that the Clovis community benefits from the potential recreational, educational, social, economic and other advantages of cable, open video, and other related services;

(2) Regulating the operations of franchises to protect and promote the public health, peace, safety and welfare;

(3) Establishing a local policy concerning the franchising of cable systems, open video systems, and private communication systems that use the public rights-of-way or other public property;

(4) Promoting the availability of diverse, multi-media information resources to the community;

(5) Providing for enhanced educational opportunities throughout the community and building a stronger community;

(6) Encouraging the provision of advanced and competitive cable or open video system services on the widest possible basis to the residents, businesses, and institutions of the City; and

(7) Encouraging economic development while preserving aesthetic and other community values and preventing proliferation of above ground facilities.

(b) The provisions of this section shall not be deemed to confer any right upon a franchisee that is not otherwise conferred by another express provision of this chapter. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.101 Captions.

The captions to provisions throughout this chapter are intended solely to facilitate reading and reference to such provisions of this chapter. Such captions shall not affect the meaning or interpretation of this chapter. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.102 Computation of time.

(a) Computation. Unless otherwise indicated, when the performance or doing of any act, duty, matter, or payment is required under this chapter or any franchise, and a period of time or duration for the fulfillment of doing thereof is prescribed and is fixed herein, the time shall be computed so as to exclude the first and include the last day of the prescribed or fixed period of time, unless the last day is a holiday, and then it is also excluded as stated in subsection (b) of this section.

(b) Holiday. If the last day for the performance of any act provided or required by law to be performed within a specified period of time is a holiday, then that period is extended to and includes the next day that is not a holiday. For purposes of this section, “holiday” means all day on Saturdays and every full day designated by Section 6700 of the California Government Code, including that Thursday of November declared by the President to be Thanksgiving Day but excluding September 9, known as “Admission Day.” (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.103 Severability.

If any term, condition, or provision of this chapter shall, to any extent, be held to be invalid or unenforceable by a valid order of any court or regulatory agency, the remainder hereof shall be valid in all other respects and continue to be effective. In the event of a subsequent change in applicable law so that the provision that had been held invalid is no longer invalid, said provision shall thereupon return to full force and effect without further action by the City and shall thereafter be binding on the franchisee and the City. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.104 Transitional provisions.

(a) Franchise application required for operators without franchise. An operator of any cable communications system that is in operation, installed and/or providing services to subscribers as of the effective date of this chapter, but does not have a franchise agreement with the City as of the effective date of this chapter, shall file the appropriate application(s) with the City for a franchise by no later than three (3) months after the effective date of this chapter. An operator who timely files such an application under this section shall not be subject to a penalty for failing to obtain a franchise so long as the application is pending with and the City has not rejected or denied said application. Nothing herein relieves an operator from liability for failing to obtain any permit or other authorization required under other provisions of the City’s Municipal Code or other applicable laws. Further, nothing herein shall prevent the City from requiring an operator to remove any facilities installed in violation of the Municipal Code or any other applicable laws.

(b) Existing franchises must comply with chapter. Any franchisee holding a cable communications system franchise as of the effective date of this chapter shall, in addition to all the obligations and duties prescribed by the terms of the franchisee’s existing franchise, be subject to the requirements of this chapter, except where the provisions of this chapter directly conflict with an existing franchise agreement or where prohibited by applicable law. Nothing herein is intended to invalidate a lawful, existing franchise or to waive any obligations imposed by such a franchise. Upon any renewal of the franchise or extension of the term of the franchise, the franchise and the franchisee shall be fully subject to the provisions of this chapter.

(c) Pending franchise applications subject to chapter. Pending applications for a cable communications system franchise shall be subject to this chapter. A person with a pending application shall have thirty (30) days from the effective date of this chapter to submit additional information to comply with the requirements of this chapter governing applications. (§ 4, Ord. 05-23, eff. September 1, 2005)

Article 2. Definitions

5.21.200 Definitions of words and phrases: Applicability of article.

Unless the particular provision or the context requires, the definitions and provisions contained in this article shall govern the construction, meaning, and application of words and phrases used in this chapter. Whenever any words or phrases used in this chapter are not defined, but are defined in Title 47 of the United States Code and amendments thereto, such definitions shall apply, and if not defined therein, their common and ordinary definitions shall apply. The definition of each word or phrase shall constitute, to the extent applicable, the definition of each word or phrase which is derivative from it, or from which it is a derivative, as the case may be. When not inconsistent with the context, words used in the present tense include the future tense; words in the plural number include the singular number; and words in the singular number include the plural number; and the masculine gender includes the feminine gender. References to governmental entities (whether persons or entities) refer to those entities or their successors in authority. If specific provisions of law referred to herein are renumbered, then the reference shall be read to refer to the renumbered provision. References to laws, ordinances or regulations shall be interpreted broadly to cover government actions, however nominated, and include laws, ordinances and regulations now in force or hereinafter enacted or amended. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.201 Access, PEG access, or PEG use.

“Access,” “PEG access,” or “PEG use” refers to the availability of a cable system or open video system for public, education or government use (including institutional network use) by various agencies, institutions, organizations, groups, and individuals (including the City and its designated access providers) to acquire, create, and/or distribute programming, not under a franchisee’s editorial control, and advertise to the extent authorized by law, including without limitation channel capacity designated for public, educational, or governmental use, and facilities and equipment for the use of such channel capacity. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.202 Affiliate.

“Affiliate” means a person that directly or indirectly owns or controls, is owned or controlled by, or is under common ownership or control with, another person. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.203 Application.

“Application” means any application, proposal submission, or request, including any and all documents and materials submitted therewith, filed pursuant to the requirements of this chapter to obtain, modify, transfer, or extend a franchise. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.204 Application fee.

“Application fee” means a charge to recover the City’s actual costs of processing applications hereunder. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.205 Basic service.

“Basic service” means any service tier which includes the retransmission of local television broadcast signals. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.206 Cable Act.

“Cable Act” means the Cable Communications Policy Act of 1984, 47 U.S.C. Sections 521 et seq., as amended by the Cable Television Consumer Protection and Competition Act of 1992, as further amended by the Telecommunications Act of 1996, and as may further be amended from time to time. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.207 Cable communications system.

“Cable communications system” refers to open video systems (OVS) and cable systems. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.208 Cable operator.

“Cable operator” means any person or group of persons (a) who provides cable service over a cable system and, directly or through one or more affiliates, owns a significant interest in such cable system; or (b) who otherwise controls or is responsible for, through any arrangement, the management and operation of such a cable system. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.209 Cable service.

“Cable service” means (a) the one-way transmission to subscribers of video programming or other programming service, and subscriber interaction, if any, which is required for the selection or use of such video programming or other programming service, or (b) any other programming or service which may lawfully be characterized as a cable service. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.210 Cable system.

(a) “Cable system” means a facility, consisting of a set of closed transmission paths and associated signal generation, reception, and control equipment, designed to provide cable service to multiple subscribers within a community, and shall include CATV and any other system that may lawfully be characterized as a cable system. Any reference to a cable system includes the cable system as a whole, or any part thereof, including all facilities, pedestals, equipment cabinets, electronic equipment and devices appurtenant to the cable system.

(b) “Cable system” does not include:

(1) A facility that only retransmits the television signals of one or more television broadcast stations;

(2) A facility serving subscribers without using or connecting to a facility that uses any public rights-of-way within the City;

(3) A facility of a common carrier subject, in whole or in part, to the provisions of Title II of the Communications Act of 1934, as amended, except that such facility shall be considered a cable system to the extent such facility is used in the transmission of video programming directly to subscribers, unless the extent of such use is solely to provide interactive on-demand services;

(4) Any facilities of any electric utility used solely for operating its electric utility systems; or

(5) An OVS that complies with 47 U.S.C. Section 573 and is certified by the FCC as an OVS. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.211 Channel.

“Channel” means a portion of the electromagnetic frequency spectrum which is used in a cable system or OVS and which is capable of delivering a television signal whether in an analog or digital format. This definition does not restrict the use of any channel to transmit analog television signals or one-way transmission. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.212 City.

“City” means the City of Clovis and all departments, divisions, and agencies thereof. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.213 City Manager.

“City Manager” means the City Manager of the City or his or her authorized designee(s). (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.214 Construction, operation or repair.

“Construction,” “operation” or “repair” and similar formulations of these terms mean the named actions interpreted broadly, encompassing, among other things, installation, extension, maintenance, replacement of components, relocation, undergrounding, grading, site preparation, adjusting, testing, make-ready, and/or excavation. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.215 Council.

“Council” means the City Council of the City. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.216 Downstream channel.

“Downstream channel” means a channel designed and activated to carry a transmission from the headend to other points on a cable communications system, including interconnections. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.217 Education access.

“Education access” or “education use” means access where accredited educational institutions are the primary or designated programmers or users having editorial control over their communications. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.218 FCC.

“FCC” means the Federal Communications Commission. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.219 Facilities.

“Facilities” means any physical element used or designed to be used to provide cable services, whether or not located in the public rights-of-way, including, without limitation, pedestals, cabinets, ducts and conduits (whether empty or occupied), transformers, equipment, drains, handholds, lines, line extensions, service drops, manholes, poles, power supplies, generators, splice boxes, surface location markers, vaults, tunnels, amplifiers, power guards, nodes, cables, and fiber optics (whether active or dark). (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.220 Formal renewal or formally renew.

“Formal renewal” or “formally renew” means renewal of a cable system franchise pursuant to the provisions set forth in 47 U.S.C. Section 546, subdivisions (a) to (g), of the Cable Act. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.221 Franchise.

“Franchise” means an initial authorization, or renewal thereof, granted by the City to a cable operator or an operator of a cable communications system, giving the operator the nonexclusive right to occupy the space or use facilities upon, across, beneath, or over public rights-of-way or portions thereof in the City, to provide specified services within a franchise area. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.222 Franchise area.

“Franchise area” means the area or portion of the City that a franchisee is authorized to serve by the terms of its franchise or by operation of law. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.223 Franchise documents.

“Franchise documents” refers to the provisions of this chapter, the map defining any franchise area for the franchise as adopted by resolution of the Council, any request for proposals issued by the City pursuant to this chapter in connection with the franchise, the application for the franchise submitted by the franchisees, the resolution by the Council granting the franchise and any amended resolution(s) issued thereafter, the certificate of acceptance of the franchise by the franchisee, any franchise agreement between the City and the franchisee, and all other documents and instruments approved or adopted by the City. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.224 Franchisee.

“Franchisee” refers to a cable operator or a person who operates a cable communications system to whom the City has granted a franchise to operate and maintain a cable communications system within the city limits of the City. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.225 Franchise fee.

“Franchise fee” means the fee payable to the City, as provided in this chapter and the franchise agreement, in consideration of the City’s grant of a franchise for a franchisee to construct, install, operate, or provide services using facilities in the public rights-of-way, expressed as a percentage of gross revenues or some other measure. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.226 Government access or government use.

“Government access” or “government use” means access, where government institutions or their designees are the primary or designated programmers or users, having editorial control over their communications. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.227 Gross revenues.

“Gross revenues” means all cash, credits, property, or other consideration of any kind or nature, and any contributing grant or subsidy, received directly or indirectly by a franchisee and its affiliates, from any source whatsoever arising from, attributable to, or in any way derived from a franchisee’s operation of a cable communication system within the franchise area, including but not limited to fees charged to subscribers for basic service; fees charged to subscribers for any optional, premium, per-channel, or per-program service; monthly fees charged to subscribers for any tier of service other than basic service; installation, disconnection, re-connection, and change-in-service fees; leased channel fees; fees, payments, or other payment received as consideration from programmers for carriage of programming on the cable system; converter rentals or sales; studio rental, production equipment, and personnel fees; advertising revenues, including a per capita share of advertising revenues for advertising carried on more than one cable system; revenues from home shopping channels; sales of programming guides; and such other revenue sources as may now exist or hereafter develop. The definition shall be interpreted in a manner that permits the City to collect the maximum franchise fee permitted by law, irrespective of the source of revenue. Gross revenues, however, shall not include any bad debt (defined as unpaid subscriber or advertiser accounts), any taxes on services furnished to a franchisee and imposed directly upon any subscriber or user by the state, City, or other governmental unit and collected by a franchisee on behalf of said governmental unit. The amount paid as a franchise fee shall not be deducted from gross revenues unless required to be deducted under applicable law. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.228 Informal renewal or informally renew.

“Informal renewal” or “informally renew” means renewal of a cable system franchise other than pursuant to the provisions set forth in 47 U.S.C. Section 546, subdivisions (a) to (g), of the Cable Act. This term shall refer to the alternative renewal procedures set forth in 47 U.S.C. Section 546, subdivision (h), of the Cable Act or such other renewal procedures as may be agreed upon between the franchisee and the City. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.229 May or can.

“May” or “can” refers to actions that are permissive. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.230 Open video system or OVS.

“Open video system” or “OVS” means a facility consisting of a set of transmission paths and associated signal generation, reception, and control equipment that is: (a) designed to provide cable service, including video programming, to multiple subscribers within a community, (b) certified by the FCC as an open video system, and (c) complies with the requirements of 47 U.S.C. Section 573. A reference to an OVS includes pedestals, equipment enclosures (such as equipment cabinets), amplifiers, power guards, nodes, cables, fiber optics and other equipment necessary to operate the OVS, or installed in conjunction with the OVS. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.231 Other programming services.

“Other programming services” means information that a cable operator makes available to all subscribers generally. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.232 Person.

“Person” includes any individual, corporation, partnership, association, joint stock company, trust, government entity, or any other legal entity. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.233 Public access or public use.

“Public access” or “public use” means access where organizations, groups, or individual members of the general public, on a nondiscriminatory basis, are the primary or designated programmers or users having editorial control over their communications. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.234 Public rights-of-way.

