Chapter 1 Cable Television System

Chapter 1. Cable Television System

Sec. 6-1.01 Short Title.

This Chapter shall be known and may be cited as the City of Hercules, California Cable Communications Code. (Ord. 317 § 1 (part), 1993)

Sec. 6-1.02. Definitions.

For the purposes of this Chapter, the following terms, phrases, words and their derivations shall have the meanings given herein. When not inconsistent with the context, words used in the present tense include the future, words in the plural number include the singular number, and words in the singular number include the plural number. The words “shall” and “will” are mandatory, and “may” is permissive. Words not defined herein shall be given the meaning set forth in the Cable Communications Policy Act of 1984, 47 U.S.C. Section 521 et seq., and as hereinafter may be amended, including without limitation the Cable Television Consumer Protection and Competition Act of 1992, Pub. L. No. 102385, 106 Stat. 1460 (“Cable Act”), and, if not defined therein, their common and ordinary meaning.

(a) “Access channel” means any channel on a cable system set aside without charge by the franchisee for public, educational and/or local governmental use.

(b) “Applicant” means any person submitting an application within the meaning of this Chapter.

(c) “Application” means any proposal, submission or request to (1) construct and operate a cable system within the City; (2) transfer a franchise or control of the franchisee; (3) renew a franchise; (4) modify a franchise; or (5) seek any other relief from the City pursuant to this Chapter or a franchise agreement. An application includes an applicant’s initial proposal, submission or request, as well as any and all subsequent amendments or supplements to the proposal and relevant correspondence.

(d) “Cable Act” means the Cable Communications Policy Act of 1984, 47 U.S.C. Section 521 et seq., and as hereinafter may be amended, including without limitation the Cable Television Consumer Protection and Competition Act of 1992, Pub. L. No. 102-385, 106 Stat. 1460.

(e) “Cable system,” “cable television system,” or “system” means a facility, consisting of a set of closed transmission paths and associated signal generation, reception and control equipment that in any way traverses, passes over or under, or is placed upon a public street and that is designed to provide cable service or other video programming service and which is provided to multiple subscribers within the City. Such term does not include (1) a facility that serves only to retransmit the television signals of one (1) or more television broadcast stations; (2) a facility that serves only subscribers in one (1) or more multiple-unit dwellings under common ownership, control, or management, unless such facility uses any street; (3) a facility of a common carrier that is subject, in whole or in part, to the provisions of Title II of the Communications Act of 1934, 47 U.S.C. Section 201 et seq., except that to the full extent permitted by law, such facility will be considered a cable system to the extent it is used in the transmission of video programming, whether on a common carrier or non-common carrier basis, directly to subscribers; or (4) any facilities of any electric utility used solely for operating its electric utility systems.

(f) “Cable service” means the one-way transmission of video or other programming service over a cable system to subscribers together with any subscriber interaction provided in connection with such service.

(g) “City Manager” means the City Manager or the City Manager’s lawful designee.

(h) “City” means the City of Hercules, California, a municipal corporation of the State of California, in its present incorporated form or in any later reorganized, consolidated, enlarged or reincorporated form.

(i) “Competitive cable system” means a cable system constructed to serve subscribers in an area of the City served by an existing cable system.

(j) “Control of a franchisee, grantee or applicant” means the legal or practical ability to exert control over the affairs of a franchisee, grantee, or applicant, either directly or indirectly, whether by contractual agreement, majority ownership interest, any lesser ownership interest, or in any other manner.

(k) “Council” means the present governing body of the City or any future entity constituting the legislative body of the City.

(l) “Designated access organization” or “DAO” means any non-profit entity established or designated by the City pursuant to Section 6-1.30(e) of this Chapter for the purpose of developing, managing, administering or using any access channel or access channels.

(m) “Educational institution” means any public or private, primary or secondary school districts or community college district serving Hercules residents.

(n) “FCC” means the Federal Communications Commission.

(o) “Franchise” means the right granted by the City to a franchisee to construct, maintain and operate a cable system in, under, on or over streets, within all or specified areas of the City. The term does not include any license or permit that may be required by this Chapter or other laws, ordinances or regulations of the City for the privilege of transacting and carrying on a business within the City or for disturbing the surface of any street.

(p) “Franchise agreement” means a contract entered into in accordance with the provisions of this Chapter between the City and a franchisee that sets forth the terms and conditions under which the franchise will be exercised.

(q) “Franchisee” means any person granted a franchise pursuant to this Chapter who has entered into a franchise agreement with the City.

(r) “Grantee” means any person granted a franchise pursuant to this Chapter, but who has not yet entered into a franchise agreement with the City.

(s) “Gross revenues” means all cash, credits, property or other consideration of any kind or nature received directly or indirectly by the franchisee, its subsidiaries or any affiliate in which franchisee or a person controlling franchise holds more than a fifty percent (50%) ownership interest, arising from, attributable to, or in any way derived from the sale or exchange of cable services or the operation of a cable system by the franchisee within the City. Gross revenues includes, but is not limited to, fees charged subscribers for basic service; fees charged subscribers for any optional, premium, per-channel or pay-per-view service; fees charged subscribers for any tier of service other than basic service; installation, disconnection, reconnection and change-in-service fees; charges for service calls; leased channel fees; fees, payments or other consideration received from programmers for carriage of programming on the system; revenues from converter and remote rentals or sales; advertising revenues; and revenues from home shopping channels. Gross revenues shall be the basis for computing the franchise fee imposed pursuant to Section 6-1.14 of this Chapter. Gross revenues shall not include any taxes on services furnished by the franchisee (other than the franchisee fee) which are imposed upon any subscriber or user by the State, County, City or other governmental unit and collected by the franchisee on behalf of said governmental unit.

(t) “Law” means all duly enacted and applicable Federal, State, County and City laws, statutes, ordinances, codes, rules, regulations and orders.

(u) “Leased access channel” means a channel designated in accordance with Section 612 of the Cable Act, 47 U.S.C. Section 532, for commercial use by persons unaffiliated with the franchisee.

(v) “Person” means any natural person, corporation, partnership, association, joint venture, organization or legal entity of any kind, and any lawful trustee, successor, assignee, transferee or personal representative thereof.

(w) “Street or streets” means the surface, the air space above the surface and the area below the surface of any public street, road, thoroughfare, court, lane, alley, easement, or any public right-of-way or public place, including public utility easements, or any other property in which the City or the public holds any kind of property interest.

(x) “Subscriber” means any person who is authorized to receive cable service delivered over the cable system.

(y) “System malfunction” means any cable system equipment or facility failure or malfunction that results in the loss of satisfactory service on one (1) or more channels to one (1) or more subscribers. A malfunction is major if it affects eleven (11) or more subscribers.

(z) “Transfer of a franchise” means any transaction in which either (1) an ownership or other interest in a franchisee or its cable system is transferred from one person or group of persons to another person or group of persons so that control of the franchisee is transferred; or (2) any rights and/or obligations held by the franchisee under a franchise agreement are transferred or assigned, either in whole or in part, to another person or group of persons. A transfer is pro forma when it involves no substantial change in the ultimate ownership or control of the franchisee.

(aa) “Two-way capability” means the incorporation into a cable system of all appropriate design and engineering characteristics and features so that two-way transmission, including addressability, over the system can be implemented and activated to Section 621 of the Cable Act, 47 U.S.C. Section 541(a)(2)), or to use publicly or privately owned conduits without a separate agreement with the owners.

(bb) “Video channel or channel” means a portion of the electromagnetic frequency spectrum which is used in a cable system and which is capable of delivering a television channel, including the associated audio signal, as television channel is defined by FCC regulation or otherwise. (Ord. 317 § 1 (part), 1993)

Sec. 6-1.03. Intent and Purposes.

(a) It is the intent of the City and the purpose of this Chapter to promote the public health, safety, and general welfare by providing for the grant of one (1) or more franchises for the construction and operation of a cable system within the City; to provide for the regulation, to the extent provided for by law, of each cable system within the City in the public interest; to provide for the payment of compensation by a franchisee to the City for the use of streets by its cable system; to promote the widespread availability of quality cable service to City residents and businesses, educational institutions, the City, and other public institutions; to encourage the development of cable and other communications technologies and cable systems as a means of communication between and among members of the public, City businesses, educational institutions, the City, and other public institutions; to promote the delivery of cable service at competitive rates; to promote the safe, efficient and aesthetic use of City streets; to enhance and maximize the communicative potential of streets used by cable systems; to provide an effective emergency communications system; and to encourage the provision of a diversity of information sources to City residents, businesses, educational institutions, the community, the City, and other public institutions by cable technology.

(b) Recognizing the continuing development of communications technology and uses, it is the policy of the City to encourage experimentation and innovation in the development of cable system uses, services, programming and techniques that will be of general benefit to the community to the extent all such experiments and innovations are consistent with applicable laws and do not in any way interfere with or diminish the breadth, quality and diversity of cable services received by City residents. (Ord. 317 § 1 (part), 1993)

Sec. 6-1.04. Grant of Authority—Franchise Required.

(a) The City may grant one (1) or more franchises in accordance with this Chapter.

(b) No person may construct or operate a cable system in the City without a franchise granted by the City, and no person may be granted a franchise without having entered into a franchise agreement with the City pursuant to this Chapter. (Ord. 317 § 1 (part), 1993)

Sec. 6-1.05. Franchise Characteristics.

(a) A franchise authorizes use of City streets for installing cables, wires, lines, underground conduit, and other facilities to operate a cable system within a specified area of the City, but does not expressly or implicitly authorize the franchisee to provide service to, or install cables, wires, lines, underground conduit, or any other equipment or facilities upon private property without owner consent (except for use of compatible easements pursuant to Section 621 of the Cable Act, 47 U.S.C. Section 541(a)(2), or to use publicly or privately owned conduits without a separate agreement with the owners.