“Public rights-of-way” means the surface of and the space above and below any street, road, highway, freeway, bridge, lane, path, alley, court, sidewalk, parkway, drive, utility right-of-way, right-of-way easement or any other easement primarily granted or dedicated to travel, public or quasi-public services, now or hereafter existing within the City, which may be properly used for the purpose of installing, maintaining, and operating a cable communications system; and any other property that a franchisee is entitled by state or federal law to use by virtue of the grant of a franchise. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.235 Public property.

“Public property” means any property that is owned or under the control of the City, including but not limited to any public rights-of-way, buildings, parks, utility and light poles, or other structures on property owned by or leased to the City. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.236 Revocation.

“Revocation” means the City’s affirmative act of terminating a franchise. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.237 School.

“School” means any accredited primary school, secondary school, college, or university. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.238 Shall or will.

“Shall” or “will” refers to actions that are mandatory. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.239 Subscriber.

“Subscriber” means the City or any person who is lawfully receiving, for any purpose or reason, any cable service via a cable communications system, whether or not a fee is paid for such service. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.240 Termination.

“Termination” means the conclusion of a franchise by any means, including, but not limited to, by expiration of its term, abandonment, or revocation. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.241 Transfer.

(a) “Transfer” means any transaction involving one or more of the following:

(1) All or a portion of any cable communications system facilities or any rights to use or operate such facilities located in the public rights-of-way are sold, conveyed, transferred, assigned, encumbered and/or leased, in whole or in part, directly or indirectly, by one or more transactions to another person or group of persons, whether voluntarily, by operation of law, or otherwise.

(2) There is any change or transfer in the identity of the person in control of the franchisee or any person who controls the franchisee, including, without limitation, forced or voluntary sale, merger, acquisition, consolidation, or receivership. For purposes of this clause, any transfer or cumulative transfer of a voting interest by a person or group of persons of ten percent (10%) or more of the franchisee, or of a person who controls the franchisee, or of any change in the managing general partners of a franchisee is a change of control.

(3) There is any change or transfer of control of the franchisee and/or its direct or indirect parents, including, without limitation, forced or voluntary sale, merger, acquisition, consolidation, or receivership.

(4) Any rights or obligations of the franchise are sold, conveyed, transferred, assigned, encumbered (except as set forth herein) or leased, in whole or in part, directly or indirectly, by one or more transactions to another person, whether voluntarily or by operation of law or otherwise.

(b) “Transfer” does not include:

(1) A lease to a UVPP pursuant to 47 U.S.C. Section 532 or 573;

(2) The transmission of a commodity or electronic signal using facilities on a common carrier basis;

(3) A lease or other right to use facilities mandated pursuant to 47 U.S.C. Section 224; or

(4) A pledge in trust, mortgage or other encumbrance against the facilities, or any portion thereof, given to a bona fide institutional lender in connection with a loan or other financing required to secure the construction, operation, or repair of the facilities (“loan”); provided, that such loan is subject to the rights and powers of the City pursuant to the franchise and applicable law, including, without limitation, the right of the City to approve any transfer upon assignment or foreclosure.

5.21.242 Unaffiliated video programming provider or UVPP.

“Unaffiliated video programming provider” or “UVPP” means any person who uses capacity on a cable communications system to deliver cable service or other communications service to subscribers and who is not an affiliate of the franchisee. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.243 UVPP fees.

“UVPP fees” means fees payable by a UVPP that provides services using a cable system for which charges are assessed to subscribers, but are not received by the cable system franchisee, payable to City in lieu of a franchise fee on such service pursuant to the franchise fee calculation contained in the cable communications system franchise. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.244 Upstream channel.

“Upstream channel” means a channel designed and activated to carry transmissions from a point on the cable system, other than the headend, to the headend or another point on the cable system. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.245 User.

“User” means a person or the City utilizing a channel, capacity or equipment and facilities for purposes other than in the capacity of a subscriber. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.246 Video programming.

“Video programming” means programming provided by, or generally considered comparable to programming provided by, a television broadcast station. (§ 4, Ord. 05-23, eff. September 1, 2005)

Article 3. General Provisions

Sub-Article 3.1. Applicability of Article: Resolution of Conflicts in Franchise Documents

5.21.300 Applicability of article.

Except as otherwise provided, the provisions of this article apply to cable systems and open video systems. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.301 Resolution of conflicts in franchise documents.

Conflicts in terms, conditions or provisions between the franchise documents shall be resolved as follows:

(a) The express terms of this chapter shall prevail over conflicting or inconsistent provisions in any other franchise documents;

(b) The express terms of any amended and restated resolution regarding a franchise issued to any franchisee shall prevail over conflicting or inconsistent provisions in any other franchise documents, including any prior amended and restated resolution, except the express terms of this chapter;

(c) The express terms of the resolution offering the franchise shall prevail over conflicting or inconsistent provisions in any other franchise document, except the express terms of this chapter and any subsequently adopted, amended and restated resolution regarding the franchise;

(d) The express terms of the request for proposals shall prevail over conflicting or inconsistent provisions in the application for the franchise or the certificate of acceptance of the franchise;

(e) The express terms of the application for the franchise shall prevail over inconsistent or conflicting provisions in the certificate of acceptance of the franchise; and

(f) The provisions in Articles 4 and 5 shall prevail over the provisions in this article. (§ 4, Ord. 05-23, eff. September 1, 2005)

Sub-Article 3.2. Authority and Rights of City

5.21.302 General authority of City and City Manager to administer chapter and franchises.

(a) Authority of City.

(1) Implementation and amendment of chapter. The City shall exercise regulatory authority and administer this chapter and any franchise granted hereunder, and may from time to time modify or amend this chapter. The City may further, from time to time, adopt regulations or resolutions to implement the provisions of this chapter. This chapter and any regulations and resolutions adopted hereunder are not contracts with any franchisee, and the City may modify or amend them at any time.

(2) Administration of public, educational and government access channels. The City may designate one or more persons or entities, including itself or a nonprofit organization or corporation, to control and manage the use of public, educational and government access channels, facilities and equipment.

(3) Participation in joint regulatory agency. If the cable communications system operated by a franchisee also serves other contiguous or neighboring communities, the City may, at its sole option, participate in a joint regulatory agency, and delegate its responsibility in the area of cable and related communications.

(4) Intervention in proceeding. The City may, with the permission of the relevant court or administrative tribunal, intervene in any suit or proceeding involving a cable communications system franchise granted by City.

(5) Inspection of cable communications system and facility. The City may inspect from time to time as it determines to be proper any cable communications system and facility within the city limits of the City. A franchisee shall respond to any request by the City for information regarding its cable communications system and plans for such system, including requests for information regarding the franchisee’s plans for construction, operation or repair of the cable communications systems and the purpose for such construction, operation or repair.

(b) Authority of City Manager. The City Manager is authorized to administer the provisions of this chapter and any franchise granted pursuant thereto, to provide any notices (including noncompliance notices), and to take any action on the City’s behalf that may be required hereunder or under applicable law, consistent therewith.

(c) No waiver. The failure of the City or City Manager, upon one or more occasions, to exercise a right or to require compliance or performance under this chapter, a franchise, or any other applicable law shall not be deemed to constitute a waiver of such right or a waiver of compliance or performance, unless such right has been specifically waived in writing by the City or City Manager, as may be applicable. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.303 City’s use of poles and conduit of franchisees.

The City shall have the right to install and maintain, free of charge, upon any poles or in any conduit owned by a franchisee any wire and pole fixture that does not unreasonably interfere with the operations of the franchisee’s cable communications system and facility. (§ 4, Ord. 05-23, eff. September 1, 2005)

Sub-Article 3.3. Termination, Revocation, and Other Remedies Against Franchisee

5.21.304 Grounds for termination, revocation, or other actions against a franchise generally.

(a) Grounds for termination, revocation or other actions against a franchise generally. The City may revoke, terminate, reduce the term of, or take any other actions against a franchise for any reasons not prohibited by law, including, but not limited to, one or more of the following:

(1) A franchisee failed to comply with the requirements of this chapter, any other franchise documents, and/or other applicable laws;

(2) A franchisee defrauded or attempted to defraud the City or subscribers;

(3) A franchisee engaged in any conduct that endangers the health, welfare or safety of the public;

(4) A franchisee failed to commence and diligently pursue and complete construction within the plan and time schedule submitted to the City;

(5) A franchisee refused or failed to file any of the reports or documents required by this chapter or other applicable laws; and/or

(6) Federal regulations or statutory provisions governing cable system and OVS are declared invalid or unenforceable, or are repealed.

(b) Foreclosure or other sale. In the event of foreclosure, or other public or judicial sale of any of the facilities, equipment or property of a franchisee, the City may, after notice and a public hearing as provided in this chapter, revoke or terminate the franchise unless:

(A) The City has approved the transfer of the franchise to the successful bidder in a manner consistent with this article; and

(B) The successful bidder has covenanted and agreed with the City to assume and be bound by the terms and conditions of the franchise, this chapter, and other franchise documents. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.305 Automatic termination of franchise.

(a) A franchise terminates automatically by force of law one hundred twenty (120) calendar days after an assignment for the benefit of creditors or the appointment of a receiver or trustee to take over the business of the franchisee, whether in a receivership, reorganization, liquidation, bankruptcy assignment for the benefit of creditors, or other action or proceeding.

(b) The City may reinstate the franchise if:

(1) Such assignment, receivership or trusteeship has been vacated; or

(2) Such assignee, receiver or trustee has fully complied with the terms and conditions of the franchise documents, and has executed an agreement, approved by any court having jurisdiction, assuming and agreeing to be bound by the terms and conditions of this chapter and other franchise documents. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.306 Notice and opportunity of franchise to cure default, and exceptions thereto.

(a) Opportunity to cure. Except as to violations that are not curable or deemed incurable, and as provided hereinafter, a franchise may only be revoked or its term reduced, or other actions taken against the franchise, if the franchisee: (1) was given written notice of the default; (2) provided at least thirty (30) calendar days to cure the default; and (3) the franchisee failed to cure the default within thirty (30) calendar days. A franchisee may request additional time to cure the default and the City Manager, in its sole discretion, may grant such additional time where good cause is shown. To be effective, such grant of additional time must be in writing.

(b) No opportunity to cure. No opportunity to cure is required for repeated violations, and fraud and attempted fraud shall be deemed incurable. Further, the City may declare a franchise forfeited without opportunity to cure where a franchisee (1) ceases to provide service it is required to provide to provider under this chapter or other applicable laws; or (2) transfers the franchise without the prior written consent of the City. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.307 Notice and hearing regarding enforcement actions.

(a) Notice of hearing. If the franchisee fails to cure or the violations are not curable, the City Manager may place upon the agenda of a meeting of the Council his or her request to revoke or terminate a franchise, reduce the term of the franchise, or take other actions against a franchise. In such case, the City Manager shall cause to be served upon the affected franchisee, at least fifteen (15) calendar days prior to the date of such meeting of the Council, a written notice setting forth the City Manager’s recommended action(s), and the time and place of the Council meeting where the hearing will be held.

(b) Hearing. At the hearing, which shall be public, the franchisee shall be provided the opportunity to present evidence and oral argument to support its position. The Council may hear any persons interested in the matter and consider any relevant information presented to it by any person. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.308 Remedies available to City against franchise.

(a) Remedies generally. After a hearing, the Council, at its option, may take one or more of the following actions against a franchisee:

(1) Revoke, terminate, or reduce the term of the franchisee’s franchise granted by the City;

(2) If a franchisee fails to perform or fails to cause the performance of required work within the time provided for performance, the City may, at its sole option, perform the work and bill the franchisee therefor.

(3) Take any other actions not prohibited by law.

(b) Notice of Council determination. After the hearing, the City shall provide the affected franchisee with written notice of the Council’s final determination as to the remedies and action(s) to be taken against the franchise and the franchisee.

(c) Enforcement and remedies upon revocation or termination of franchise. Upon termination, revocation, or forfeiture of a franchise, whether by action of the City as provided above or by passage of time, the City may require that one or more of the following occur:

(1) Cease use and operation of cable communications system. The franchisee shall cease using and operating the cable communications system and facilities for the purposes authorized by the franchise.

(2) Possession and removal of the franchisee facilities. The City may take possession of some or all of the franchisee’s facilities, or require the franchisee or its bonding company to remove or require the removal of some or all of the franchisee’s facilities from public rights-of-way and public property, and restore the affected property to its same or better condition. This provision does not permit the City to remove facilities that are used to provide another service for which the franchisee holds a valid franchise issued by the City.

(3) Sale of cable communications system by franchisee. Within one hundred eighty (180) days after a termination, revocation, or forfeiture of a franchise, and regardless of the exercise of any right of the City hereunder, the affected franchisee may sell, remove, or (by means divesting the franchisee of all right, title, and interest) transfer the entire cable communications system and facilities, subject to the provisions of this chapter. Upon any such sale or transfer, in addition to any other rights hereunder or otherwise, the City shall have a lien (next in order of preference to any liens or encumbrances existing of record on the date of such termination and forfeiture) against any and all proceeds thereof, and against the franchisee and/or its cable communications system, in the full amount of any loss, cost, expense or other financial detriment, including attorney’s fees and costs, incurred by City in the exercise of any right hereunder, or by reason of such termination or forfeiture.

(4) Forfeiture and sale of cable communications system by City.

(A) If a franchisee fails or refuses to sell, remove or transfer the entire system of the franchisee, as provided above, and regardless of the exercise of any other right of the City hereunder, all of the properties, facilities, records, files, rights, privileges, powers, authorities, and immunities of the franchisee that are part of the franchisee’s cable communications system shall, at the City’s option and by operation of law, become the property of the City, subject to any and all valid liens or encumbrances of record, and the system shall belong to the City.

(B) The franchisee shall cause to be executed, acknowledged, and delivered to the City, upon demand therefor, such instruments as the City Attorney shall prescribe and approve, evidencing or affecting the ownership or control of any of the same in the City.