(b) A franchise is non-exclusive, and will not expressly or implicitly preclude the issuance of other franchises to operate cable systems within the City, or affect the City’s right to authorize use of City streets to other persons as it determines appropriate.

(c) A franchise is not in lieu of, and shall not relieve a franchisee of complying with, any permit or license requirement of general applicability required by City ordinance, regulation or other applicable law.

(d) Once a franchise agreement has been accepted and executed by the City and a franchisee, such franchise agreement shall constitute a contract between the franchisee and the City, and the terms, conditions and provisions of such franchise agreement, together with this Chapter and all other duly enacted and applicable laws, shall define the rights and obligations of the franchisee and the City relating to the franchise.

(e) A franchise agreement shall contain provisions setting forth when a transfer of a franchise will be deemed to have taken place, taking into account the ownership structure of the particular franchisee.

(f) A franchise agreement entered into pursuant to this Chapter shall contain the following condition: “The cable system herein franchised shall be used and operated solely and exclusively for the purpose expressly authorized by the Municipal Code of the City of Hercules and for no other purpose whatsoever.” The inclusion of the foregoing statement in a franchise agreement shall not be deemed to limit the authority of the City to include any other reasonable condition, limitation or restriction which the City may deem necessary to impose in connection with the franchise pursuant to the authority conferred by this Chapter or any other provision of law. (Ord. 317 § 1 (part), 1993)

Sec. 6-1.06 Franchise, Franchisee Subject to Other Laws, Police Power.

(a) A franchisee shall at all times be subject to and shall comply with all generally applicable laws. A franchisee shall at all times be subject to all lawful exercise of the police power of the City.

(b) Except as may be specifically provided in this Chapter or under the terms of a franchise agreement, the failure of the City, upon one (1) or more occasions, to exercise a right or require compliance or performance under this Chapter or a franchise agreement shall not be deemed to constitute a waiver of such right or a waiver of compliance or performance. (Ord. 317 § 1 (part), 1993)

Sec. 6-1.07 Interpretation of Terms.

(a) The provisions of this Chapter shall apply to a franchise agreement as if fully set forth in the franchise agreement, and the express terms of this Chapter will prevail over conflicting or inconsistent provisions in a franchise agreement unless such franchise agreement expresses an explicit intent to waive a requirement of this Chapter.

(b) Except as to matters which are governed solely by Federal law or regulation, a franchise agreement will be governed by and construed in accordance with the laws of the State of California. (Ord. 317 § 1 (part), 1993)

Sec. 6-1.08 Applications for Grant, Renewal, Modification or Transfer of Franchises.

(a) A written application shall be filed with the City for (1) grant of a new franchise; (2) renewal of a franchise under either the formal or informal procedures in accordance with Section 626 of the Cable Act, 47 U.S.C. Section 546; (3) modification of a franchise agreement; (4) a transfer of a franchise; or (5) arty other relief from the City pursuant to this Chapter, the franchise agreement, or other applicable law. An applicant has the burden to demonstrate in its application its compliance with all requirements of this Chapter and with all other applicable laws.

(b) To be acceptable for filing, a signed original of the application shall be submitted to the City Clerk together with eight (8) copies, be accompanied by the required application filing fee as set forth in Section 6-1.08(i) of this Chapter, conform to any applicable request for proposals, and contain all required information. All applications shall include the names and addresses of persons authorized to act on behalf of the applicant with respect to the application.

(d) An application for the grant of a new franchise may be filed pursuant to a request for proposals issued by the City or on an unsolicited basis. The City, upon receipt of an unsolicited application, may issue a request for proposals. If the City elects to issue a request for proposals upon receipt of an unsolicited application, the applicant may submit an amended application in response to the request for proposals, or may inform the City that its unsolicited application should be considered in response to the request for proposals, or may withdraw its unsolicited application. An application which does not conform to the requirements of a request for proposals may be considered nonresponsive and denied on that basis.

(e) An application for the grant of a franchise shall contain, at minimum, the following information:

(1) Name and address of the applicant and identification of the ownership and control of the applicant, including: the names and addresses of the ten (10) largest holders of an ownership interest in the applicant, and all persons with two percent (2%) or more ownership interest, including the names and addresses of parents or subsidiaries holding such ownership interests directly or indirectly; the persons who control the applicant; all officers, directors and/or partners of the applicant; and any other business affiliation and cable system ownership interest of each named person;

(2) An indication of whether the applicant, or any person controlling the applicant, or any affiliate, officer, director, partner or major stockholder of the applicant, has been adjudged bankrupt, had a cable franchise or license revoked, or been found by any court or administrative agency to have violated any security, antitrust, unfair or deceptive trade practices, or consumer protection law, or to have committed a felony, or any crime involving moral turpitude; and, if so, identification of any such person and a full explanation of the circumstances, to be used only to determine the legal, financial, technical and operational fitness of the applicant as a cable system operator;

(3) A demonstration of the applicant’s technical, legal and financial ability to construct and/or operate the proposed cable system, including identification of key personnel;

(4) A statement prepared by a certified public accountant regarding the applicant’s financial ability to complete the construction and operation of the cable system proposed;

(5) A description of the applicant’s prior experience in cable system ownership, construction and operation, and identification of communities in which the applicant or any of its principals, parents, subsidiaries or affiliates have, or have had, a cable franchise or license or any interest therein;

(6) Identification of the area of the City to be served by the proposed cable system, including a description of the service area’s boundaries;

(7) A detailed description of the physical facilities proposed, including channel capacity, technical design, service capabilities, performance characteristics, headend, and access facilities;

(8) A description of the construction of the proposed system, including an estimate of plant mileage and its location; the proposed construction schedule; a description, where appropriate, of how services will be converted from existing facilities to new facilities; and information on the availability of space in conduits including, where appropriate, an estimate of the cost of any necessary rearrangement of existing facilities;

(9) A description of the services to be provided initially, including all broadcast signals and non-broadcast programming services to be carried and any non-programming and non-cable services to be delivered over the cable system, and if services will be offered by tiers, identification of the signals and/or services to be included on each tier;

(10) For informational purposes, the proposed rate structure, including projected charges for each service tier, installation, converters, remotes, and other equipment or services, and the applicant’s ownership interest in any proposed programming services to be delivered over the cable system;

(11) A statement setting forth all agreements and understandings, whether written, oral or implied, existing between the applicant and any other person, with respect to the franchise application, the proposed franchise, or applicant’s proposed cable system or its operation;

(12) A demonstration of how the applicant’s proposal will reasonably meet the future cable-related needs and interests of the community, including a description of how the proposal will meet the needs described in any recent community needs assessment conducted by or for the City;

(13) Pro forma financial projections for the first five (5) years of the franchise term, including a statement of projected income, and a schedule of planned capital additions, with all significant assumptions explained in notes or supporting schedules;

(14) An affidavit or declaration of the applicant or authorized officer certifying the truth and accuracy of the information in the application, acknowledging the enforceability of application commitments, and certifying that the proposal meets all Federal and State requirements;

(15) Any other information as may be reasonably necessary to demonstrate compliance with the requirements of this Chapter and information that the City may request of the applicant that is relevant to the City’s consideration of the application.

(f) An application for the renewal of a franchise shall contain, at a minimum, the information set forth in Sections 61.08(e)(2), (3), (7), (8), (12), (14) and (15) of this Chapter.

(g) An application for modification of a franchise agreement shall include, at minimum, the following information:

(1) The specific modification requested;

(2) The justification for the requested modification, including the impact of the requested modification on subscribers and others, and the financial impact on the applicant if the modification is approved or disapproved;

(3) A statement whether the modification is sought pursuant to Section 625 of the Cable Act, 47 U.S.C. Section 545, and, if so, a demonstration that the requested modification meets the standards set forth in 47 U.S.C. Section 545; and

(4) Any other information necessary for the City to make an informed determination on the application for modification.

(h) An application for renewal of a franchise shall comply with the requirements of Section 6-1.23 of this Chapter.

(i) An application for approval of a transfer of a franchise shall comply with the requirements of Section 6-1.24 of this Chapter.

(j) To be acceptable for filing, an application shall be accompanied by a filing fee in the following amount, as appropriate:

(1) For a new or initial franchise, $1,000

(2) For renewal of a franchise, $3,000

(3) For a transfer of a franchise other than a pro forma transfer, $2,000

(4) For a pro forma transfer of franchise, $500

(5) For modification of a franchise agreement initiated by a franchisee pursuant to 47 U.S.C. Section 545, $2,000

The purpose of the filing fee is to defray a portion of the City’s cost in processing an application. The filing fee is therefore intended to be a charge incidental to the awarding or enforcing of a franchise within the meaning of Section 622(g)(2)(D) of the Cable Act, 47 U.S.C. Section 542(g)(2)(D), and may not be deducted from the franchise fee imposed pursuant to Section 6-1.14 of this Chapter. (Ord. 317 § 1 (part), 1993)

Sec. 6-1.09 Grant of Franchises.

(a) The City may grant a franchise for a period not to exceed fifteen (15) years to serve all or a specified area of the City.

(b) The City may make the grant of a franchise conditioned upon the completion of cable system construction, upgrade or rebuild within a prescribed reasonable time or upon the performance of other specific obligations which are to be reasonable and set forth in the franchise agreement, specifying that failure to comply with the condition will cause the franchise to become null and void without further action by the City.

(c) In evaluating an application for a franchise, the City may consider, among other things, the following factors: the applicant’s technical, financial and legal qualifications to construct and operate the proposed system; the nature of the proposed facilities, equipment, and services; the applicant’s experience in constructing and operating cable systems and in providing cable service, including adequate customer service, in other communities, if any; the ability of City streets to accommodate the proposed system; the potential disruption to users of City streets and any resultant inconvenience to the public; and whether the proposal will meet reasonably anticipated community needs and serve the public interest. Where an applicant proposes a competitive cable system, the City may also consider the economic feasibility of multiple cable operators, the impact of grant of a competitive cable system franchise on the ability of an existing franchisee to comply with the terms of its franchise agreement and this Chapter, whether any adverse consequences to the public interest will result if the application is granted, and any other criteria required by applicable Federal or State law.

(d) The City shall consider franchise applications according to the following procedures:

(1) Within sixty (60) days after receipt of a cable franchise application or, where the City issues a request for proposals, within sixty (60) days after the expiration of the period of time during which proposals may be filed, the City Manager shall prepare an analysis of all applications received, including a discussion of the respective merits of each, and present such analysis and the City Manager’s recommendations to the Council at its next regular meeting following expiration of the sixty (60) day period.

(2) Upon receipt of the City Manager’s analysis and recommendations, the Council shall call a public hearing upon the matter of the application or applications, such public hearing to be held not less than twenty (20) days nor more than forty-five (45) days from the date of Council’s receipt of the City Manager’s analysis and recommendations. The City Clerk shall give notice of such public hearing by mailing a copy of the notice of public hearing to each of the franchise applicants at the address shown in its application and to any existing City cable franchisee, and by posting copies of the notice of public hearing in at least three (3) public places in the City; such mailing and posting shall be done not less than ten (10) days prior to the date of the hearing.

(e) At the public hearing, the applicant(s), any existing City cable franchisee, and all other interested persons shall be heard. Based upon the application(s), the testimony or other evidence presented at the public hearing, the analysis and recommendations of the City Manager or staff, the criteria set forth in Section 61.09(c) of this Chapter, and any other information relevant to the application(s), the City Council shall decide by resolution whether to grant or deny the franchise application(s) and decide the terms and conditions of any franchise(s) granted. Upon the grant of a franchise, the grantee’s application shall become an integral part of the franchise, and the grantee shall be bound by the representations therein made.

(f) If the City grants a franchise application, the City Manager and the grantee shall agree on the terms of a franchise agreement within one hundred twenty (120) calendar days from the date of the Council resolution making the grant. This period may be extended for good cause by the City. If agreement is not reached with the City Manager within one hundred twenty (120) calendar days from the date of the Council resolution making the grant, or if the period is not extended by the City, the franchise grant will be null and void without further action by the City.

(g) Following at least ten (10) days prior notice to the grantee and the public, the City Council may hold a public hearing at which it will receive comment on the proposed franchise agreement.

(h) After complying with the above requirements, the City Council shall approve or disapprove the proposed franchise agreement by resolution, or may direct that it be subject to further negotiation.

(i) Processing Fee.

(1) If provided for in a franchise agreement, the grant of an initial franchise, a renewed franchise, an application to modify a franchise agreement, or an application to transfer a franchise may be subject to a processing fee in an amount not to exceed the City’s actual reasonable out-of-pocket costs, including all reasonable costs and fees incurred by the City for consultants, analysts and counsel, that the City reasonably determines are necessary to consider the application, less the amount of the filing fee set pursuant to Section 6-1.08(j) of this Chapter. Within thirty (30) calendar days from the date of the resolution approving or denying the franchise agreement or modification or transfer thereof by the City Council, the City shall notify the grantee of the amount of any processing fee and its method of calculation. If the processing fee is not paid to the City within sixty (60) calendar days of the date of the City Council resolution approving or denying the franchise agreement or a modification or transfer thereof, any approval granted by such resolution will be null and void without further action by the City, unless such period is extended by the City.

(2) The purpose of the processing fee is to recoup the City’s actual reasonable out-of-pocket costs incurred in processing an application over and above those costs recovered through the filing fee imposed pursuant to Section 6-1.08(i) of this Chapter. The processing fee is therefore intended to be a charge incidental to the awarding or enforcing of a franchise within the meaning of Section 622(g)(2)(D) of the Cable Act, 47 U.S.C. Section 542, and may not be deducted from the franchise fee imposed pursuant to Section 6-1.14 of this Chapter. (Ord. 317 § 1 (part), 1993)

Sec. 6-1.10 Insurance—Surety— Indemnification.

(a) A franchisee shall maintain, and by its acceptance of the franchise specifically agrees that it will maintain, throughout the entire length of the franchise period and at its sole cost and expense, the following liability insurance coverage insuring the City and the franchisee:

(1) Workers compensation and employers liability insurance in conformance with the laws of the State of California (not required if franchisee has no employees);

(2) Franchisee’s vehicles, including owned, non-owned (e.g., owned by franchisee’s employees and used in the course and scope of employment), leased or hired vehicles, shall each be covered with automobile liability insurance in the minimum amount of One Million Dollars ($1,000,000) combined single limit per accident for bodily injury and property damage;

(3) Franchisee shall obtain and maintain comprehensive or commercial general liability insurance coverage in the minimum aggregate annual amount of Two Million Dollars ($2,000,000) combined single limit, including bodily injury, personal injury, and broad form property damage. Such insurance coverage shall include, without limitation:

A. Contractual liability coverage adequate to meet a franchisee’s indemnification obligations under this Chapter, as amended, and a franchisee’s franchise agreement, and

B. A cross-liability clause;

(4) Franchisee shall obtain and maintain slander/libel/defamation/broadcaster’s general liability insurance in the minimum aggregate annual amount of One Million Dollars ($1,000,000);

(5) Franchisee may satisfy the foregoing coverages by any combination of specific liability and excess liability policies.

(b) All insurance policies shall be with sureties qualified to do business in the State of California, shall be with sureties with an A-1 or better rating of insurance by Best’s Key Rating Guide, Property/Casualty Edition; and in a form reasonably approved by the City Attorney. The City may require coverage and amounts in excess of the above minimums where necessary in view of the franchisee’s greater exposure to liability.

(c) All insurance policies shall be available for review by the City, and a franchisee shall keep on file with the City certificates of insurance.

(d) All insurance policies shall name the City, its officers, boards, commissions, commissioners, agents and employees as additional insureds and shall further provide that any cancellation or reduction in coverage shall not be effective unless sixty (60) days prior written notice thereof has been given to the City.

(e) A franchisee shall, at its sole cost and expense, indemnify, save and hold harmless, and defend the City, its officers, boards, commissions, commissioners, agents, and employees, against any and all claims, suits, costs, demands, losses, causes of action, proceedings and judgments for damages or equitable relief arising out of the construction, maintenance or operation of its cable system, or in any way arising out of the franchisee’s enjoyment or exercise of a franchise granted hereunder, regardless of the cause and regardless of whether the act or omission complained of is authorized, allowed or prohibited by this Chapter or a franchise agreement. This provision includes, but is not limited to, claims arising out of copyright infringements or a failure by the franchisee to secure consents from the owners, authorized distributors, or franchisees of programs to be delivered by the cable system.

(f) A franchisee shall, at its sole cost and expense, fully indemnify, defend, and hold harmless the City, its officers, boards, commissions, commissioners, agents, and employees, from and against any and all claims, suits, actions, liability and judgments for damages or otherwise subject to Section 638 of the Cable Act, 47 U.S.C. Section 558, arising out of or alleged to arise out of any claim against the franchisee for invasion of the right of privacy, libel, defamation or slander of any person, firm or corporation, or the violation or infringement of any copyright, trade mark, trade name, service mark or patent, or of any other right of any person, firm or corporation. (Ord. 317 § 1 (part), 1993)

Sec. 6-1.11 Security Fund.

(a) Prior to the franchise becoming effective, the franchisee shall post with the City a security deposit in an amount of not less than Fifty Thousand Dollars ($50,000) to be used as a security fund to ensure the faithful performance of all provisions of this Chapter, the franchise agreement, and other applicable law, and compliance with all orders, permits and directions of the City, and the payment by the franchisee of any claims, liens, fees, or taxes due the City which arise by reason of the construction, operation or maintenance of the system. A franchise agreement may provide for a security fund greater than the minimum specified in this subsection where the City determines, under circumstances existing at the time, that such larger security fund is necessary to protect the public or to provide adequate incentive to the franchisee to comply with this Chapter and the franchise agreement. The franchise agreement shall provide for the procedures to be followed with respect to the security fund.

(b) The rights reserved to the City with respect to the security fund are in addition to all other rights of the City, whether reserved by this Chapter or authorized by other law or the franchise agreement, and no action, proceeding or exercise of a right with respect to such security fund will affect any other right the City may have. (Ord. 317 § 1 (part), 1993)

Sec. 6-1.12 Performance Bond.

(a) A franchise agreement may provide that, prior to any cable system construction, upgrade, or other work in the streets, a franchisee shall establish in the City’s favor a performance bond in an amount specified in the franchise agreement or other authorization as necessary to ensure the franchisee’s faithful performance of the construction, upgrade, or other work, but the amount of such performance bond shall not exceed one hundred twenty-five percent (125%) of the estimated cost of the street work and repair associated with such construction, upgrade or other work. The franchisee shall submit an estimate of such cost to the City for the City’s approval. The amount of the performance bond shall be specified in the franchise agreement.