(C) In the event the system of the franchisee shall become the property of the City, as herein provided, then the City may solicit and call for offers to purchase such system, by bid process or any other process determined by the City to be appropriate. The City may, in the manner provided in this chapter, solicit and call for offers and applications for franchise, and may specify, as a term and condition thereof, that any such offer and application shall include the purchase of such system from City.

(5) Operation of cable communications system by City. The City shall, without further notice and hearing, have the right, upon a finding by resolution of the Council that service is not being satisfactorily rendered to subscribers and without further notice or process, to enter and take possession of all properties, facilities, records and files of the franchisee; to exercise all of the rights, privileges, powers, authorities and immunities of the franchisee that are a part of the system of the franchisee; to operate the system; and to provide the services thereof, in the same manner, and to the same extent, in all respects, as existed in the franchisee. The franchisee shall not cause or permit any avoidance, hindrance, interference, or delay in the exercise of such right by the City.

(d) Remedies cumulative. Remedies provided for under this chapter or under a franchise shall be cumulative. Recovery by the City of any amounts under insurance, the performance bond, the security fund or letter of credit does not limit a franchisee’s duty to indemnify the City; or relieve a franchisee of its franchise obligations or limit the amounts owed to the City. Nothing herein shall be construed to obligate or require the City to exercise any right of the City hereunder. City shall at no time be obligated or required to undertake or assume the ownership or operation of any cable communications system or to provide any cable service. (§ 4, Ord. 05-23, eff. September 1, 2005)

Sub-Article 3.4. Franchise Requirement and Consequences for Failure To Obtain

5.21.309 Franchise required for cable communications system.

No person may construct, operate or maintain a cable communications system in the City without first obtaining a franchise from the City. No provision of this article may be deemed or construed to require the City to grant a franchise when, in the determination of the Council, it is in the public interest to restrict the number of franchisees to one or more. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.310 Persons or entities not required to obtain franchise.

The following persons or entities shall not be required to obtain a franchise under this chapter:

(a) The City; or

(b) An UVPP that is only delivering cable service or other communications service to subscribers. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.311 Consequences for failure to obtain a franchise.

A person’s failure to obtain and maintain a franchise as required by this chapter may, at the City’s discretion and option, result in one or more of the following:

(a) Forfeiture, by operation of law, of the person’s facilities located on public property that are not authorized by a franchise; and/or

(b) A requirement that the facilities be removed and sites restored, and that costs, penalties and damages be paid; and/or

Sub-Article 3.5. Franchise Application and Issuance Process Generally

5.21.312 Application requirement for franchise.

(a) Form of application. After the effective date of this chapter, the City Manager shall formulate application form(s) that comply with this chapter and other applicable law, and that shall be used by applicants to apply for a franchise with the City. The City Manager may amend, from time to time, the application form(s) as he or she determines to be proper or necessary, or as required by applicable law.

(b) Application required. Except as otherwise provided, any person seeking to obtain, transfer, extend the duration of or renew a franchise, or modify the services offered thereunder shall submit a signed original of its application and six (6) copies to the City Clerk, along with any other documents required by other applicable laws.

(c) Application not required. Requests for other types of modifications to a franchise may be processed and approved by the City without an application. However, nothing herein shall prevent the City from requiring an application in the event the City determines, based on the nature of the requested modification, that the public interest would best be served by the submission of an application.

(d) Process and consideration of application. The City shall process and make a determination on each application as provided in this chapter and other applicable laws. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.313 Environmental analysis required.

Prior to issuance of a franchise under this chapter, one or more environmental analyses shall be undertaken, at the franchisee or applicant’s sole expense, pursuant to the provisions of the California Environmental Quality Act commencing at Section 21000 of the Public Resources Code and any other applicable law. The provisions of this chapter, requests for proposals, and resolution offering the franchise shall be subject to amendment for the purpose of implementing any changes dictated by the environmental analysis. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.314 Form of issuance and acceptance of franchise.

(a) Issuance by resolution. All franchises shall be issued in the form of a resolution adopted by the Council.

(b) Acceptance by Certificate of Acceptance.

(1) All franchises shall be accepted by the franchisee in writing in the form of a certificate of acceptance to become effective. Such acceptance shall be and operate as an acceptance of each and every term, condition, and limitation contained in this chapter, any franchise agreement, the provisions of the resolution(s) granting the franchise and any modifications or amendments thereto, and all other documents and instruments approved or adopted by the City.

(2) The franchisee shall file with the City Clerk the written certificate of acceptance before 12:00 p.m. of the seventh calendar day following the Council’s adoption of the resolution granting such franchise. If such written certificate of acceptance is not filed as herein required, the franchisee shall be deemed to have rejected and repudiated the franchise, and, thereafter, the acceptance of such a franchisee shall not be received or filed by the City Clerk, and such franchisee shall have no rights, remedies, or redress, unless and until the Council, by resolution, determines that the franchisee’s certificate of acceptance be received and filed, and then upon such terms and conditions as the Council may impose. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.315 Transfers of franchise.

(a) Prior approval required. Every franchise shall be deemed to be held in trust and personal to the franchisee. Any transfer that is made without the prior approval of the City shall be deemed to impair that trust and shall not be effective as against the City.

(b) Exception for mortgages. Notwithstanding any other provision of this chapter, pledges in trust or mortgages of the assets of a cable communications system to secure the construction, operation, or repair of the system may be made without application and without the City’s prior consent. However, no such arrangement may be made without application and without the City’s prior consent if it would in any respect under any condition: (1) prevent the franchisee or any successor from complying with the franchise documents and applicable law; or (2) permit a third party to succeed to the interest of the franchisee, or to own or control a cable communications system, without the prior consent of the City. Any mortgage, pledge or lease shall be subject to and subordinate to the rights of the City under any franchise, this chapter and other applicable law. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.316 Annexation of new territory.

(a) New territory contiguous to franchise area or one franchise area. Where any new territory is annexed to the City, and such territory is contiguous to any franchise area in the City or there is at the time of the annexation of such new territory only one franchise area in the City, such new territory shall become, by operation of law, a part of said franchise area upon the date such annexation becomes final, and said franchise area shall thereafter be deemed enlarged to include the addition of such new territory, unless the Council shall direct franchisees of a franchise hereunder and any interested parties to submit applications for such new territory or the new territory is already being served by another cable communications system franchisee.

(b) New territory not contiguous to franchise area and more than one franchise area. Where any new territory is annexed to the City, and such territory is not contiguous to any franchise area and there is more than one franchise area in the City, the Council shall direct existing franchisees and/or any interested parties to submit applications for such new territory.

(c) Council review of applications. Any applications submitted pursuant to this section shall be reviewed and acted upon by the City as provided in this article and such new territory shall become a part of the franchise area of the applicant(s) determined by the Council to be best suited to provide service to such territory. The appropriate franchisee(s), as determined by the Council, shall diligently and promptly make cable services available to any new territory after the annexation thereof becomes final. (§ 4, Ord. 05-23, eff. September 1, 2005)

Sub-Article 3.6. Fees, Costs, Liquidated Damages, and Administrative Penalties of Franchise: Interest

5.21.317 Application fees and costs.

(a) Fee and costs. An applicant shall pay all fees and costs incurred by the City related to the processing of an applicant’s application. Processing costs shall include, but not be limited to, the costs of services rendered by any City employee, agent or representative, including consultants and attorneys, and the expenses for any publication in connection with the City’s granting of a franchise to the applicant.

(b) Deposit. The initial franchise application fee deposit shall be a minimum of ten thousand dollars ($10,000.00) and may be adjusted (reduced or increased) by the City in appropriate circumstances as determined by the City. The deposit shall be submitted with the application. The City may, as costs are incurred, draw upon the deposit to pay for the costs, including, but not limited to, the cost of the consultants who the City has retained to assist the City in considering and processing an application. The City Manager, at any time, may require the applicant to deposit additional sums if the City Manager determines that the initial deposit or subsequent deposits will be exhausted prior to the City’s final action on the application. The City will not continue consideration of an application until such time as franchisee has deposited the additional amount required by the City Manager. If the amount deposited by an applicant is more than the City’s total costs to review and consider the application, the City shall return any excess amount to applicant. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.318 Payment of franchise fees and fees in lieu of franchise fees.

(a) Quarterly payment. The franchise fee required by this chapter shall be paid quarterly unless otherwise specified in the franchise. Each payment shall be made to the City not later than forty-five (45) days after the end of each calendar quarter.

(b) Receipt of payment. The City’s acceptance of any payment shall not 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 City may have for additional sums payable.

(1) Quarterly. Unless a franchise provides otherwise, a franchisee or other entity subject to a franchisee fee shall file with the City within forty-five (45) calendar days of the end of each calendar quarter a statement showing gross revenues during the preceding quarter and the number of subscribers served.

(2) Final. Within ninety (90) calendar days of the date a franchisee ceases operations under a franchise (whether because of franchise termination, transfer, bankruptcy or for any other reason), the franchisee shall file a final statement of gross revenues covering the period from the beginning of the calendar year in which the operations ceased to the date operations ceased. The statement shall contain the information and be certified as required by this chapter.

(d) Tax, fee or other assessment. Neither the franchise fee nor the fee paid in lieu of the franchise fee is a payment in lieu of any tax, fee or other assessment of general applicability (including any such tax, fee or assessment imposed on both utilities and cable operators or their services, but not including a tax, fee, or assessment which is unduly discriminatory against cable operators or cable subscribers). (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.319 Interest on overdue fees and costs.

The franchisee shall make any fees, costs or other assessments within thirty (30) days of the date of the billing statement. If the City does not receive payment of the amounts billed on or before the due date, the franchisee will be charged interest on any overdue amounts from the due date at the lesser of the maximum rate then allowable by law or three percent (3%) above the rate for three-month Federal Treasury Bills at the most recent United States Treasury Department sale of such Treasury Bills occurring prior to the due date of the overdue amounts. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.320 Liquidated damages and administrative penalties.

(a) Right of City to require payment. In addition to or in lieu of other enforcement or remedies set forth in this chapter, the City shall have the right to require a franchisee to pay administrative penalties and liquidated damages as provided in this section, any other franchise documents, or other applicable laws. Administrative penalties and liquidated damages shall be paid in amounts and payable in the manner required by law, the City’s master fee schedule and/or as specified in the franchise for breaches of the franchise, including but not limited to failure to commence construction, failure to meet construction plan benchmarks, failure to comply with rebuild plan benchmarks, failure to commence service, and material breach of franchise obligation(s) under this chapter or any other applicable laws. The franchise shall also provide that the City may claim and/or setoff such penalties and liquidated damages owed from the franchisee’s performance bond and security deposit.

(b) Notice and appeal. Administrative penalties and liquidated damages shall be assessed only following a minimum thirty (30) days’ written notice thereof to the affected franchisee, and subject to the City’s administrative appeal process set forth in Chapter 1.4 of the City’s Municipal Code.

(c) Penalties for violation of customer service standards. For violation of cable customer service standards, penalties will be imposed as follows:

(1) Two hundred dollars ($200.00) for each day of each material breach, not to exceed six hundred dollars ($600.00) for each occurrence of material breach;

(2) If there is a subsequent material breach of the same provision within twelve (12) months, four hundred dollars ($400.00) for each day of each material breach, not to exceed twelve hundred dollars ($1,200.00) for each occurrence of the material breach;

(3) If there is a third or additional material breach of the same provision within twelve (12) months of the first, one thousand dollars ($1,000.00) for each day of each material breach, not to exceed three thousand dollars ($3,000.00) for each occurrence of the material breach;

(4) Any penalty assessed under this section will be reduced dollar for dollar to the extent any other penalty or liquidated damage provision of a franchise imposes a monetary obligation on a franchisee for the same customer service failures, and no other monetary damages may be assessed. The City will provide notice, and impose penalties, under this section consistent with the procedures established by California Government Code Section 53088.2(r).

(d) Fixing other administrative penalties. In fixing administrative penalties, other than for violations of customer service standards, the City shall be guided by the following principles:

(1) Penalties shall exceed the financial benefits to a franchisee delaying or failing to comply with the applicable requirement;

(2) Even where such benefits are not easily discernible, the penalties shall be high enough to have a significant deterrent effect on a franchisee; and

(3) Penalties shall be sufficient to protect against loss of revenues resulting from violations.

(e) Commencement of penalties and liquidated damages. Penalties and liquidated damages shall commence on that date that performance was due and/or failed, and continue until the franchisee demonstrates to the satisfaction of the City that the franchisee has fully performed its obligations giving rise to the payment of penalties and liquidated damages.

(f) No effect on franchise fee or other obligations. A franchisee’s obligation to pay penalties and liquidated damages does not in any way affect its obligation to pay franchise fees or perform other obligations under the franchise documents. Penalties and liquidated damages do not constitute franchise fees and are not subject to any limitations on franchise fees contained in 47 U.S.C. Section 542(b). Penalties and liquidated damages paid by franchisee are not costs of satisfying franchise requirements as provided in 47 C.F.R. Section 76.925. Franchisee shall not pass the cost of any penalties and liquidated damages to subscribers through subscriber rates or itemize, or otherwise identify on subscriber bills, any obligation franchisee may have to pay penalties and liquidated damages. (§ 4, Ord. 05-23, eff. September 1, 2005)

Sub-Article 3.7. Franchise Rights and Obligations: Duration of Franchise

5.21.321 Rights and obligations of franchisees.

(a) Franchise nonexclusive. No franchise shall be exclusive, prevent the City from issuing other franchises or authorizations, or prevent the City from itself constructing, operating, or repairing its own cable communications system.

(b) Privilege subordinate to other prior or existing franchises. Any privilege granted by the City pursuant to a franchise shall be subordinate to any prior or existing lawful occupancy or use of any public rights-of-way or other public property, or to the grant of any privilege under any other franchise of prior date, whether hereunder or otherwise, insofar as there shall be any conflict respecting such privilege rendering the same unable to be exercised by all or any number of franchisees.

(c) Rights granted by franchise. A franchise authorizes and permits a franchisee to construct, operate, maintain and repair a cable system or an OVS (as applicable), and to provide cable service in the City, and for that purpose to erect, install, construct, repair, replace, reconstruct, maintain facilities appurtenant to such cable system or OVS in, on, over, under, upon, across, and along those public rights-of-way or public property that the City may authorize a franchisee to use access. A franchise shall not convey rights other than as specified in this chapter and the franchise documents; no rights shall pass by implication.

(d) Franchisee to bear all cost. Unless otherwise specifically stated in a franchise or required by law, all acts that a franchisee is required to perform under the franchise, this chapter, or applicable law must be performed at the franchisee’s sole expense.

(e) Identification of franchisee representatives. A franchisee shall clearly identify its field representatives and vehicles by name tags, signs or other documents.

(f) Maintaining local address. A franchisee shall maintain throughout the term of its franchise a local address for service of notices by mail.

(g) Filing of franchisee contracts. Within one hundred eighty (180) calendar days after the granting of a new franchise or renewal of an existing franchise, or within such extended period of time as the Council in its discretion may authorize, a franchisee shall file with the City Clerk copies of all contracts that the franchisee has entered into with public utility companies, including but not limited to SBC Communications, Inc. and Pacific Gas & Electric, whereby franchisee is granted any right to use any of the property, equipment or facilities of such utility companies in the operation of a franchise. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.322 Rights not granted by a franchise.

(a) Franchise not in lieu of other authorizations. A franchise does not include and is not a substitute for, and does not relieve franchisee of the responsibility for:

(1) Complying with requirements for the privilege to transact and operate a business within the City, including but not limited to complying with the conditions the City may establish before constructing facilities for or providing noncable services;

(2) Any permit, license, agreement or authorization required in connection with operations on or in public rights-of-way or other public property, including, by way of example and not limitation, encroachment and/or street works permits and related permit fees; or

(3) Any permits or agreements for occupying any other property of the City or private entities to which access is not specifically granted by the franchise.

(b) Compliance with other laws. A franchise does not relieve a franchisee of its duty to comply with all governmental and regulatory requirements, including the City’s municipal codes, ordinances and regulations, and each franchisee must comply with the same. Likewise, the rights granted under a franchise are subject to the exercise of legislative, police and other powers that the City now has or may later obtain, including but not limited to the power of eminent domain.

(c) Franchise not a grant of property rights. A franchise does not convey title, equitable or legal, in the public rights-of-way or other public property. Rights granted by the City to franchisee to use or access public rights-of-way or public property may not be subdivided or subleased or otherwise transferred without the express written consent of the City. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.323 Duration of franchise, and continuity of service upon expiration, termination or revocation of franchise.

(a) Term. Each franchise shall be for a term not to exceed ten (10) years.

(b) Continuity of Service. Upon the expiration, termination, or revocation of a franchise, the City may require the franchisee to continue to operate a cable communication system for a defined period of time not to exceed twenty-four (24) months from the date of such expiration or revocation. The franchisee shall, as trustee for its successor-in-interest, continue to operate the cable communication system under the terms and conditions of the franchise documents and to provide the regular cable service and any of the other services that may be provided at that time. The City shall be permitted to seek legal and equitable relief to enforce the provisions of this section. (§ 4, Ord. 05-23, eff. September 1, 2005)

Sub-Article 3.8. Requirements for Construction, Operation and Repair of Cable Communication Systems

5.21.324 Franchisee must follow local rules.

Cable communications systems shall be constructed, operated and repaired in compliance with the City’s Municipal Code, ordinances, regulations and all other applicable laws, including but not limited to zoning and safety codes, construction standards, regulations for providing notice to persons who may be affected by system construction, and directives governing the time, place and manner in which facilities may be installed in the public rights-of-way. Persons engaged in the construction, operation, or repair of cable communications system facilities shall exercise reasonable care in the performance of all their activities, and shall use commonly accepted methods and devices for preventing damage, injury, or nuisance to the public or to property. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.325 Permits required for construction and repair work.

(a) Franchise required to obtain permit. A franchise is required to obtain a permit or land use approval from the City for work to construct or repair a cable communications system. Any permit or approval issued for such work to a person that does not hold a franchise shall vest no rights in the permittee. The City may revoke a permit or approval to a nonfranchisee, and the permittee at its sole cost shall remove all facilities installed under the permit or approval upon the City’s demand. The permittee shall, at its sole cost, restore any affected public property to its previous condition.

(b) Permit required. Construction or repair of a cable communications system shall not commence until all required permits or approval have been obtained from the proper City officials and all required fees have been paid. All work performed will be performed in strict accordance with the conditions of the permit or approval. Upon the City’s request, any construction or repair work that is not completed in compliance with the City’s requirements, permit or approval or is performed without obtaining the necessary permits and approvals shall be removed at permittee’s sole cost. The permittee shall, at its sole cost, restore any affected public property to its previous condition. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.326 Use of existing poles and conduit.

To the extent possible, franchisees shall use existing poles and conduit. A franchisee shall not install additional poles in the public rights-of-way or public property, and further shall not increase pole capacity by vertical or horizontal extenders, without the prior written approval of the City Manager. As a condition of allowing a franchisee to erect new poles or construct underground conduit, the City Manager may require the franchisee to provide for pole space or empty conduits in excess of its own present and reasonable foreseeable requirements to accommodate the City and/or other franchisees and licensees. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.327 Above ground facility requirements.

Prior to construction, renovation or repair of any above ground facilities, the franchisee shall obtain the approval of the City’s Director of Planning and Development Services to ensure that the facilities satisfy the City’s rules and regulations for the placement, aesthetics, and surrounding landscapes, and further obtain any required permits and other approvals. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.328 Undergrounding requirements.

(a) Undergrounding of facilities.

(1) In those areas and portions of the City where existing utilities are placed or will be placed underground, whether by other franchisees, or builders, developers or subdividers as part of a development or subdivision, a franchisee shall likewise construct, operate and maintain all of its cable communication system facilities.

(2) Whenever the owner of a pole locates or relocates underground within an area of the City, every franchisee operating in that area shall concurrently relocate its cable communications system facilities underground.

(3) In new developments or subdivisions, a franchisee providing cable or open video services therein shall be responsible for performing all necessary trenching and backfilling of main line and service trenches, including furnishing of any imported backfill material required to participate in joint trench construction with other utilities. The franchisee shall be responsible for the conduct of the engineering and labor to put the cable conduit in the trench, pulling in the cable, and providing the plant electronics and drops to individual homes, after occupancy.

(4) In those areas and portions of the City designated by the City as local improvement districts and where utility service facilities are currently located underground, a franchisee providing cable or open video services in those areas or portions thereof shall be responsible for the undergrounding of cable facilities, including the performance of all necessary trenching and backfilling of main line and service trenches, and the furnishing of any imported back-fill material required.

(5) With the prior written approval of the City Manager, incidental appurtenances such as amplifier boxes and pedestal-mounted terminal boxes may be placed above ground, but shall be of such size and design and shall be so located as not to be unsightly or hazardous to the public.

(6) The City Manager may, for good cause shown, exempt a franchisee from its obligation to locate or relocate facilities underground where relocation is impractical, or the City and the subscribers’ interest can be protected in another manner. Nothing herein prevents the City from ordering cable communications system facilities to be located or relocated underground under other provisions of the City’s Municipal Code.

(b) Underground services alert. Each franchisee who places facilities underground shall be a member of the regional notification center for subsurface installations (Underground Services Alert) and shall field mark the locations of its underground facilities at no cost to the City. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.329 Prompt repairs.

A franchisee, at its sole cost, shall promptly repair any and all public rights-of-way or other public or private property that is disturbed or damaged during the franchisee’s construction, operation, maintenance or repair of its cable communications system no later than five (5) business days of completion of the construction, operation, maintenance or repair, or as required by the City Engineer. The franchisee must restore public property and public rights-of-way to the satisfaction of the City or to a condition as good as or better than before the disturbance or damage occurred. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.330 Movement of facilities for government and other purposes.

(a) Movement for governmental purposes.

(1) A franchisee shall, at its sole cost and by a time specified by the City, protect, support, temporarily disconnect, relocate, or remove any of its facilities as required by the City because of traffic conditions; public safety; public rights-of-way construction and repair (including regrading, resurfacing, widening, realigning or relocating); public rights-of-way vacation; construction, installation or repair of sewers, drains, water pipes, power lines, signal lines, tracks, or any other type of government-owned system or utility, public work, public facility, or improvement; or for any other purpose where removal or relocation of the cable communications system facilities is necessary or would facilitate the completion of any public work by the City.

(2) Except in an emergency, the City shall provide written notice to a franchisee describing where the public work will be performed at least fifteen (15) calendar days before the date the franchisee is required to protect, support, temporarily disconnect, relocate or remove its facilities. In an emergency or where a cable communications system facility creates or is contributing to an imminent danger to health, safety, or property, the City may protect, support, temporarily disconnect, remove, or relocate any or all parts of the cable communications system facilities without prior notice to the franchisee, and charge the franchisee for any costs incurred.

(b) Movement for others.

(1) To accommodate the construction or repair of the facilities of another franchisee authorized by the City to use or have access to the public rights-of-way or public property, a franchisee shall, at its sole cost and by a time specified by such other franchisee, protect, support, temporarily disconnect, relocate or remove its facilities. The franchisee proposing to perform the construction or repair shall give written notice to the other affected franchisee describing where such construction or repair will be performed at least fifteen (15) calendar days before the date the other franchisee is required to protect, support, temporarily disconnect or remove its facilities. The City may, but is not obligated, to resolve disputes regarding the allocation of costs and responsibilities between franchisees if they are unable to resolve such disputes themselves.

(2) A franchisee shall, on the request of any person holding a valid permit issued by a governmental authority, temporarily raise or lower its wires by a time specified to permit the moving of buildings or other objects. Any such person shall provide the affected franchisee with at least seven (7) days’ advance written notice to arrange for such temporary wire changes. The person requesting the changes shall be responsible and pay for all reasonable expense of such changes. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.331 Trimming of trees.

A franchisee shall not allow any of its employees, contractors or other agents to remove or trim any tree or portion thereof (above, at, or below ground level) that is located on a public right-of-way or public property without the prior written approval of the City’s Director of Public Utilities Works. Such approval may be given or withheld upon such terms and conditions as the Director of Public Utilities Works deems appropriate. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.332 Minimizing interferences: Plans and time schedule of construction work.

(a) Minimize interferences. Construction and repair of cable communications systems must be performed in such a manner as to minimize the interference with the public and City’s use of the public rights-of-way and public property. The City Manager may require a person using the public rights-of-way or public property to cooperate with others through joint trenching and other arrangements to minimize adverse impacts on such property.

(b) Plan and schedule for construction work.

(1) Before commencing any construction work, a franchisee shall provide the City with a plan and a time schedule for any construction, repair, upgrade, or rebuild of the franchisee’s cable communications system, receive a written permit from the City, and furnish to the City performance and payment bonds in accordance with Section 5.21.336. The plan shall show the work to be performed, the process to complete the work, and the area(s) of the City that will be affected by the work. The schedule shall provide for the prompt completion of the project, show a timetable for construction of each phase of the project, with benchmarks for deliverables and the areas of the City that will be affected by the project. The permit issued by the City may fully incorporate, add to or alter the proposed plans and schedule.

(2) The City Manager may, from time to time, when the City receives application for a permit to use or have access to a particular route, or upon the City’s own initiative, designate by published order a route or proposed route for construction work on any cable communications system facilities and may (A) require all persons who wish to place, construct or install underground facilities along that route or any part thereof to install them during a specified period and (B) otherwise prohibit emplacement of such facilities along the route or any part thereof for twenty-four (24) months or after such other, longer period as is necessary to protect the public.

(3) The City, or the franchisee if directed by the City Manager, shall publicize the construction work that franchisee plans to undertake. The publication of work may be used to notify the public and other franchisees of the impending work in order to minimize inconvenience and disruption to the public and the City. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.333 Abandonment of franchise property or facilities.

(a) Notice required. A franchisee may abandon any of its property or facilities located in the public rights-of-way or public property by providing the City with written notice thereof. However, if, within ninety (90) calendar days of the receipt of written notice of abandonment, the City determines that the safety, appearance, functioning or use of the public rights-of-way and facilities therein will be adversely affected, franchisee must remove, at franchisee’s sole expense, the property or facilities by a date specified by the City.

(b) Environmental hazards. A franchisee who abandons its property or facilities must, upon request by the City, transfer ownership of the properties or facilities to the City at no cost to the City, and execute any necessary deeds or other documents, and indemnify the City against future costs (including attorney’s fees) for mitigating or eliminating any environmental hazard associated with the abandoned property or facilities. (§ 4, Ord. 05-23, eff. September 1, 2005)

Sub-Article 3.9. Indemnity, Insurance, Bonds and Security

5.21.334 Indemnity and defense.

(a) Form. Prior to the issuance of a franchise, the franchisee shall provide to the City adequate indemnity and defense in a form acceptable to the City Attorney and the City’s Risk Manager.

(b) Minimum requirements. Without limitation, the indemnity and defense must:

(1) Release the City from and against any and all liability and responsibility in or arising out of the construction, operation or maintenance of the franchise and cable communications system, and further provide that franchisee shall have no right to and shall not sue or seek any money or damages from the City in connection with these matters.