(b) In the event a franchisee subject to such a performance bond fails to substantially complete the cable system construction, upgrade or other work in the streets in a safe, timely and competent manner in accord with the provisions of the franchise agreement, there shall be recoverable, jointly and severally from the principal and surety of the bond, any damages or loss suffered by the City as a result, including the full amount of any compensation, indemnification, or the cost of completing or repairing the system construction, upgrade or other work in the streets, plus a reasonable allowance for attorneys’ fees, up to the full amount of the bond. The performance bond may also be used to cover the cost of removal or abandonment of any property of the franchisee in the case of abandonment pursuant to Section 6-1.19 hereof.

(c) The franchise agreement may specify that upon completion of the system construction, upgrade or other work in the streets and payment of all construction obligations of the cable system to the satisfaction of the City, the City may eliminate the bond or reduce its amount. However, the City may subsequently require an increase in the bond amount or a new bond for any subsequent construction, upgrade or other work in the streets. In any event, the total amount of the bond shall not exceed the amount specified in subsection (a) of this Section.

(d) The performance bond shall be subject to the approval of the City Attorney, and shall contain the following endorsement:

This bond may not be canceled, or allowed to lapse, until sixty (60) days after receipt by the City, by certified mail, return receipt requested, of a written notice from the issuer of the bond of intent to cancel or not to renew.

(e) The rights reserved by the City with respect to any performance bond established pursuant to this Section are in addition to all other rights and remedies the City may have under this Chapter, the franchise agreement, or at law or equity.

(f) If so provided for in its franchise agreement, a franchisee may provide a bank letter of credit in lieu of the performance bond in a form reasonably approved by the City Manager. (Ord. 317 § 1 (part), 1993)

Sec. 6-1.13 Minimum Facilities and Services.

(a) The following minimum requirements for facilities and services apply to all franchises granted by the City. The City may require in a franchise agreement that a franchisee exceed these minimum requirements where it reasonably determines, under circumstances existing at the time of the application, that the additional requirements are necessary to meet cable-related community needs and interests, taking into account the cost of meeting such needs and interests.

(1) Any cable system that is constructed, upgraded, or reconstructed after the effective date of the ordinance codified in this Chapter, as amended, shall (a) be able to pass frequencies of at least 550 MHz; (b) have a minimum channel capacity of at least seventy-seven (77) video channels; (c) have at least sixty (60) video channels activated; provided, however, that a franchisee shall not be required to provide sixty (60) activated channels unless sufficient programming services of the type generally carried by a cable system are available; and (d) have two-way capability. A franchise agreement may provide for a larger minimum channel capacity requirement.

(2) The City may require that a franchisee provide access channels for public, educational and/or governmental use.

(3) A cable system shall provide leased access channels as required by federal law.

(4) A franchisee may be required to provide basic cable service without charge to all facilities within the City passed by the cable system that are owned or predominantly occupied by the City or an educational institution and devoted to predominantly educational or governmental use. Such cable service shall be provided by means of drops extending to each building selected by the City or the educational institution. Each such drop shall provide all basic services available over the cable system, with the exception of optionally charged premium services. The franchisee shall not be required to extend a drop to a facility of the City or educational institution more than two hundred (200) feet from the cable distribution line, unless the City or the educational institution being served agrees to bear the expense of any additional extension beyond that point. A franchisee may be required in a franchise agreement to extend a drop internally to particular locations within City or educational institution facilities; provided, however, that a franchisee shall be reimbursed for such external extensions at franchisee’s actual costs. Any drop that is internally extended by the City or the educational institution shall be inspected for signal leakage by the franchisee, at no cost to the City or the educational institution, to ensure they meet all FCC requirements relative to signal leakage. The cost of repairing any signal leakage on such internal extensions will be the responsibility of the City or the educational institution.

(5) A franchisee shall design its system to allow the City to interrupt cable service in an emergency to deliver necessary information to subscribers. The City shall hold the franchisee harmless from any damage or misuse of emergency override capabilities by the City or its officers, agents or employees.

(6) A franchisee shall make available to its subscribers at cost equipment capable of decoding closed circuit captioning information for the hearing impaired.

(7) Standard installation shall consist of an underground drop, not exceeding two hundred (200) feet, to a subscriber’s residence or place of commercial or industrial business. Residential or commercial business drops in excess of two hundred (200) feet may be charged according to the franchisee’s rate schedule.

(b) Unless a franchise agreement provides otherwise, a franchisee shall make cable service available to every dwelling and commercial place of business within the franchisee’s service area; provided, however, that a potential subscriber with a non-standard installation shall pay the cost of installation to the extent it exceeds the cost of a standard installation. (Ord. 317 § 1 (part), 1993)

Sec. 6-1.14 Franchise Fee.

(a) A franchisee, as compensation for the privilege granted under a franchise for the use of the City’s streets to construct and operate a cable system, shall pay to the City a franchise fee in an amount up to a maximum of five percent (5%) of the franchisee’s gross revenues derived from the operation of its cable system within the City during the term of its franchise.

(b) A franchisee shall pay the franchise fee due to the City on a quarterly basis. Payment for each quarter shall be made to the City not later than the last day of the following quarter.

(c) Unless a franchise agreement provides otherwise, a franchisee shall file with the City within thirty (30) calendar days of the end of each calendar quarter a financial computation showing the gross revenues received by the franchisee during the preceding quarter and the number of subscribers served.

(d) No acceptance by the City of any franchise fee payment shall 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.

(e) A franchisee shall file within three (3) months following the end of each of its fiscal years a 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. The statement shall be certified by a certified public accountant or the franchisee’s chief financial officer. The franchisee will bear the cost of the preparation of such statements.

(f) The City may, from time to time, upon reasonable notice, but not more than once every six (6) months, inspect and audit any and all books and records of the franchisee relevant to the determination of gross revenues and the computation of franchise fees due, and may recompute any amounts determined to be payable under the franchise. The cost of the audit will be borne by the City, unless the audit shows an underpayment of more than five percent (5%), in which case franchisee shall bear the cost of the audit. The audit shall be performed in the City or within western Contra Costa County, and it shall be the responsibility of the franchisee to have all books and records necessary to satisfactorily perform the audit readily available to the auditors.

(g) In the event that a franchise fee payment is not received by the City on or before the due date set forth in subsection (b) above, or is underpaid, the franchisee will be charged interest from the due date at an interest rate equal to 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 date of the due date of the franchise fee payment. In addition, the franchisee will pay a late charge of twelve percent (12%) of the amount of the unpaid or underpaid franchise fee payment if the amount in question is not paid within thirty (30) days of written demand by the City.

(h) When a franchise terminates for whatever reason, the franchisee shall file with the City within ninety (90) calendar days of the date its operations in the City cease a financial statement, certified by a certified public accountant or the franchisee’s chief financial officer, showing the gross revenues received by the franchisee since the end of the previous fiscal year. Adjustments will be made at that time for franchise fees due to the date that the franchisee’s operations ceased. (Ord. 317 § 1 (part), 1993)

Sec. 6-1.15 Reports and Records.

(a) Within three (3) months of the close of its fiscal year, a franchisee shall provide the City an annual report that includes the following information:

(1) A summary of the previous year’s activities in development of the system, including but not limited to, services initiated or discontinued, number of subscribers (including gains and losses), homes passed, miles of cable distribution plant in service, and a description of the physical nature and technical capability of any cable plant and headend equipment installed during the preceding year. The summary shall also include a description of any construction, including system upgrades, during the year and a comparison of such construction with any projections previously provided to the City and with any construction or system upgrade timetable required under a franchise agreement, as well as rate and charge increases and/or decreases for the previous fiscal year.

(2) A detailed copy of updated maps depicting the location of all cable plant, including headend and amplifiers, and showing areas served and locations of all trunk lines and feeder lines in the City if there were changes in same during that year.

(3) A summary of subscriber or consumer complaints, identifying the number and nature of complaints and their disposition. Where complaints involve recurrent system problems, the nature of each problem and the corrective measures taken shall be identified. More detailed information on complaints shall be submitted upon request of the City.

(4) A copy of records and reports enabling the City to review and monitor franchisee’s compliance with all customer service requirements set forth in Section 6-1.16 of this Chapter.

(5) If the franchisee is a corporation, a list of officers and members of the board of directors; the officers and members of the board of directors of any parent corporation; and if the franchisee or its parent corporation’s stock or ownership interests are publicly traded, a copy of its most recent annual report.

(6) If the franchisee is a partnership, a list of the partners, including any limited partners, and their addresses; and if the general partner is a corporation, a list of officers and members of the board of directors or the corporate general partner, and the officers and directors of any parent corporation; and where the general partner or its parent corporation’s ownership interests are publicly traded, a copy of its most recent annual report.

(7) A list of all partners or known stockholders holding five percent (5%) or more ownership interest in the franchisee and any parent corporation; provided, however, when any such entity has fewer than ten (10) persons holding five percent (5%) or greater ownership interest, the ten (10) largest such holders.

(8) A copy of the franchisee’s rules and regulations applicable to subscribers of the cable system and a description of the franchisee’s subscriber billing procedures and practices.

(9) A report on the number of elderly and handicapped subscribers receiving any rate discounts and the amount of the discounts for specific services and the nature of franchisee’s promotional efforts or advertising to inform the elderly and handicapped of the availability of such discounts.

(10) A full schedule and description of services, service hours and location of the franchisee’s customer service office or offices available to subscribers in the City, and a schedule of all rates, fees and charges for all services provided over the cable system.

(11) A list of the number of cable subscribers in the City receiving each category or tier of service offered by the franchisee.

(b) A franchisee shall maintain a complete set of books and records in the City or western Contra Costa County, available for inspection and audit by the City for purposes of ascertaining compliance with requirements of this Chapter and the franchise agreement. Such inspection and audit shall be upon reasonable notice and during normal business hours.