(2) To the extent allowed by law, hold the City harmless and indemnify (pay for any resulting settlement, penalties, fines, judgment or other liabilities), and defend (pay fees and costs of attorney to be selected by the City) City and City’s Council and members thereof, officers, employees, agents and volunteers against any and all claims, judgments, fines, penalties, forfeitures, damages, demands, liabilities, suits, costs and expenses (including all reasonable costs and expenses for investigation and defense thereof, including, but not limited to, attorney fees, court costs and expert fees) of any nature whatsoever, arising or allegedly arising directly or indirectly out of, as a result of, or incident to, or in any way connected with the construction, operation or maintenance of franchisee’s cable communications system, franchisee’s exercise of any right and privilege granted pursuant to the franchise, any breach or default by franchisee in performing any of its obligations, and/or any act or omission by franchisee and/or its board of directors and members thereof, officers, employees, contractors, or other agents, except for claims, judgments, fines, penalties, forfeitures, damages, demands, liabilities, suits, costs and expenses caused solely by the active negligence or by the willful misconduct of the City or its Council and members thereof, officers, employees, or agents acting within the scope of their duties for City.

(3) Provide that the franchisee shall reimburse the City for all costs and attorney’s fees incurred by the City in enforcing the defense and indemnify obligations under this section. A franchisee’s indemnity obligation shall apply to all claims and liability regardless of the existence of any insurance coverage. Further, a franchisee’s indemnity obligation is not limited by the policy limits of any insurance policy.

(4) Provide that franchisee’s indemnity and defense obligations shall survive the term of the franchise for any acts or omissions occurring or arising during the term of the franchise. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.335 Insurance.

(a) General liability insurance. Franchisee shall purchase and maintain such commercial general liability insurance per occurrence for bodily injury, property damage, personal injury and advertising injury which may arise out of or result from franchisee’s operation, maintenance, construction or repair of franchisee’s cable communications system or facilities and for which franchisee may be legally liable, whether such operations, maintenance, construction or repair are by franchisee or its board of directors or members thereof, officers, employees, contractors, consultants or any other persons directly or indirectly employed by any of them, or by any person for whose acts any of them may be liable.

(1) Commercial general liability insurance shall provide at least the following minimum insurance coverage, unless otherwise set forth in the franchise:

(A) Claims for damages because of bodily injury (including emotional distress), sickness, disease, or death of any person other than the franchisee’s employees. This coverage shall be provided in a form at least as broad as Insurance Services Office (ISO) Form CG 0001 11188;

(B) Claims for damages arising from personal or advertising injury in a form at least as broad as ISO Form CG 0001 11188;

(C) Claims for damages because of injury or destruction of tangible property, including loss of use resulting therefrom, arising from operations of the cable communications system;

(D) Claims involving blanket contractual liability applicable to the franchisee’s obligations under the franchise documents, including liability assumed by and the indemnity and defense of obligations of the franchisee and its contractors, consultants and any other persons directly or indirectly employed by them, or by any person whose acts any of them may be liable.

(E) Claims involving completed operations, independent contractors’ coverage, and broad form property damage, without any exclusion for collapse, explosion, demolition, underground coverage, and excavating. Completed operations and products liability shall be maintained for two (2) years after the termination of the franchise (in the case of the cable communications system owner or operator) or completion of the work for the cable communications system owner or operator (in the case of a contractor or subcontractor).

(F) Limits of liability of not less than two million dollars ($2,000,000.00) per occurrence and four million dollars ($4,000,000.00) general aggregate for bodily injury and property damage; one million dollars ($1,000,000.00) for general aggregate for personal and advertising injury; and two million dollars ($2,000,000.00) aggregate for products and completed operations.

(2) Any deductible or self-insured retention must be declared to and approved by the City’s Risk Manager. At the option of the City, either the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the City and its City Council and members thereof, officers, employees, agents and volunteers; or the franchisee shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses.

(3) A franchisee shall require its contractors, consultants and any other persons directly or indirectly employed by them to procure and maintain similar liability insurance and property damage in like amounts.

(4) A franchisee shall name, on any liability insurance, the City and its Council and members thereof, officers, employees, agents and volunteers as additional insureds. Contractors and consultants of the City shall name the franchisee, the City and its Council and members thereof, officers, employees, agents and volunteers as additional insureds. The Additional Insured Endorsement included on all such insurance policies shall state that coverage is afforded the additional insured with respect to claims arising out of operations performed by or on behalf of the insured. If the additional insureds have other insurance that is applicable to the loss, such other insurance shall be excess to any policy of insurance required herein. The amount of the insurer’s liability shall not be reduced by the existence of such other insurance.

(5) The required insurance must be obtained and maintained for the entire period the franchisee has facilities in the public rights-of-way or public property, and for any additional period required by this chapter and any other franchise documents.

(6) If a franchisee does not obtain and maintain the required insurance, the City may order such entities to stop operations and/or construction until the insurance is obtained and approved by the City’s Risk Manager.

(7) Policies shall be issued by an insurance company(ies) either (i) admitted by the California Insurance Commissioner to do business in the State of California and rated not less than “A-VII” in Best’s Insurance Rating Guide; or (ii) approved by the City’s Risk Manager.

(b) Commercial automobile liability. A franchisee shall, during the term of the franchise granted to it, purchase and maintain commercial automobile liability insurance, which shall be at least as broad as Insurance Services Office (ISO) Business Auto Coverage Form CA 00 01 and endorsed for “any auto” with combined single limits of liability of not less than one million dollars ($1,000,000.00) per accident for bodily injury and property damage.

(c) Worker’s compensation. A franchisee shall, during the term of the franchise granted to it, purchase and maintain worker’s compensation insurance as required under the California Labor Code; and in the case any work is sublet, each franchisee shall require the subcontractor similarly to provide workers’ compensation insurance for all the latter’s employees unless such employees are covered by the protection afforded by the franchisee. This insurance policy shall contain a waiver of subrogation as to the City and its Council and members thereof, officers, officials, agents, employees and volunteers.

(d) Employer’s liability. A franchisee shall maintain employer’s liability insurance with minimum limits of two million dollars ($2,000,000.00) per accident, one million dollars ($1,000,000.00) disease policy limit and one million dollars ($1,000,000.00) disease for each employee of franchisee and its contractors and subcontractors.

(e) Additional insurance coverage and requirements.

(1) A franchisee shall provide all other insurance required to be maintained under the City’s Municipal Codes, ordinances, rules and regulations, and other applicable laws. The City reserves the right to require any other insurance coverage it deems necessary depending upon potential exposures.

(2) The above described policies of insurance shall be endorsed to provide a thirty (30) day written notice to the City regarding policy cancellation, change or reduction of coverage, except for the workers’ compensation policy which shall provide to the City a ten (10) day written notice of such cancellation, change or reduction of coverage.

(3) Each policy of insurance shall be endorsed so franchisee’s insurance shall be primary and no contribution shall be required of the City.

(f) Proof of insurance.

A franchisee shall not commence operation, construction or repair of any cable communications system or allow any of its contractors, consultants or any other persons employed by them directly or indirectly to commence any work thereon until all required insurance, certificates, and Additional Insured Endorsements and a Declarations Page have been obtained and filed with the City’s Risk Manager for approval by the City subject to the following requirements:

(1) For persons issued franchises after the effective date of this chapter, certificates and other required proofs shall be filed within thirty (30) calendar days of the granting of the franchise, and thereafter once a year or whenever there is any change in coverage or as requested by the City from time to time. For franchisees with a franchise existing as of the effective date of this chapter, certificates and other required proofs shall be filed within sixty (60) calendar days of the effective date of this chapter, and thereafter once a year or whenever there is any change in coverage or as requested by the City from time to time.

(2) The certificates of insurance or other required proofs shall:

(A) Include the following clause: “This policy shall not be nonrenewed, canceled, or reduced in required limits of liability or amounts of insurance until notice has been mailed to the City. Date of cancellation or reduction may not be less than thirty (30) days after the date of mailing notice.”

(B) State in particular those insured, the extent of insurance, location and operation to which the insurance applies, the expiration date, and cancellation and reduction notices.

(C) State that the City and its Council and members thereof, officers, employees, agents and volunteers are named as additional insureds under the policy described and that such insurance policy shall be primary to any insurance or self-insurance maintained by the City and any other insurance carried by the City with respect to the matters covered by such policy shall be excess and noncontributing.

(3) In the event that the insurance certificates and other required proofs provided indicate that the insurance shall terminate or lapse during the term of the franchise, then in that event, the franchisee shall furnish, at least thirty (30) calendar days prior to the expiration of the date of such insurance, a renewal certificate of insurance as proof that equal and like coverage has been or will be obtained before any such lapse or termination of insurance coverage.

(4) Upon issuance by the insurer, broker, or agent of a notice of cancellation, change or reduction in coverage, a franchisee shall file with the City’s Risk Manager a certified copy of the new or renewal policy and certificates for such policy.

(5) A franchisee shall furnish the City with a certified copy of any insurance policy required under this section upon the request of the City’s Risk Manager at any time during the term of the franchisee, and this requirement shall survive termination or expiration of the franchise.

(g) Compliance.

A franchisee’s failure to obtain and maintain the required insurance shall be sufficient cause for the City to terminate the franchise. A franchisee’s compliance with the requirement to carry insurance and furnish certificates, policies, Additional Insured Endorsement and Declarations Page evidencing the same shall not relieve the franchisee from liability assumed under any provision of the franchise documents, including, without limitation, the obligation to defend and indemnify the City and its Council and members thereof, officers, employees, agents and volunteers. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.336 Performance and payment bonds.

(a) Bond requirements. Unless otherwise authorized by the City in writing, each franchisee shall apply for and furnish to the City’s Risk Manager separate payment and performance bonds covering one hundred percent (100%) faithful performance of and payment of all obligations arising under the franchise documents and/or guaranteeing the payment in full of all claims for labor performed and materials supplied for any construction, maintenance or repair work on the franchisee’s cable communications system. The bonds are not in lieu of any additional bonds that may be required through the permitting process, unless the City expressly agrees in writing.

(b) Adjustment in bond. To the extent, if any, that the work to be performed under the franchise is increased, the franchisee shall cause the amount of the bonds to be increased accordingly and shall promptly deliver satisfactory evidence of such increase to the City’s Risk Manager. The bonds shall further provide that no change or alteration of the franchise documents (including, without limitation, an increase in the amount of the work to be performed), extensions of time, or modifications of the time, terms, or conditions of payment to the franchisee will release the surety.

(c) Admitted surety required. All bonds shall be provided by a corporate surety authorized and admitted to transact business in California, and must be in a form acceptable to the City Attorney and the City’s Risk Manager.

(d) Duration of bond. Bonds must be obtained prior to the effective date of any franchise, transfer or franchise renewal and shall be maintained during the term of the franchise, unless the City specifically authorizes in writing otherwise. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.337 Security fund.

(a) Minimum security.

(1) A franchisee shall establish and maintain a cash security fund or provide the City an irrevocable letter of credit benefiting the City in the amount of at least two hundred fifty thousand dollars ($250,000.00) to secure the payment of fees owed, to secure any other performance promised in a franchise, to secure any penalties or liquidated damages, and to pay any taxes, fees or liens owed by franchisee to the City.

(2) The City Manager may from time to time require a franchisee to change the amount of the required security fund/letter of credit to reflect changed risks to the City and to the public, including delinquencies in taxes or other payments to the City.

(3) Should the City draw upon the cash security fund or letter of credit, the franchisee shall, within fourteen (14) calendar days, restore the fund or the letter of credit to the full-required amount. This security fund/letter of credit may be waived or reduced by the City Manager where the City Manager determines that a franchisee’s operations are sufficiently limited that a security fund/letter of credit is not necessary to secure the required performance.

(b) Form of letter of credit. The letter of credit shall be in a form and with an institution acceptable to the City’s Risk Manager and the City Attorney. A franchisee shall provide the cash security fund or letter of credit to the City before the effective date of any franchise, transfer or franchise renewal, unless a franchise specifically provides otherwise. (§ 4, Ord. 05-23, eff. September 1, 2005)

Sub-Article 3.10. Maintenance and Inspection of Franchise Books and Records

5.21.338 Books and records.

(a) Books and records of franchisee. A franchisee shall maintain books and records related in whole or in part to the construction, operation, or repair of the franchisee’s cable communications system, or a group of systems of which the system is a part. The records include, but are not limited to:

(1) Revenue records;

(2) Records related to compliance with any provision of the franchise documents;

(3) Records of all complaints received, their nature and the resolution thereof. The term “complaints” refers to complaints about any aspect of the franchisee’s operations;

(4) Records of outages known to the franchisee, their cause and duration;

(5) Records of service calls for repair and maintenance indicating the date and time service was requested, the date of acknowledgment and date and time service was scheduled (if it was scheduled), and the date and time service was provided, and (if different) the date and time the problem was solved;

(6) Records of installation/reconnection and requests for service extension, indicating date of request, date of acknowledgment, and the date and time service were extended;

(7) Records sufficient to show whether the franchisee has complied with each customer service standard that applies to it; and

(8) Reports, books and records showing that a franchisee has provided appropriate subscriber privacy notices.

(b) Period of maintenance. Books and records must be maintained for a period of five (5) years, except that a franchisee may, after written notice to the City thereof, specify a shorter period for certain categories of voluminous books and records where the information contained therein can be derived from other materials. The phrase “books and records” shall be read expansively to include information in whatever format stored.

(c) Access and inspection by City. A franchisee is responsible for obtaining or maintaining the necessary possession or control of all such books and records, so that it can produce the documents upon request by the City. A franchisee shall produce requested books and records to the City by a time and at a location in the City designated by the City Manager. However, if the requested books and records are too voluminous, or for security reasons cannot be copied and moved, then the franchisee may request that the City inspect at some other location mutually agreed to by the City and the franchisee; provided, that (i) the franchisee must make arrangements for copying documents selected by the City after its review; and (ii) the franchisee must pay all travel and additional copying expenses incurred by the City (above those that would have been incurred had the documents been produced in the City) in inspecting those documents or having those documents inspected by its designee.

(d) Exemption. The City Manager may temporarily exempt any franchisee from the requirements of this section if the City Manager determines that the requirement would be unduly burdensome or unnecessary, and that the City and subscriber interests may be adequately protected in some other manner. Such exemption must be in writing to be effective. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.339 Reports.

(a) Special reports. The City Manager may, from time to time, direct a franchisee to prepare reports and to submit those reports by a date certain, in a format prescribed by the City Manager, in addition to those required by this article.

(b) Quarterly reports. Unless an exemption is granted in writing by the City Manager, within forty-five (45) calendar days of the end of each calendar quarter, a franchisee shall submit a report to the City Manager containing the following information:

(1) The number of service calls (calls requiring a truck roll) received during the prior quarter and the percentage of service calls compared to the subscriber base; and

(2) The total estimated hours of known outages as a percentage of total hours of operation. An outage is a loss of sound or video on any signal, or a significant deterioration of any signal affecting two or more subscribers.

(c) Annual reports. Unless an exemption is granted in writing by the City Manager, no later than ninety (90) calendar days after the end of its fiscal year, a franchisee shall submit the following information:

(1) A fully audited or certified revenue report from the previous calendar year for the cable communications system, and a certified statement setting forth the computation of gross revenues used to calculate the franchise fee for the preceding year and a detailed explanation of the method of computation showing (i) gross revenues by category (e.g., basic, pay, pay-per-view, advertising, installation, equipment, late charges, miscellaneous, other); and (ii) what, if any, deductions were made from gross revenues in calculating the franchise fee (e.g., bad debt, credits and refunds), and the amount of each deduction.

(2) A report showing, for each applicable customer service standard, the franchisee’s performance with respect to that standard for each quarter of the preceding year. In each case where franchisee concludes it did not comply fully, the franchisee shall describe the corrective actions it took or is taking to assure future compliance. In addition, the report should identify the number and nature of all the customer service complaints received and an explanation of their dispositions.

(3) An ownership report indicating all persons who, at the time of filing the report, control or own an interest of ten percent (10%) or more in the franchise.

(d) Additional documentation. Within ten (10) calendar days of their receipt or (in the case of documents created by the franchisee or its affiliate) filing, a franchisee shall provide the City:

(1) Notices of deficiency or forfeiture related to the cable communications system; and

(2) Any voluntary or involuntary petition for protection under bankruptcy laws, or any order, judgment or discharge related to a bankruptcy proceeding involving the franchisee or by any person, partnership or corporation that owns or controls the franchisee directly or indirectly.

(e) Court and administrative proceeding papers. The City may require the franchisee to submit to the City copies of all pleadings, applications, notifications, communications and documents of any kind, submitted by the franchisee to, as well as copies of all decisions, correspondence and actions by, any federal, state and local courts, regulatory agencies and other government bodies relating to its cable communications system or facilities, and/or franchise. A franchisee shall submit such documents to the City no later than thirty (30) calendar days after receipt of the City’s request. The franchisee shall have no right to claim confidential, privileged or proprietary rights to such documents unless a court has determined that such documents are confidential, privileged or proprietary, in which case the City shall retain such documents in confidence and shall not make them available for public inspection, unless required by law or a court order. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.340 Maps.

(1) Maintenance. A franchisee shall maintain accurate maps and improvement plans showing the location, size, and a general description of all of its facilities installed in the City, and any power supply sources (including voltages and connections). Maps shall be based upon post-construction inspection to verify location.

(2) Access and inspection by City. A franchisee shall provide a map to the City showing the location of its facilities, in such detail and scale as may be directed by the City and update the map at least annually, and whenever the facility expands or is relocated. Copies of maps shall be provided in hard copy and on disk, in a commercially available electronic format specified by the City Engineer. (§ 4, Ord. 05-23, eff. September 1, 2005)

Sub-Article 3.11. Subscriber Rights and Protection: Nondiscrimination

5.21.341 Subscriber privacy and rights.

(a) Protection of subscriber privacy. Each franchisee shall be responsible for redacting data that applicable law prevents it from providing to the City. Nothing in this section shall be read to require a franchisee to violate state or federal subscriber privacy laws.

(b) Prohibited acts by franchisee. Except as required by federal or state law:

(1) Monitoring and tapping. The monitoring of any subscriber terminal without specific written authorization of the subscriber is prohibited. A franchisee shall be responsible for the protection of subscriber privacy, prohibiting the tapping and/or monitoring of cable, line, signal input device, or subscriber outlet or receiver for any purpose whatsoever, except that a franchisee may conduct tests of the functioning of the cable communications system where necessary in order to ensure proper maintenance of the system and to collect performance data for agencies regulating the quality of signal. Where critical information requires private communication, electronic signal scrambling techniques must be used.

(2) Sale of subscriber information. Listings of subscribers’ names and addresses may not be sold or otherwise released for any purpose, nor any list which identifies, by name, subscriber viewing habits, to any person, agency, or entity, for any purpose whatsoever, without specific written authorization of the individual subscriber.

(3) Use of two (2) way communication equipment. A franchisee and the City shall maintain constant vigilance with regard to possible abuses of the right or privacy of any subscriber, resulting from any device or signal associated with the cable communications system. A franchisee shall not place in any private residence any equipment capable of two (2) way communications without the written consent of the residents therein, and will not utilize the two (2) way communications capability of the system for subscriber surveillance of any kind without the written consent of the subscriber.

(4) Attachment of equipment to subscriber property. A franchisee shall not attach to any residence or any other property any cable, line, wire, amplifier, converter, or other piece of equipment owned by the franchisee without first obtaining the written permission of the owner or responsible occupant of the property involved. If such permission is later revoked, whether by the original or a subsequent owner or responsible occupant, the franchisee shall remove all of its equipment and promptly restore the property to as near to its original condition as possible.

(5) Poll. A franchisee shall not conduct or cause to be conducted any poll or other two (2) way response of subscribers, unless the program of which the poll is a part contains an explicit disclosure of the nature, purpose and prospective use of the results of the poll. No commercial or other use of information of subscriber viewing habits or patterns may be made, and no release of such information shall be permitted without prior consent of the Council or pursuant to rules and regulations duly adopted by the City. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.342 Subscriber connections to cable communications system: Use of antennas.

(a) Use of equipment by subscriber.

(1) To the extent consistent with federal law, subscribers shall have the right to attach video recording devices, receivers, and other terminal equipment to a franchisee’s cable system. Subscribers also shall have the right to use their own remote control devices and converters, and other similar equipment.

(2) A franchisee shall not, as a condition of providing service, require a subscriber or potential subscriber to remove any existing antenna, or disconnect an antenna except at the express direction of the subscriber or potential subscriber, or prohibit installation of a new antenna; provided, that such antenna is connected with an appropriate device and complies with applicable law.

(b) Unlawful acts.

(1) It shall be unlawful for any person, firm or corporation to make or use any unauthorized connection, whether physically, electrically, acoustically, inductively or otherwise, with any part of a franchised cable communication system within this City for the purpose of enabling himself or others to receive or use any television signal, radio signal, picture, program or sound, or other information or intelligence, without payment to the owner of said system or its lessee.

(2) It shall be unlawful for any person, without the consent of the property owner, to willfully tamper with, remove or injure any cables, wires or equipment used for distribution of television signals, radio signals, pictures, programs or sound, or information or intelligence. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.343 Discrimination prohibited.

(a) No retaliation or waiver of rights. A franchisee shall not discriminate against persons or the City, or take any retaliatory action against a person or the City, because of the exercise of any right under federal, state, local law, or this chapter, nor may a franchisee require a person or the City to waive such rights as a condition of taking service.

(b) Employment. A franchisee shall not refuse to employ, discharge from employment, or discriminate against any person in compensation or in terms, conditions, or privileges of employment because of race, color, creed, national origin, sex, sexual orientation, age, disability, religion, ethnic background, or marital status. A franchisee shall comply with all federal, state, and local laws and regulations governing equal employment opportunities and hiring practices, as they may be amended from time to time. (§ 4, Ord. 05-23, eff. September 1, 2005)

Article 4. Cable Systems

5.21.400 Applicability of article.

The provisions of this article apply to cable systems. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.401 Application and content thereof generally.

(a) Applicability. This section applies to all applications to obtain an initial cable system franchise; to modify, transfer, extend, or renew formally or informally an existing cable system franchise; or to build or rebuild a cable system.

(b) Application requirement. An application must be filed with the City to obtain an initial cable system franchise; to modify, transfer, extend, or renew formally or informally an existing cable system franchise; or to build or rebuild a cable system.

(c) Content. The City Manager may specify the information that must be provided in connection with an application, and the form in which the information is to be provided. At a minimum, each application to obtain an initial cable system franchise; to modify, transfer, extend, or renew an existing cable system franchise; or to build or rebuild a cable system shall:

(1) Identify the applicant who is applying for the franchise, including the applicant’s addresses and business telephone numbers;

(2) State the names and addresses of persons authorized to act on behalf of the applicant with respect to the application; and

(3) Identify whether the applicant is applying to obtain an initial cable system franchise; to modify, transfer, extend, or renew an existing cable system franchise; or to build or rebuild a cable system.

(d) Filing and copies. To be accepted for filing, an original and six (6) copies of a complete application must be submitted to the City Clerk.

(e) Incomplete applications. An application may be rejected if it is incomplete, or if the response to requests for information is not timely and complete. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.402 Additional requirements for application to obtain, modify, transfer, extend, or formally renew cable system franchise.

(a) Applicability. This section establishes additional requirements for applications to obtain an initial cable system franchise; or to modify, transfer, extend, or formally renew a cable system franchise; or to build or rebuild a cable system. This section does not apply to an informal renewal of a cable system franchise.

(b) Additional requirements generally. In addition to the requirements set forth in this chapter and other applicable laws, all applications to obtain an initial cable system franchise; to modify, transfer, extend, or formally renew a cable system franchise; or to build or rebuild a cable system shall:

(1) Show that the applicant is financially, technically and legally qualified and able to construct, maintain and operate a cable system;

(2) Contain a pro forma showing capital expenditures and expected income and expenses for the first five (5) years the applicant is to hold the cable system franchise; and

(3) Show that the applicant is willing to comply with its franchise obligations, including the provisions of this chapter.

(c) Additional requirements to build or rebuild cable system. In addition to the requirements set forth in this chapter and other applicable laws, any application for an initial cable system franchise or to build or rebuild a cable system must describe in detail the cable system that the applicant proposes to build, show where it will be located, set out the system construction schedule, and show that the applicant will provide adequate channels/capacity, facilities and other support for public, educational and government use (including institutional network use) of the cable system. A detailed description of the physical facilities proposed, which shall include at least the following:

(1) A description of the channel capacity, technical design, performance characteristics, headend, access (and institutional network) facilities and equipment;

(2) The location of proposed facility and facility design, including a description of the miles of plant to be installed, and a description of the size of equipment cabinets, shielding and electronics that will be installed along the plant route, the power sources that will be used and a description of the noise, exhaust and pollutants, if any, that will be generated by the operation of the same; provided, however, that, if some of the descriptive data is not available at the time of application, the City may grant the franchise subject to conditions that the data be filed and approved by the City before construction begins and that the franchise will be deemed to be forfeited if the data is not supplied and approved; provided, further, that the foregoing proviso does not authorize the grant of a franchise where there is not sufficient information to appraise the impact of the applicant’s proposal;

(3) A map of the general route the facility will follow; a designation of the portions of the cable system that will be placed above ground and the portions that will be placed underground, and the construction techniques that the franchisee proposes to use in installing the cable system above ground and underground; a schedule for construction of the facility, describing when and where construction will begin, how it will proceed, benchmarks indicating the schedule competition of portions of the system and when construction will be completed; and the expected effect on public rights-of-way usage, including information on the ability of the public rights-of-way to accommodate the proposed cable system, including, as appropriate given the cable system proposed, an estimate of the availability of space in conduits and an estimate of the cost of any necessary rearrangement of existing facilities;

(4) A description, where appropriate, of how services will be converted from existing facilities to new facilities, and what will be done with existing facilities;

(5) A demonstration of how the applicant will reasonably meet the future cable-related needs and interests of the community, including descriptions of the capacity, facilities and support for public, educational, and governmental use of the cable system (including institutional networks) applicant proposes to provide and why applicant believes that the proposal is adequate to meet the future cable-related needs and interests of the community;

(6) The applicant must demonstrate financial qualifications, including at least the following:

(A) The proposed rate structure, including projected charges for each service tier, installation, converters, and all other proposed equipment or services; and

(B) A statement regarding the applicant’s financial ability to complete the construction to meet the time frame proposed and to operate the cable system proposed certified by the applicant’s chief financial officer;

(7) A demonstration of the applicant’s technical ability to construct and/or operate the proposed cable system;

(8) A demonstration that the applicant is legally qualified, which proof must include a demonstration that the applicant:

(A) Has received, or is in a position to receive, necessary authorizations from state and federal authorities;

(B) Has not engaged in conduct (fraud, racketeering, violation of antitrust laws, consumer protection laws, or similar laws) that allows the City to conclude the applicant cannot be relied upon to comply with requirements of a franchise or provisions of this title;

(C) Is willing to enter into a franchise, to pay required compensation and to abide by the provisions of applicable law, including those relating to the construction, operation or repair of its facilities; and has not entered into any agreement that would prevent it from doing so; and

(D) Has not submitted an application for an initial or renewal franchise to the City, which was denied on the ground that the applicant failed to propose a cable system meeting the cable-related needs and interests of the community, or as to which any challenges to such franchising decision were finally resolved (including any appeals) adversely to the applicant, within three (3) years preceding the submission of the application;

(9) A demonstration that it would be inappropriate to deny the applicant a franchise by virtue of:

(A) The particular circumstances surrounding the acts or omissions at issue;

(B) The steps taken by the applicant to cure all harms flowing therefrom and to prevent their recurrence; and

(C) The lack of involvement of the applicant’s principals, or the remoteness of the acts or omissions from the operation of cable systems;

(10) The extent that the applicant is in any respect relying on the financial or technical resources of another person, including another affiliate, proofs should be provided for that person;

(11) A description of the applicant’s prior experience in cable system ownership, construction, and operation, and identification of cities and counties in California in which the applicant or any of its principals have a cable franchise or any interest therein; provided, that an applicant that holds a franchise for the City and is seeking renewal of that franchise need only provide this information for other cities and counties in California where its franchise is scheduled to expire during the twelve (12) month period prior to the date its application is submitted to the City and for other cities and counties in California where its franchise had been scheduled to expire during the twelve (12) month period after the date its application is submitted to the City. If an applicant has no other franchise in California, it shall provide the information for its operations in other states;

(12) An affidavit or declaration of the applicant or authorized officer thereof certifying the truth and accuracy of the information in the application, and certifying that the application meets all requirements of applicable law.