(c) Upon request by the City, a franchisee shall provide any financial information that is reasonably necessary for the City to carry out its responsibilities under, or to monitor a franchisee’s compliance with, this Chapter or other City law, a franchise agreement, State law or Federal law.

(d) Information of a proprietary nature submitted by and so designated by the franchisee to the City pursuant to this Chapter or a franchise agreement will not be made available for public inspection unless the City Attorney finds that such information must be made public under applicable law. (Ord. 317 § 1 (part), 1993)

Sec. 6-1.16 Customer Service Requirements.

(a) Unless a franchise agreement provides otherwise, a franchisee shall maintain at least one business office in the City. A franchisee’s business office shall be open during normal business hours, including at least 8:00 a.m. to 5:00 p.m., Monday through Friday, and 9:00 a.m.through 1:00 p.m. on Saturday. A franchisee shall also maintain a listed local, toll-free telephone number and employ a sufficient number of telephone lines, personnel and answering equipment or service to enable subscribers and members of the public to contact the franchisee on a full-time basis, twenty-four (24) hours a day, seven (7) days a week. Telephone answering time (including hold and transfer time) shall not exceed thirty (30) seconds or four (4) rings under normal conditions. This standard shall be met ninety percent (90%) of the time. When the business office is closed, an answering machine or service capable of receiving and recording service complaints and inquiries shall be employed. The after-hours answering service shall substantially comply with the same telephone answer time standard set forth in this subsection (a).

(b) A franchisee shall employ and maintain sufficient qualified personnel and equipment to be available:

(1) To receive subscriber complaints or requests for service or repairs on a full-time basis, between at least 8:00 a.m. and 7:00 p.m., Monday through Friday, and 9:00 a.m. and 1:00 p.m. on Saturday. A reliable supplemental evening telephone message service shall be employed after-hours, so that subscribers may register telephonic complaints or requests for service or repairs twenty-four (24) hours a day, seven (7) days a week; and

(2) To initiate service installations, undertake normal repairs, and initiate action with respect to subscriber complaints Monday through Friday, from 8:00 a.m. to 5:00 p.m. and on Saturday from 9:00 a.m. through 5:00 p.m.

(c) Under normal conditions, standard installation work shall be performed within five (5) business days after an order has been placed. Under normal conditions, service or repair work shall be performed within two (2) business days after a subscriber’s request for service. If scheduled installation or service is neither started nor completed as scheduled, the subscriber will be telephoned by an employee of the franchisee the same day and the appointment rescheduled for the following day or next convenient time available to the subscriber. The franchisee shall pre-call the subscriber to confirm the appointment. If the call to the subscriber is not answered, an employee of the franchisee shall make one additional telephone call to the subscriber the next day. If the subscriber is not at home when franchisee’s service technician or installer arrives, the technician or installer shall leave a door hanger setting forth the time and that the subscriber was not at home and providing a telephone number for the subscriber to call to reschedule the appointment.

(d) Service and installation work shall be prioritized as follows:

(1) Major system malfunctions;

(2) Any other system malfunction or subscriber service repair request;

(3) Service change and rescheduling of appointments for existing subscribers;

(4) Installation of service for new subscribers;

(5) Disconnection of service for existing subscribers.

Subscribers who have experienced oneeast due. (1) or more missed installation or service appointments due to the fault of franchisee shall receive installation free of charge. If the installation was to have been provided free of charge or if the appointment was for service or repair, the subscriber shall receive one month of the most widely subscribed to service tier free of charge.

(e) All appointments for service, installation or disconnection shall be specified by date. The franchisee shall offer a choice of morning (8:30 a.m. to 12:30 p.m.), afternoon (12:30 p.m. to 5:00 p.m.) or all-day (8:30 a.m. to 5:00 p.m.) appointment opportunities, Monday through Saturday.

(f) A franchisee shall have available at all times personnel, equipment and procedures capable of locating and correcting system malfunctions. Major system malfunctions shall be corrected as expeditiously as possible, and corrective measures initiated immediately. Under normal conditions, corrective action for all other malfunctions shall be initiated as provided for in the franchise agreement, but not later than the next business day after the subscriber service call is received, or franchisee otherwise learns of the malfunction, whichever occurs first. A service complaint shall be resolved within two (2) working days.

(g) A franchisee shall develop written procedures for the investigation and resolution of all subscriber or City resident complaints, including, but not limited to, those regarding the quality of service and equipment malfunction. Franchisee shall supply the City Manager with a copy of such written procedures, and any changes in those procedures. A subscriber or City resident who has not been satisfied by following the franchisee’s procedures may file a written complaint with the City Manager, who will investigate the matter and, in consultation with the franchisee as appropriate, attempt to resolve the matter. A franchisee’s good faith or lack thereof in attempting to resolve subscriber and resident complaints in a fair and equitable manner will be considered in connection with the franchisee’s renewal application.

(h) A franchisee shall provide each subscriber at the time cable service is installed, at least once per year thereafter, and at the time of any change in instructions, rates, charges or services, written instructions for placing a service call, filing a complaint, or requesting an adjustment. Such instructions shall include franchisee’s local telephone number and mailing address. Together with these instructions, each subscriber shall also be provided with a schedule of the subscriber’s rates and charges, a copy of the service contract, delinquent subscriber disconnect and reconnect procedures, and a description of any other of the franchisee’s policies in connection with its subscribers. Copies of these instructions shall be provided to the City at least once a year and at the time of any change in the instructions, rates, charges or services.

(i) A franchisee shall provide subscribers and the City Manager with at least thirty (30) days advance written notice of any changes in rates, charges, services, or initiations or discontinuations of service over the cable system.

(j) A franchisee may intentionally interrupt service on the cable system only for good cause and for the shortest time possible and, except in emergency situations, only after a minimum of forty-eight (48) hours prior notice to subscribers and the City of the anticipated service interruption; provided, however, planned maintenance which does not require more than two (2) hours interruption of service and which occurs between the hours of 12:00 a.m. and 6:00 a.m. (“after hours maintenance”) shall not require such notice. Notice of after hours maintenance shall be given to the City Manager no less than twenty-four (24) hours prior to the anticipated service interruption.

(k) A franchisee shall maintain a complete record or log of all service complaints and installation requests received, whether written, verbal, or telephonic, and action taken. These records shall be maintained in franchisee’s office in the City or in western Contra Costa County, and shall be available for inspection by the City during normal business hours upon reasonable prior notice. Such records shall be retained for a period of at least two (2) years. If, after two (2) years, franchisee wishes to dispose of such records, franchisee shall, at the City’s request, turn such records over to the City. Such records shall be subject to the provisions of Section 6-1.15(d) of this Chapter.

(l) Except for planned service outages not exceeding four (4) hours in duration where franchisee provides reasonable notification in advance pursuant to Section 6-1.16(j) of this Chapter, a franchisee shall refund or credit affected subscribers’ accounts for service outages or substantial impairment of service as follows:

(1) In the case of any loss of service or service outage affecting twenty-five (25) or more subscribers for forty-eight (48) hours or more within any ninety-six (96) hour period, a franchisee shall, with or without the request of an affected subscriber, provide a credit to the account of each affected subscriber equal to the greater of (a) one-quarter (1/4) of the total monthly amount charged such subscriber for service; or (b) the prorated amount charged for service per day for each day or part thereof the loss of service or service outage occurred.

(2) A franchisee shall keep in its local business office a current outage log in which all outages occurring within the previous three (3) year period shall be logged. The City shall have access to such log upon reasonable notice and at reasonable times.

(m) Billing.

(1) The franchisee’s first billing statement after a new installation or service change shall be prorated as appropriate and shall reflect any security deposit.

(2) The franchisee’s billing statement must show a specific payment due date not earlier than twenty (20) days after the date the statement is mailed. Any balance not received by the due date may be assessed a late fee consistent with consumer protection and usury laws of the State of California. The late fee will appear on the following month’s billing statement.

(3) The franchisee must notify the subscriber that he or she can remit payment in person at the franchisee’s office in the City and inform the subscriber of the address of that office.

(4) Subscribers shall not be charged a late fee or otherwise penalized for any failure by the franchisee, its employees, or contractors, including failure to timely or correctly bill the subscriber, or failure to properly credit the subscriber for a payment timely made.

(5) In the event of a billing dispute, the franchisee shall waive a late fee during the period until a final resolution of the dispute is agreed upon between the franchisee and the City.

(n) Disconnection.

(1) Voluntary Disconnection.

A. A subscriber may terminate service at any time.

B. A subscriber who uses or rents any detachable or portable equipment of the franchisee during the service period is obligated to return such equipment upon discontinuance of service. The franchisee shall provide the subscriber with the opportunity to return the equipment at the time of the disconnection.

C. Any security deposit and/or other funds due the subscriber shall be refunded on disconnected accounts after the converter has been recovered by the franchisee. The refund process shall take a maximum of thirty (30) days from the date disconnection was requested to the date the customer receives the refund.

(2) Involuntary Disconnection. Service may be disconnected when a subscriber’s account is forty-five (45) days past due.

(o) Acts of God, natural disasters, war, and other circumstances beyond a franchisee’s control are excluded from the provisions of this Section, provided that a franchisee pursues all reasonable means to correct and cure any default resulting from such event and provided further that a franchise shall not be excused by mere economic hardship nor by misfeasance, malfeasance or nonfeasance of its directors, officers or employees. (Ord. 317 § 1 (part), 1993)

Sec. 6-1.17 Discrimination Prohibited.

(a) No franchisee may in its rates or charges, or in the availability of the services or facilities of its system, or in any other respect, make or grant any undue preference or advantage to any subscriber, potential subscriber, or group of subscribers or potential subscribers, nor subject any such persons or group of persons to any undue prejudice or any disadvantage; provided, however, a franchisee may offer discounts in order to attract or maintain subscribers provided that such discounts are offered on a non-discriminatory basis. A franchisee shall not deny, delay or otherwise burden service or discriminate against subscribers or users on the basis of age, race, creed, religion, color, sex, handicap, national origin, marital status, sexual preference or political affiliation, except for discounts for the elderly or handicapped that are applied in a uniform and consistent manner.

(b) A franchisee shall not deny cable service to any potential subscriber because of the income of the residents of the area in which the subscriber resides.

(c) A franchisee shall comply with all applicable City, Federal and State laws concerning equal employment opportunity, including without limitation the equal employment opportunity provisions of the Cable Act. Upon request by the City, a franchisee shall provide the City with a copy of all reports filed by the franchisee with the FCC concerning equal employment opportunity. (Ord. 317 § 1 (part), 1993)

Sec. 6-1.18 Use of Streets.

(a) All wires, cable lines, conduits and other properties or facilities of a franchisee shall be installed underground at such locations and in such manner as approved by the City Manager, and a franchisee shall not install any facilities or apparatus in public streets without the prior written approval of the City Manager. Notwithstanding the foregoing, amplifiers and “tap off” devices may be in suitable enclosures or vaults upon the surface of the ground provided the location and design (architectural and structural) of the enclosure or vault has the prior written approval of the Director of Public Works.

(b) A franchisee shall use, with the owner’s permission, existing underground conduits whenever feasible. Copies of agreements for use of conduits or other facilities shall be filed with the City as required by the franchise agreement or upon the City Manager’s request.

(c) All wires, cable lines, conduits and other cable plant and facilities shall be installed and located to cause minimum interference with the rights and convenience of property owners. The City may issue such rules and regulations concerning the installation and maintenance of a cable system installed in, on, or over the public streets, as may be consistent with this Chapter and the franchise agreement or other applicable law or regulations, unless franchisee demonstrates that such rules and regulations place an unreasonable economic burden on the franchisee.

(d) All safety practices required by law shall be used during construction, maintenance and repair of a cable system. A franchisee shall not place facilities, equipment or fixtures where they will interfere with any gas, electric, telephone, water, sewer or other utility facilities, or obstruct or hinder in any manner the various utilities serving the residents of the City.

(e) A franchisee shall at all times maintain and keep all of its cable system plant, equipment, headend buildings, structures and driveways, and other property and facilities in a clean, safe and good state of repair to the satisfaction of the City Manager.

(f) A franchisee shall at all times make and keep on file in the office of the City Manager current, full and complete maps, plans and records to a scale and form approved by the City Manager, showing the exact locations of all cable system plant, equipment and facilities installed or in use in the streets in the City.

(g) A franchisee shall file with the City Manager on or before the last day of January of each year, a current map or set of maps drawn to a scale designated by the City Manager showing all cable system plant, equipment and facilities in the streets during the previous calendar year.

(h) Upon the request of the City Manager, a franchisee shall, at its expense, protect, support, temporarily disconnect, relocate in the same street or remove from the streets any of its plant, equipment, property or facilities which may be required by reason of traffic conditions, public safety, street vacation, freeway or street construction, change or establishment of street grades, the installation of sewers, drains, water mains, power lines, signal lines and tracks or other types of structures, or improvements by governmental agencies or public utilities when acting in a governmental or proprietary capacity, or any other structures or public improvements.

(i) Prior to commencing any work on, over or under City streets, a franchisee shall notify Underground Service Alert of the nature and location of such work, and shall furnish the City Manager with written evidence of such notification.

(j) A franchisee shall obtain any required permits before commencing any work on, over or under the City streets and before causing any disturbance or damage to private property or the streets as a result of its construction or operations. Upon completion of any work, a franchisee shall promptly restore such property to its former condition, at its own expense, in a manner approved by the City Manager.

(k) Upon the failure of a franchisee to complete any work required by law or by the provisions of this Chapter within the time prescribed and to the satisfaction of the City Manager, the City Manager may cause such work to be done, and the franchisee shall pay to the City the cost thereof within thirty (30) days after the receipt of an itemized statement from the City.

(l) In the event a franchisee shall fail to comply with any of the provisions of this Section, the amount of the itemized statement referred to in subsection (k) hereof shall be recovered from the security fund pursuant to Section 6-1.11 of this Chapter or the performance bond pursuant to Section 6-1.12 of this Chapter. (Ord. 317 § 1 (part), 1993)

Sec. 6-1.19 Removal and Abandonment of Property of Franchisee.

(a) In the event the use of any part of a cable system is discontinued for any reason for a continuous period of six (6) months, or in the event such system or property has been installed in any street without complying with the requirements of this Chapter or a franchise agreement, or the franchise has been terminated, canceled or expired, the franchisee, within thirty (30) days after written notice by the City Manager, shall commence removal from the streets of all such property as the City Manager may require.

(b) The City Manager may extend the time for the removal of abandoned facilities for a period not to exceed one hundred eighty (180) days.

(e) In the event of such removal or abandonment, the franchisee shall restore the area as nearly as possible to its original condition.

(d) If the removal of abandoned facilities is not completed in a satisfactory manner, the City Manager may invoke the provisions of Sections 6-1.18(k) and (1) of this Chapter.

(e) In the event that removal of any facility or component is impracticable, the City may authorize the franchisee to abandon such facility or component in place, in which case the facility or component will become the property of the City. (Ord. 317 § 1 (part), 1993)

Sec. 6-1.20 Subscriber Privacy.

(a) A franchisee shall not condition subscriber service on the subscriber’s grant of permission to disclose information which, pursuant to Federal or State law, cannot be disclosed without the subscriber’s explicit consent.

(b) Neither a franchisee nor its agents or employees shall, without the prior and specific written authorization of the subscriber involved, sell or otherwise make available for commercial purposes the names, addresses or telephone numbers of any subscriber or subscribers, or any information which identifies the individual viewing habits of any subscriber or subscribers. (Ord. 317 § 1 (part), 1993)

Sec. 6-1.21 Technical Standards.

(a) Any cable system within the City shall meet or exceed all FCC and other applicable Federal or State technical or signal quality standards, including any such standards or regulations as hereinafter may be amended or adopted.

(b) A cable system shall be capable of delivering all National Television Systems Committee (NTSC) color and monochrome standards signals and designed to provide picture quality of TASO Grade 2 or better and superior reliability. Should the cable system carry any non-NTSC or new NTSC standard signals, it shall be capable of delivering such signals with superior picture quality and reliability, and in a form meeting any and all standards for such signals that may hereinafter be adopted.

(c) All television signals transmitted on a cable system shall include any closed circuit captioning information for the hearing impaired that is included within the signal as received.

(d) Antennas, supporting structures, headend and associated equipment, and outside plant used in the system shall be designed to comply with the recommendations of the Electronics Industry Association on tower structures and outside plant, and with all Federal, State, County, City and/or utility laws, ordinances, rules and regulations.

(e) All construction, installation and maintenance shall comply with the National Electrical Safety Code, the National Electric Code, all laws and accepted industry practices, and as hereinafter may be amended or changed.

(f) A franchisee shall not design, install or operate its facilities in a manner that will interfere with the signals of any broadcast station, the electrical or telephone system located in any building, the cable system of another franchisee, or individual or master antennas used for receiving television or other broadcast signals.

(g)

(1) At franchisee’s expense, on the last regular working day of each calendar quarter, a franchisee shall submit to the City Manager system performance data taken within the previous seven (7) days. Measurements for the data shall be taken in conformity with applicable FCC rules and at test points as follows:

A. End of each system trunk;

B. End of each system trunk branch or feeder line four or more trunk amplifiers deep;

C. The headend; and

D. Any other points required by FCC rules.

(2) Actual test locations shall be (or as closely as possible simulate) actual subscriber locations.

(3) Measurements regarding twenty-four (24) hour visual signal level and channel amplitude characteristics shall be made as required by the FCC or, if not so required, in accord with accepted industry and sound engineering practice.

(4) Other measurement techniques shall be those suggested or required by the FCC.

(h) A franchisee is required to be in substantial compliance with the technical standards herein at all times, substantial compliance being herein defined as ninety-five percent (95%) of the received channels as observed at subscriber locations shall meet all applicable technical standards simultaneously at the time of measurement.

(i) A franchisee shall provide the City with at least ten (10) days’ advance written notice before each of the quarterly performance tests hereof so that a City representative may be present.

(j) A franchisee shall maintain all of its real property, headend facilities and outside plant in a safe and not unsightly condition. (Ord. 317 § 1 (part), 1993)

Sec. 6-1.22 Enforcement Remedies.

(a) In addition to any other remedies available at law or equity, the City has the right to apply any one (1) or combination of the following remedies in the event a franchisee violates this Chapter, its franchise agreement or applicable State or Federal law:

(1) Impose liquidated damages in such amount, whether on a per diem, per incident, or other measure of violation, as provided in the franchise agreement. Payment of liquidated damages by the franchisee will not relieve the franchisee of its obligation to comply with the franchise agreement or the requirements of this Chapter.

(2) Reduce the duration of the franchise on such basis as the City determines is reasonable pursuant to the procedures specified in Section 6-1.25 of this Chapter.

(3) Revoke the franchise pursuant to the procedures specified in Section 6-1.25 of this Chapter.