(d) Request for information. An applicant (and the transferor and transferee, in the case of a transfer) shall respond to any request for information or documents from the City within the time specified by the City. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.403 Formal renewal of cable system franchise.

(a) Applicability. This section establishes additional provisions that apply to applications for formal renewal of cable system franchises governed by 47 U.S.C. Section 546(a) through (g).

(b) Notice. A franchisee that intends to formally renew a franchise shall submit a notice in writing to the City in a timely manner clearly stating that it is activating the procedures set forth in 47 U.S.C. Section 546(a) through (g).

(c) Proceedings and consideration by City. After receipt of the franchisee’s notice, the City shall commence any proceedings that may be required under federal law, and upon completion of those proceedings, the City may issue a request for proposals and an application may be submitted for renewal. The City may preliminarily deny the application by resolution and, if the application is preliminarily denied, the City may conduct such proceedings and by resolution establish such procedures and appoint such individuals as may be necessary to conduct any proceedings to review the application. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.404 Initial franchise or informal renewal of cable system franchise.

(a) Submission of application.

(1) Any person may apply for an initial franchise by submitting an application to the City Clerk on that person’s own initiative or in response to a request for proposals issued by the City. If the City receives an unsolicited application, it may choose to issue a request for additional proposals, and require the applicant to amend its proposal to respond thereto. The City shall promptly conduct such investigations as are necessary to act on an application.

(2) An application to informally renew a cable system franchise may be submitted by a franchisee to the City Clerk.

(b) Consideration of applications. In determining whether to grant or renew a franchise, the City may consider:

(1) The extent to which an applicant for renewal has substantially complied with the applicable law and the material terms of any existing cable system franchise;

(2) The applicant’s quality of service under its existing franchise, including signal quality, response to customer complaints, billing practices, and the like has been reasonable in light of the needs of the community;

(3) The quality of the applicant’s proposed services and its rates to subscribers, by the applicant;

(4) Where the applicant has not previously held a cable system franchise in the City, whether the applicant’s record in other communities indicates that it can be relied upon to provide high-quality service throughout any franchise term;

(5) Whether the applicant has the experience, financial, legal, and technical ability to provide the services, facilities, and equipment set forth in an application, and to satisfy any minimum requirements established by the City;

(6) Whether the applicant’s application is reasonable to meet the future cable-related needs and interests of the City, taking into account the cost of meeting such needs and interests;

(7) Whether issuance of a franchise is warranted in the public interest considering the immediate and future effect on the public rights-of-way, public property, and private property that will be used by the applicant’s cable system;

(8) Whether issuance of the franchise would reduce competition in the provision of cable service in the City;

(9) Income to the City;

(10) The technical and performance quality of the equipment to be used by the applicant;

(11) The willingness and ability of the applicant to meet construction and physical requirements, policy conditions, franchise limitations, and requirements imposed by this chapter; and

(12) Other considerations deemed pertinent by the Council for safeguarding the interest of the City and the public, or such other matters as the City is authorized or required to consider.

(c) Recommendation of City Manager. The City Manager shall report and recommend to the Council that an application should be accepted, rejected, or that other actions should be taken on the application.

(d) Hearing and consideration by Council.

(1) After receipt of the City Manager’s report and recommendations, the application shall be agendized for a public hearing before the Council.

(2) At the hearing, the applicant shall be provided an opportunity to present information regarding its application, and to respond to questions from the Council and public comments.

(3) At the hearing, the Council may hear protests to or comments from the public regarding the applicant’s application.

(4) After the hearing, the Council shall make one of the following determinations, which determination shall be final and set forth in a resolution:

(A) The application shall be denied;

(B) The application shall be granted as requested;

(D) A determination on the application shall be postponed pending further study or other actions.

(5) If the Council determines to accept such application, the following shall be done or caused to be done:

(A) The Council shall decide and specify the terms and conditions of any franchise to be granted hereunder and as herein provided;

(B) The Council shall pass its resolution of intention to grant such franchise, stating the name of the proposed franchisee, the character of the franchise, the terms and conditions upon which such franchise is proposed to be granted, fixing and setting forth a day, hour, and place certain when and where any persons having any interest therein or objection to the granting thereof may appear before the Council and be heard, and directing the City Clerk to publish said resolution at least once, within fifteen (15) calendar days of the passage thereof;

(C) Within fifteen (15) calendar days after the passage of said resolution, the City Clerk shall cause the same to be published in a newspaper of general circulation within the City, and the same shall be published at least ten (10) calendar days prior to the date specified for hearing thereon. Copies of such resolution shall be mailed to any person requesting same in writing.

(e) Franchise agreement. If the City determines that issuance or informal renewal of a franchise would be in the public interest considering the factors described above, following public hearing and adoption of any required resolution of intention and the public notice and comment period thereunder, it may proffer a franchise agreement to the applicant. No franchise shall become effective until the applicant unconditionally accepts the franchise, and the franchise agreement is signed. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.405 Transfer of cable system franchise.

(a) Applicability of section. This section establishes additional provisions that apply to applications for approval of a transfer of a cable franchise system.

(b) Notice and approval required. Every franchise shall be deemed to be held in trust, and to be personal to the franchisee. Any transfer that is made without the prior approval of the City shall be deemed to impair that trust. No transfer shall occur without prior written notice to and approval of the City.

(c) Additional application requirements. An application for transfer must contain all the information required by the City Manager, by this article and all information required by any FCC transfer form. At a minimum, an application must:

(1) Describe the entities involved in the transaction and the entity that will hold the franchise;

(2) Describe the chain of ownership before and after the proposed transaction;

(3) Show that the entity that will hold the franchise will be legally, financially, and technically qualified to do so;

(4) Attach complete information on the proposed transaction, including the contracts or other documents that relate to the proposed transaction, and all documents, schedules, exhibits, or the like referred to therein; and

(5) Attach any shareholder reports or filings with the Securities and Exchange Commission (“SEC”) that discuss the transaction.

(d) Minimum qualification of transferee.

In order to obtain approval of a transfer, an applicant must show, at a minimum, that: the transferee is qualified; the transfer will not adversely affect the interests of subscribers, the public, or the City; and that noncompliance issues have been resolved. No application shall be granted unless the transferee agrees in writing that it will abide by and accept all terms of this chapter and the franchise, and that it will assume the obligations, liabilities, and responsibility for all acts and omissions, known and unknown, of the previous franchisee for all purposes.

(e) Additional qualification of transferee. To be eligible to be considered as a transferee, the transferee must meet the following additional requirements:

(1) Be willing to comply with the provisions of this chapter and applicable laws; and to comply with such requirements of a franchise as the City may lawfully require;

(2) Has not had any cable system or OVS franchise validly revoked (including any appeals) by the City within three (3) years preceding the submission of the application;

(3) Has not had an application to the City for an initial or renewal cable system franchise denied on the ground that the applicant failed to propose a cable system meeting the cable-related needs and interests of the community, or as to which any challenges to such franchising decision were finally resolved (including any appeals) adversely to the applicant, within three (3) years preceding the submission of the application; and may not have had an application for an initial or renewal franchise denied on any ground within three (3) years of the application;

(4) At any time during the ten (10) years preceding the submission of the application, transferee has not been convicted of fraud, racketeering, anticompetitive actions, unfair trade practices or other conduct of such character that the applicant cannot be relied upon to deal truthfully with City and the subscribers, or to substantially comply with its obligations;

(5) Has obtained the necessary authority under California and federal law to operate a cable system or show that it is in a position to obtain that authority;

(6) Has not filed materially misleading information in its application or intentionally withholds information that the applicant lawfully is required to provide.

(f) Notwithstanding any other provision of this article, pledges in trust or mortgages of the assets of a cable system to secure the construction, operation, or repair of the system may be made without application and without the City’s prior consent. However, no such arrangement may be made if it would in any respect under any condition: (1) prevent the franchisee or any successor from complying with the franchise or applicable law; or (2) permit a third party to succeed to the interest of the franchisee, or to own or control the system, without the prior consent of the City. Any mortgage, pledge or lease shall be subject to and subordinate to the rights of the City under any franchise, this chapter, or other applicable law. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.406 Modification, extension, and other actions pertaining to cable system franchise.

(a) Applicability. This section sets forth the procedures for applications to modify, extend or for other actions with respect to an existing cable system franchise.

(b) Recommendation of City Manager. The City Manager shall report and recommend to the Council that an application should be accepted, rejected, or that other actions should be taken on the application.

(c) Consideration by Council. Upon receipt of the City Manager’s report and recommendations, the Council, at its sole option and discretion, may agendize and hold a public hearing to consider the application, consider the application without a public hearing, or take such other actions as it determines to be appropriate under the circumstances. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.407 Franchise fee.

(a) Amount. For any twelve (12) month period, a franchisee shall pay to the City a franchise fee in an amount equal to five percent (5%) of the franchisee’s gross revenues derived in such period, or such other amount as may be specified in the franchise documents. The amount of franchise fee shall be subject to increase should federal limits on fee payments be eliminated or changed and other cable operators are subject to a higher fee. For purposes of this section, the twelve (12) month period shall be the twelve (12) month period applicable under the franchise for accounting purposes.

(b) Bundling of service. In the event that a franchisee bundles services that are included in the definition of gross revenue with other services not included, the unbundled amount of gross revenue will be based on the published rate for any service provided for in a cable system franchise. Exception can be made with a clear showing by the franchisee that services offered pursuant to a franchise were discounted along with an accounting of the amount of said discount.

(c) Discounts. If a franchisee offers subscribers any kind of discount for receipt of both franchised cable and noncable services (which are not included in the definition of gross revenues), the discount may be applied proportionately to franchised cable services and noncable services upon notification to the City of such discount methodology. Such notification shall include the amount of the discount being applied to each service and documentation demonstrating the promotion and billing of such discount. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.408 Minimum conditions and requirements of cable system franchise.

In addition to satisfying such additional or stricter conditions as the City finds necessary based on its investigations, the following elements shall be required in every franchise unless specifically exempted in writing by the City:

(a) System design. Each franchisee shall provide a cable system, which uses at least seven hundred fifty (750) MHz equipment of high quality and reliability or as required by applicable law, whichever has a higher quality and reliability as determined by the City. Each franchisee shall install and activate the return portion of the cable system in the sub-low frequency spectrum of five (5) MHz to thirty (30) MHz or as required by applicable law, whichever has a higher quality and reliability as determined by the City.

(b) Public, educational and government use of the cable system.

(1) Each franchisee, at the City’s request, shall provide as a minimum the greater of three (3) channels or eighteen (18) MHz of bandwidth for PEG access to each subscriber.

(2) Each franchisee shall install, maintain, and replace, as necessary, a dedicated, bi-directional fiber optic link (or link with equivalent or superior functionality, capacity and reliability) between its headend and a location designated by the City as the primary access center.

(3) Each franchisee shall install, maintain, and replace activated two (2) way cable plant and all headend, cable plant, and node equipment required to make it operable so that the City, schools, and all designated PEG access centers and access facilities located within the franchise area will be able to send and receive signals (video, audio, and data) using the activated two (2) way cable plant.

(4) Each franchisee shall ensure that technically adequate signal quality, routing systems, and switching and/or processing equipment are initially and continuously provided for all access interconnections both within franchisee’s cable system and with other cable systems throughout the duration of its franchise.

(5) If a franchisee makes any change in the cable system and related equipment and facilities or in the franchisee’s signal delivery technology which directly or indirectly substantially affects the signal quality or transmission of access programming, the franchisee shall at its expense take necessary steps or provide necessary technical assistance, including the acquisition of all necessary equipment, to ensure that the capabilities of access programmers are not diminished or adversely affected by such change.

(6) A franchisee shall maintain all access channels (both upstream channels and downstream channels) and all interconnections of access channels at the same level of technical quality and reliability as the best commercial channels carried on the franchisee’s system.

(c) Service to franchise area. It is the policy of the City to ensure that every cable system provides service in its franchise area upon request to any person or any government building. Each franchisee shall extend service upon request within its franchise area; provided, that a franchise may permit a franchisee to require a potential subscriber to contribute a fair share of the capital costs of installation or extension as a condition of extension or installation in cases where such extension or installation may be unduly expensive. Service must be provided within time limits specified in the section immediately below.

(d) Extension of cable service to subscribers. Except as a franchise otherwise provides, service must be extended upon request to any person or to any government building in a franchisee’s franchise area (i) within seven (7) calendar days of the request, where service can be provided by activating or installing a drop; (ii) within ninety (90) calendar days of the request where an extension of one-half (1/2) mile or less is required; or (iii) within six (6) months where an extension of one-half mile or more is required.

(e) Technical standards. A cable system within the City shall meet or exceed the technical standards set forth in 47 U.S.C. Section 544 (e); 47 C.F.R. Section 76.601 and any other applicable technical standards.

(f) Testing. Each franchisee shall perform at its expense such tests as may be necessary to show whether or not the franchisee is in compliance with its obligations under applicable FCC standards, this chapter or a franchise.

(g) Interconnections. Upon request of the City, every cable system shall interconnect with every other cable system in the City, or adjacent to the City, on fair and reasonable terms for purposes of providing PEG and I-Net services. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.409 Rate regulation.

(a) Rate regulation. The City may regulate any franchisee’s rates and charges, except to the extent it is prohibited from doing so by law. The City will regulate rates in accordance with FCC rules and regulations, where applicable. Except to the extent FCC rules provide otherwise, all rates and charges that are subject to regulation, and changes in those rates or charges must be approved in advance. The City Manager may take any required steps to file complaints, toll rates, issue accounting orders, or take any other steps required to comply with FCC regulations. The Council shall be responsible for issuing rate orders that establish rates or order refunds.

(b) Nondiscrimination.

(1) Except to the extent the City may not legally enforce such a requirement, a franchisee is prohibited from discriminating in its rates or charges or from granting undue preferences to any subscriber, potential subscriber, or group of subscribers or potential subscribers; provided, however, that a franchisee may offer temporary, bona fide promotional discounts in order to attract or maintain subscribers, so long as such discounts are offered on a nondiscriminatory basis to similar classes of subscribers throughout the franchise area; and a franchisee may offer discounts for the elderly, the disabled, or the economically disadvantaged; and such other discounts as it is expressly entitled to provide under federal law, if such discounts are applied in a uniform and consistent manner.

(2) A franchisee shall not deny access or charge different rates to any group of subscribers or potential subscribers because of the income of the residents of the local area in which such group resides. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.410 Customer service.

(a) Minimum requirements. Each franchisee must satisfy all applicable FCC, state and the City’s cable customer service standards or consumer protection standards, including 47 C.F.R. Section 76.309. The City may establish, from time to time, by resolution, cable customer service standards that exceed or are additional to federal and state requirements and that are not specifically preempted. In the case of a conflict among standards, the stricter standard shall apply.

(b) Notice to subscribers. As subscribers are connected or reconnected to the cable system, and at least once annually thereafter, the franchisee shall provide each subscriber with written information concerning the procedures for making inquiries or complaints, including the name, address and local telephone number of the employee or employees or agent to whom such inquiries or complaints are to be addressed, and also furnish information concerning the City office responsible for administration of the franchise with the name and telephone number of the office. The notice shall also indicate franchisee’s business hours and procedures for responding to inquiries after normal business hours. The franchisee shall provide all subscribers and the City written notice no less than thirty (30) calendar days prior to any proposed change in these policies. Under normal circumstances, the franchisee shall provide all subscribers and the City with at least thirty (30) calendar days written notice prior to the implementation of any change in rates or programming services. Copies of all notices provided to subscribers shall be filed concurrently with the City. (§ 4, Ord. 05-23, eff. September 1, 2005)

Article 5. Open Video Systems

5.21.500 Applicability of article.

The provisions of this article apply to open video systems. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.501 Additional requirements for application for OVS franchise.

(a) Application requirements. In addition to the other requirements, an application for an OVS franchise must contain the following information:

(1) Identity of the applicant; the persons who exercise working control over the applicant; and the persons who control those persons, to the ultimate parent.

(2) Evidence satisfactory to the City that the applicant is legally qualified, which proof must include a demonstration that the applicant:

(A) Has received, or is in a position to receive, necessary authorizations from state and federal authorities;

(C) Is willing to enter into a franchise, to pay required compensation and to abide by the provisions of applicable law, including those relating to the construction, operation or maintenance of its facilities, and has not entered into any agreement that would prevent it from doing so.

(3) An affidavit or declaration of the applicant or authorized officer thereof certifying the truth and accuracy of the information in the application, and certifying that the application meets all requirements of applicable law.

(4) To the extent that the applicant is in any respect relying on the financial or technical resources of another person, including another affiliate, the proofs should be provided for that person. An applicant will be presumed to have the requisite financial, or technical or legal qualifications to the extent such qualifications have been reviewed and approved by a state agency of competent jurisdiction; or if applicant is a holder of a franchise in the City for a cable system or open video system, and conduct under such other franchise provides no basis for additional investigation.

(5) An applicant shall respond to requests for information completely, and within the time directed by the City, and must strictly comply with procedures, instructions, and requirements the City may establish.

(6) An application may be rejected if it is incomplete or the applicant fails to follow procedures or respond fully to information requests.

(b) Minimum conditions for grant of OVS franchise.

(1) The applicant shall not be issued a franchise if it files materially misleading information in its application or intentionally withholds information that the applicant lawfully is required to provide.

(2) The applicant shall not be issued a franchise if, at any time during the ten (10) years preceding the submission of the application, applicant was convicted of fraud, racketeering, anticompetitive actions, unfair trade practices or other conduct of such character that the applicant cannot be relied upon to deal truthfully with the City and the subscribers, or to substantially comply with its obligations.

(3) No OVS operator shall be issued a franchise, or may commence construction of an OVS system, until (A) it agrees to match in all respects the highest PEG obligations borne by any cable operator in the City; or (B) it agrees to PEG obligations acceptable to the City.

(4) Each franchisee may not require a subscriber or a building owner or manager to enter into an exclusive contract as a condition of providing or continuing service, nor may a franchisee enter into any arrangement that would effectively prevent other persons from using the OVS to compete in the delivery of cable services with a franchisee or its affiliates.

(5) Each franchisee that constructs an I-Net must match in all respects the highest I-Net obligations borne by any cable operator in the City, unless it agrees to alternative I-Net obligations acceptable to the City.

(6) Each franchisee shall specify the construction schedule that will apply to any required construction, upgrade, or rebuild of the OVS. The schedule shall provide for prompt completion of the project, considering the amount and type of construction required.

(7) Each franchisee shall perform at its expense such tests as may be necessary to show whether or not the franchisee is in compliance with its obligations under this chapter or its franchise.

(8) Each franchisee shall satisfy customer service consumer protection requirements established from time to time under state, local law or resolution and the franchise and applicable to OVS.

(c) Consideration of application. In addition to the other requirements of this article, in evaluating a franchise application, the City may consider the following:

(1) The extent to which the applicant has substantially complied with the applicable law and the material terms of any existing OVS franchise;

(2) Whether the applicant has the financial, technical, and legal qualifications to hold an OVS franchise including:

(A) The applicant must be willing to comply with the provisions of this article and applicable laws, and to comply with such requirements of an OVS agreement as the City may lawfully require;

(B) The applicant must not hold a cable system franchise, or have pending an application for a cable system franchise;

(C) The applicant must not have had any cable system or OVS franchise validly revoked (including any appeals) by the City within three (3) years preceding the submission of the application;

(D) The applicant may not have had an application for an initial or renewal cable system franchise to the City denied on the ground that the applicant failed to propose a cable system meeting the cable-related needs and interests of the community, or as to which any challenges to such franchising decision were finally resolved (including any appeals) adversely to the applicant, within three (3) years preceding the submission of the application;

(3) Whether the application satisfies any minimum requirements established by the City for, or will otherwise provide, adequate public, educational, and governmental use channels/capacity, facilities, or financial support (including with respect to institutional networks);

(4) Whether issuance of a franchise would require replacement of property or involve disruption of property, public services, or use of the public rights-of-way;

(5) Whether the approval of the application may eliminate or reduce competition in the delivery of cable communication service in the City;

(6) Whether the applicant has the necessary authority under California and Federal law to operate an OVS, and is certified by the FCC under Section 653 of the Cable Act.

(d) Applicant showing.

(1) An applicant shall be provided a reasonable opportunity to show that a franchise should issue even if the requirements of this section are not satisfied, by virtue of the circumstances surrounding the matter and the steps taken by the applicant to cure all harms flowing therefrom and prevent their recurrence, the lack of involvement of the applicant’s principals, or the remoteness of the matter from the operation of a cable system.

(2) An applicant may show that it would be inappropriate to deny it a franchise by virtue of:

(A) The particular circumstances surrounding the acts or omissions at issue;

(B) The steps taken by the applicant to cure all harms flowing therefrom and to prevent their recurrence; and

(C) The lack of involvement of the applicant’s principals, or the remoteness of the acts or omissions from the operation of open video system facilities.

(e) For purposes of this section the term “applicant” includes any affiliate of applicant. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.502 Rate regulation.

The City may regulate a franchisee’s rates and charges except as prohibited by law, and may do so by amendment to this article, separate ordinance, by amendment to an OVS franchise agreement, or in any other lawful manner. (§ 4, Ord. 05-23, eff. September 1, 2005)

5.21.503 OVS fee.

(a) In lieu of the franchise fee required by other provisions of this chapter, an OVS franchisee shall pay a fee of five percent (5%) of the gross revenues of the franchisee, its affiliates or any OVS operator of the OVS.

(b) Persons leasing OVS capacity.

(1) A person leasing capacity from an OVS franchisee, other than a person whose revenues are included in the payment made by an OVS franchisee under subsection (a) of this section, shall pay the City a fee in lieu of the required franchise fee of five percent (5%) of the gross revenues of such person. The City may require the OVS franchisee to collect this fee and remit it to the City.

(2) Notwithstanding the foregoing, where a franchisee charges a person, other than an affiliate, to use its OVS (the “use payments”); and that person recovers those use payments through charges to its subscribers that are included in that person’s gross revenues; and that person fully recovers the use payments through the charges to its subscribers and pays a fee on those charges pursuant to this subsection; then franchisee may deduct from its gross revenues the use payments it receives from that person. (§ 4, Ord. 05-23, eff. September 1, 2005)

Article 6. Special Provisions Applicable to State Franchise Holders

5.21.600 Purpose and authority.

Under State law effective January 1, 2007, the California Public Utilities Commission (PUC) has the sole authority to grant State franchises to provide video service. Pursuant to this State law, the City has certain rights and responsibilities with respect to state franchise holders, which include the receipt of a franchise fee and a fee for public, educational and government (PEG) purposes, and the authority to establish and enforce penalties for violations of customer services rules. The City retains authority to regulate the City’s current cable franchise in accordance with this chapter and the cable franchise currently in effect until such time as the cable franchisee no longer holds a City franchise or is no longer operating under a current or expired City franchise. (§ 1, Ord. 07-36, eff. December 13, 2007)

5.21.601 Definitions.

For the purposes of this article, the following words shall have the following meanings:

“Gross revenue” shall have the meaning ascribed that term in Section 5860 of the California Public Utilities Code.

“Holder” shall have the meaning ascribed that term in Section 5830 of the California Public Utilities Code.

“State franchise” shall have the meaning ascribed that term in Section 5830 of the California Public Utilities Code.

“Video service” shall have the meaning ascribed that term in Section 5830 of the California Public Utilities Code. (§ 1, Ord. 07-36, eff. December 13, 2007)

5.21.602 Franchise fee.

For any State franchise holder operating within the boundaries of the City, there shall be a fee paid to the City equal to five percent (5%) of the gross revenue of that State franchise holder. (§ 1, Ord. 07-36, eff. December 13, 2007)

5.21.603 PEG fee.

For any State franchise holder operating within the boundaries of the City, there shall be a fee paid to the City equal to one percent (1%) of the gross revenue of that state franchise holder, which fee shall be used by the City for PEG purposes consistent with State and Federal law. (§ 1, Ord. 07-36, eff. December 13, 2007)

5.21.604 Audit authority.

Not more than once annually, the City Manager or his or her designee may examine and perform an audit of the business records of a State franchise holder to ensure compliance with Sections 5.21.602 and 5.21.603. (§ 1, Ord. 07-36, eff. December 13, 2007)

5.21.605 Customer service penalties under State franchises.

(a) Applicable Law. Any State franchise holder shall comply with all applicable State and Federal customer service and protection standards pertaining to the provision of video service.

(b) Penalties for Violation. The City Manager or his or her designee shall monitor the compliance of State franchise holders with respect to State and Federal customer service and protection standards. The City Manager shall provide the State franchise holder written notice of any material breaches of applicable customer service standards, and will allow the State franchise holder thirty (30) days from the receipt of the notice to remedy the specified material breach. Material breaches not remedied within the thirty (30) day time period will be subject to the following penalties to be imposed by the City:

(1) For the first occurrence of a violation, a fine of five hundred dollars ($500.00) shall be imposed for each day the violation remains in effect, not to exceed one thousand five hundred dollars ($1,500.00) for each violation.

(2) For each violation of the same nature within twelve (12) months, a fine of one thousand dollars ($1,000.00) shall be imposed for each day the violation remains in effect, not to exceed three thousand dollars ($3,000.00) for each violation.

(3) For a third or further violation of the same nature within twelve (12) months, a fine of two thousand five hundred dollars ($2,500.00) shall be imposed for each day the violation remains in effect, not to exceed seven thousand five hundred dollars ($7,500.00) for each violation.

(c) Appeal Procedure. A State franchise holder may appeal a penalty assessed by the City Manager to the City Council within thirty (30) days of the assessment. The City Council shall hear all evidence and relevant testimony and may uphold, modify, or vacate the penalty. The City Council’s decision regarding the imposition of a penalty pursuant to this section shall be final. In the absence of an appeal, the imposition of the penalty shall be deemed final thirty (30) days after the assessment. (§ 1, Ord. 07-36, eff. December 13, 2007)

5.21.606 City response to State franchise applications.

(a) Applicants for State franchises within the boundaries of the City must concurrently provide copies to the City of any application or amendments to applications filed with the PUC. One complete copy must be provided to the City Manager.

(b) Within thirty (30) days of receipt, the City Manager will provide any appropriate comments to the PUC regarding an application or an amendment to an application for a State franchise. (§ 1, Ord. 07-36, eff. December 13, 2007)

5.21.607 PEG channel capacity and interconnectivity.

State franchisees shall provide the PEG channels required by California Public Utilities Code Section 5870 and satisfy the interconnectivity provisions of that section. (§ 1, Ord. 07-36, eff. December 13, 2007)

5.21.608 Extension of existing City franchise.

Any entity providing video service under an expired franchise with the City on January 1, 2007, shall hereby have the terms of its franchise with the City extended on the same terms and conditions until January 2, 2008. Any extension made pursuant to this section does not preclude the City from further modifications, renewals, extensions or termination of that franchise with the City. (§ 1, Ord. 07-36, eff. December 13, 2007)