(b) In determining which remedy or remedies are appropriate, the City shall take into consideration the nature of the violation, the person or persons bearing the impact of the violation, the nature of the remedy required in order to prevent further violations, and such other matters as the City determines are appropriate to the public interest.

(c) In addition to or instead of any other remedy, the City may seek legal or equitable relief from any court of competent jurisdiction.

(d) Failure of the City to enforce any requirements of a franchise agreement or this Chapter shall not constitute a waiver of the City’s right to enforce that violation or subsequent violations of the same type or to seek appropriate enforcement remedies. (Ord. 317 § 1 (part), 1993)

Sec. 6-1.23 Renewal of Franchise.

Renewal shall be conducted in a manner consistent with the Cable Act. The following additional requirements shall apply:

(a) Upon completion of the review and evaluation process set forth in Section 626(a)(1)(2) of the Cable Act, 47 U.S.C. Section 546, should that process be invoked, the City shall notify the franchisee that it may file a renewal application. The notice shall specify the information to be included in the renewal application and the deadline for filing the application, which shall be no earlier than thirty (30) calendar days following the date of the notice.

(1) The application shall comply with the requirements of Section 6-1.08 of this Chapter and provide the specific information requested in the notice, and any other applicable information required in Section 6-1.08(f) of this Chapter. If the franchisee does not submit a renewal application by the date specified in the City’s notice to the franchisee given pursuant to this subsection, the franchisee will be deemed not to be seeking renewal of its franchise, unless good cause is shown by the franchisee for its failure to submit a timely application and franchisee submits an application as promptly as possible thereafter.

(2) Upon receipt of the renewal application, the City shall publish notice of its receipt and make copies available to the public. The City, following at least seventy-two (72) hours’ prior public notice, may hold one or more public hearings on the renewal application.

(b) In the event a public hearing on the renewal application is held, or in the event that the Council considers the renewal application without a public hearing, the Council will either:

(1) Pass a resolution approving renewal of the franchise, subject to the negotiation of a franchise agreement satisfactory to the City and the franchisee; or

(2) Pass a resolution making a preliminary assessment that the franchise should not be renewed.

(c) If a preliminary assessment is made that a franchise should not be renewed, at the request of the franchisee or on its own initiative, the City will commence a proceeding in accordance with Section 626(c) of the Cable Act, 47 U.S.C. Section 546(c), to address the issues set forth in Sections 626(c)(1)(A) through (D) of the Cable Act, 47 U.S.C. Sections 546(c) (1)(A) through (D).

(d) Any request to initiate a renewal process or proposal for renewal not submitted within the time period set forth in Section 626(a) of the Cable Act, 47 U.S.C. Section 546(a), shall be deemed an informal proposal for renewal and shall be governed in accordance with Section 626(h) of the Cable Act, 47 U.S.C. Section 546(h). The City may hold one (1) or more public hearings or implement other procedures under which comments from the public on an informal proposal for renewal may be received. Following such public hearings or other procedures, the Council shall, after public notice and hearing, determine whether the franchise should be renewed and the terms and conditions of any renewal.

(e) If the Council grants a renewal application, the City and the franchisee shall agree on the terms of a franchise agreement, pursuant to the procedures specified in subsections 6-1.09(f) through (i) of this Chapter, before such renewal becomes effective.

(f) If renewal of a franchise is denied, a franchisee shall have one (1) year to sell the system to a qualified buyer, such sale being subject to the issuance of a franchise to the buyer pursuant to the terms of this chapter. During such one-year period, a franchisee shall comply with the terms of its franchise agreement and this Chapter. If the franchisee fails to sell the system within such one-year period, the City may acquire ownership of the cable system or effect a transfer of ownership of the system to another person upon approval of the council. Any such acquisition or transfer shall be at fair market value. For purposes of this subsection, “fair market value” shall be defined as the price in terms of money which the franchisee’s cable system will bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. The fair market value shall be determined for all purposes under this subsection on the basis of the cable system as a going concern, but with the franchise itself valued as if it were three (3) years in duration or for the remainder of the actual term of any franchise still in existence, whichever is less, and with an expectation of renewal to which the franchisee is entitled pursuant to the terms of this Chapter and its franchise agreement at the time of the valuation.

(g) If renewal of a franchise is denied and the franchisee does not sell the system to a qualified buyer within a year and the City does not purchase the cable system or approve or effect a transfer of the cable system to another person, the City may require the former franchisee’s facilities and equipment removed at the former franchisee’s expense pursuant to Section 6-1.19 of this Chapter.

(h) If the Cable Act, or the renewal provisions thereof, are repealed or if for any other reason there is no Federal law concerning cable franchise renewals, then a franchise shall be renewed unless the Council reasonably determines, after affording the franchisee and the public notice and an opportunity to be heard, that:

(1) The franchisee has not substantially complied with the material terms of its existing franchise or with other applicable law;

(2) The quality of the franchisee’s service, including signal quality, response to consumer complaints, billing practices and level of service, but without regard to the mix or quality of cable services or other services provided over the system, has not been reasonable in light of community needs;

(3) The franchisee does not have the financial, legal, or technical ability to provide the services, facilities and equipment to meet the community’s future cable-related needs and interests; or

(4) The franchisee has not made a renewal proposal that is reasonable to meet the future cable-related needs of the community, taking into account the costs of meeting such needs and interests. (Ord. 317 § 1 (part), 1993)

Sec. 6-1.24 Transfers.

(a) A franchise is a privilege held in personal trust by the franchisee. No transfer of a franchise shall occur without prior approval of the City.

(b) An application for a transfer of a franchise shall meet the requirements of Sections 6-1.08(a), (b), (c), (i) and (j) of this Chapter, and provide complete information on the proposed transaction, including details on the legal, financial, technical and other qualifications of the transferee. At a minimum, the information required in Sections 6-1.08(e)(1) through (e)(5) and (e)(14) of this Chapter shall be provided with respect to the proposed transferee. The information required in Sections 6-1.08 (e)(6) through (e)(13) and (e)(15) of this Chapter shall also be provided whenever the proposed transferee expects material changes to occur in those areas.

(c) An application for approval of a pro forma transfer of a franchise shall be considered granted on the thirty-first (31st) calendar day following the filing of such application with the City unless, prior to that date, the City notifies the franchisee to the contrary. An application for approval of a pro forma transfer of a franchise shall clearly identify the application as such.

(d) In making a determination on whether to grant an application for a transfer of a franchise, the Council shall consider the legal, financial, technical and other qualifications of the transferee to operate the system; whether the incumbent cable operator is in compliance with its franchise agreement and this Chapter and, if not, the proposed transferee’s commitment to cure such non-compliance; and whether operation by the transferee would substantially and adversely affect cable services to subscribers, or otherwise be contrary to the public interest. In considering whether operation by the transferee would substantially and adversely affect cable services to subscribers, the City may consider the potential impact of the transfer on subscriber rates, unless the transferee agrees in writing that, during the remaining term of the franchise, it will not charge rates for “basic cable service” or any “cable programming service” (as those terms are defined in the Cable Act) in excess of the average of rates of nonaffiliated systems in the area offering comparable service.

(e) No application for a transfer of a franchise shall be granted unless the transferee agrees in writing that it will abide by and accept all terms of this Chapter and the franchise agreement, and that it will assume the obligations and liabilities of the previous franchisee under this chapter and the franchise agreement.

(f) Approval by the City of a transfer of a franchise does not constitute a waiver or release of any of the rights of the City under this Chapter or the franchise agreement, whether arising before or after the date of the transfer.

(g) The City may impose a reasonable processing fee to cover its actual costs in excess of the filing fee in considering an application for transfer of a franchise. (Ord. 317 § 1 (part), 1993)

Sec. 6-1.25 Revocation or Termination of Franchise.

(a) Any franchise may be revoked, terminated, or its term shortened by the Council in the event that the Council shall have found, after notice and public hearing as provided in subsection (b), that the franchisee has failed to comply with any material provision of this Chapter or has breached any material term or condition of its franchise agreement, and the Council further finds that franchisee has not taken or is not actively and expeditiously pursuing action to correct and cure such non-compliance or breach within a reasonable period after the City has given franchisee written notice of such failure to comply or breach.

(b) Prior to revoking or terminating a franchise or shortening its term pursuant to subsection (a), the Council shall hold a public hearing, upon sixty (60) calendar days notice, at which time the franchisee and the public shall be given an opportunity to be heard. Following the public hearing the Council may determine whether to revoke the franchise or reduce its term based on the evidence presented at the hearing, the analysis and recommendations of the City Manager, other relevant information, and the public interest. If the Council determines to revoke a franchise or shorten its term, it shall issue a written decision setting forth the reasons for its decision. A copy of such decision shall be transmitted to the franchisee, which shall have the right to contest the reasonableness of such decision on the merits in a court of competent jurisdiction.

(c) Any franchise may, at the option of the City following a public hearing before the Council, be revoked 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, bankruptcy assignment for the benefit of creditors, or other action or proceeding, unless within that one hundred twenty (120) day period:

(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 this Chapter and the franchise agreement and has executed an agreement, approved by a court having jurisdiction, assuming and agreeing to be bound by the terms and conditions of this Chapter and the franchise agreement.

(d) In the event of foreclosure or other judicial sale of any of the facilities, equipment or property of a franchisee, the City may revoke the franchise, following a public hearing before the Council, by serving notice upon the franchisee and the successful bidder at the sale, in which event the franchise and all rights and privileges of the franchise will be revoked and will terminate thirty (30) calendar days after serving such notice, unless:

(1) The City has approved the transfer of the franchise to the successful bidder (which approval shall not be unreasonably withheld); and

(2) The successful bidder has covenanted and agreed with the City to assume and be bound by the terms and conditions of the franchise agreement and this Chapter.

(e) If the City revokes a franchise, or if for any other reason a franchisee abandons, terminates or fails to operate or maintain service to its subscribers, the following procedures and rights are effective:

(1) The City may follow the provisions of Section 6-1.19 of this Chapter.

(2) The City, by resolution of the Council, may acquire ownership or effect a transfer of the cable system at an equitable price if the franchise agreement so provides.

(3) If a cable system is abandoned by a franchisee, the City may sell, assign or transfer all or part of the assets of the system.

(f) Where the City has issued a franchise specifically conditioned in the franchise agreement upon the completion of construction or system upgrade or other specific obligation by a specified date, failure of the franchisee to substantially complete such construction or upgrade, or to comply with such other specific obligation as required, may result in the automatic forfeiture of the franchise without further action by the City where the franchise agreement specifically provides for such forfeiture, unless the City, at its discretion and for good cause demonstrated by the franchisee, grants an extension of time. (Ord. 317 § 1 (part), 1993)

Sec. 6-1.26 Arbitration.

(a) No matter or dispute between the City and a franchisee relating to a franchise agreement may be arbitrable unless specifically provided for in the franchise agreement or otherwise agreed upon by the City and the franchisee. Any matter that is arbitrable under the specific provisions of a franchise agreement may be subjected to the arbitration procedures set forth in subsection (b) below.

(b) The arbitration procedure employed shall be consistent with the rules and procedures of the American Arbitration Association. The City and the franchisee will each select a qualified arbitrator. The two (2) persons selected shall select a third qualified arbitrator, and the three (3) arbitrators will constitute a panel whose decision is binding on the City and the franchisee. The fees of the first two (2) arbitrators shall be paid by the party selecting such person, and the third person shall be compensated one-half (1/2) by the City and one-half (1/2) by the franchisee. The general costs of the proceeding shall be shared equally by the City and the franchisee. (Ord. 317 § 1 (part), 1993)

Sec. 6-1.27 Continuity of Service Mandatory.

(a) It is the right of all subscribers to receive all available services from the franchisee as long as their financial and other obligations to the franchisee are satisfied.

(b) In the event of a termination or transfer of a franchise for whatever reason, the franchisee shall ensure that all subscribers receive continuous, uninterrupted service regardless of the circumstances. The franchisee shall cooperate with the City to operate the system for a temporary period following termination or transfer as necessary to maintain continuity of service to all subscribers. The temporary period will not exceed six (6) months without the franchisee’s written consent. During such period the cable system shall be operated under such terms and conditions as the City and the franchisee may agree, or such other terms and conditions that will continue, to the extent possible, the same level of service to subscribers and that will provide reasonable compensation to the cable operator.

(c) In the event a franchisee fails to operate the system for seven (7) consecutive days without prior approval of the City or without just cause, the City may, at its option, operate the system or designate an operator until such time as the franchisee restores service under conditions acceptable to the City or until a permanent operator is selected. If the City is required to fulfill this obligation for the franchisee, the franchisee shall reimburse the City for all costs or damages resulting from the franchisee’s failure to perform. Additionally, in the event a franchisee ceases to operate the system and the City is therefore required to do so, the franchisee will cooperate with the City to allow City employees and/or City agents necessary access to the franchisee’s facilities and premises for purposes of continuing system operation. (Ord. 317 § 1 (part), 1993)

Sec. 6-1.28 Rates.

(a) At such time as Federal and State law permit regulation of a franchisee’s rates or charges, the City reserves all rights to implement and impose such regulation, and may do so by amendment to this Chapter, by separate ordinance, by amendment to a franchise agreement, or in any other lawful manner.

(b) Nothing in this Chapter shall prohibit the City from regulating rates for cable services, installation or equipment to the full extent permitted by law.

(c) Notwithstanding the foregoing, the City and a franchisee may reach mutual agreement concerning rates to the extent permitted by law.

(d) A franchisee may not change rates or charges without giving a minimum thirty (30) calendar days prior written notice to the City and all subscribers. (Ord. 317 § 1 (part), 1993)

Sec. 6-1.29 Disconnection.

(a) If a franchisee charges a subscriber a fee for downgrade or discontinuance of service, such fee shall not exceed the franchisee’s actual out-of-pocket costs incurred for implementing such downgrade or discontinuance of service.

(b) If a subscriber fails to pay a monthly subscriber or other fee or charge, the franchisee may disconnect the subscriber’s service outlet; however, such disconnection shall not be effected until forty-five (45) days after the due date of the monthly subscriber fee or other charge, and after ten (10) days advance written notice of intent to disconnect to the subscriber in question. If the subscriber pays within forty-five (45) days of the due date and after notice of disconnection has been given, the franchisee shall not disconnect. After disconnection, upon payment by the subscriber in full of all proper fees or charges, including the payment of the reconnection charge, if any, the franchisee shall reinstate service. (Ord. 317 § 1 (part), 1993)

Sec. 6-1.30 Access Channels and Facilities.

(a) Applications for an initial or renewed franchise may and, at the City’s request, shall include proposals for the provision of access channels and equipment and facilities relating to such channels sufficient to meet community needs.

(b) In addition to any access facilities and equipment provided by a franchisee pursuant to a franchise agreement, a franchisee shall provide, at the request of the City Manager or a duly appointed designee, and upon City reimbursement of franchisee’s actual cost, use of franchisee’s studio equipment and technical services for production of live and videotaped access programming, subject to availability and scheduling requirements of the franchisee.

(c) The City may, at any time and in its sole discretion, delegate responsibility for developing, managing, administering or utilizing any access channel or access channels to one (1) or more DAOs. Upon a franchisee’s consent, and upon terms and conditions mutually agreed on by the City and a franchisee, whether in a franchise agreement or otherwise, the City may delegate responsibility for developing, managing, administering or utilizing any access channel or access channels to a franchisee. (Ord. 317 § 1 (part), 1993)

Sec. 6-1.31 Administration.

(a) The City Manager, either directly or through a duly appointed designee, shall have the responsibility for overseeing the day-to-day administration of this Chapter and franchise agreements. The City Manager shall be empowered to take all administrative actions on behalf of the City, except for those actions specified in this Chapter that are reserved to the Council. The City Manager may recommend that the Council take certain actions with respect to the franchise. The City Manager shall keep the Council apprised of developments in cable and provide the Council with assistance, advice and recommendations as appropriate.

(b) The Council shall have the sole authority to regulate rates for cable services as provided by law, grant franchises, authorize the entering into of franchise agreements, modify franchise agreements, renew franchises, revoke franchises, and authorize the transfer of a franchise; provided, however, the City Manager may act on applications for a pro forma transfer of a franchise. (Ord. 317 § 1 (part), 1993)

Sec. 6-1.32 Applicability.

(a) This Chapter shall be applicable to all cable franchises issued by the City, whether or not such franchises were issued prior to the effective date of the ordinance codified in this Chapter, as amended, to the full extent permitted by State and Federal law.

(b) Any cable franchisee whose franchise agreement predates the effective date of the ordinance codified in this Chapter, as amended, shall notify the City in writing within ninety (90) calendar days of the adoption of this Chapter, as amended, or any subsequent amendment thereof, of:

(1) Any provision which it believes should not be applicable to it by reason of the preexisting franchise agreement or the continuing applicability of the prior ordinance; and

(2) The reason for each such claim of non-applicability.

(c) Failure to notify the City as provided in subsection (b) of this Section shall constitute a waiver of any right to object. (Ord. 317 § 1 (part), 1993)

Sec. 6-1.33 Reservation of Rights.

(a) The City reserves the right to amend this Chapter or the City Code as it shall find necessary in the lawful exercise of its police powers; provided, however, that any such amendment does not interfere with any contractual rights of a franchisee in a preexisting franchise agreement.

(b) Any additional regulations adopted by the City shall be incorporated into this Chapter and complied with by all franchisees within thirty (30) days of the date of adoption of such additional regulations.

(d) The City shall at all times have the right, upon reasonable advance notice and during normal business hours, to examine a franchisee’s records and inspect a franchisee’s property and facilities to the extent needed to monitor a franchisee’s compliance with and performance under this Chapter and a franchise agreement. (Ord. 317 § 1 (part), 1993)

Sec. 6-1.34 State Video Service Franchises.

(a) General Provisions.

(1) Purpose. This Section is applicable to video service providers who have been awarded a State video franchise under the California Public Utilities Code Section 5800 et seq. (the Digital Infrastructure and Video Competition Act of 2006 [“DIVCA”]), to provide cable or video services in any location(s) within the incorporated boundaries of the City. It is the purpose of this Section to implement within the incorporated boundaries of the City the provisions of DIVCA and the rules of the California Public Utilities Commission promulgated thereunder that are applicable to a “local franchising entity” or a “local entity” as defined in DIVCA.

(2) Rights Reserved.

A. The rights reserved to the City under this Section are in addition to all other rights of the City, whether reserved by this Section or authorized by law, and no action, proceeding or exercise of a right shall affect any other rights which may be held by the City.

B. Except as otherwise provided by DIVCA, a State franchise shall not include, or be a substitute for:

i. Compliance with applicable requirements for the privilege of transacting and carrying on a business within the City, including, but not limited to, compliance with the conditions that the City may establish before facilities may be constructed for, or providing, non-video services;

ii. Any permit or authorization required in connection with operations on or in public rights-of-way or public property, including, but not limited to, encroachment permits, street work permits, pole attachment permits and street cut permits; and

iii. Any permit, agreement or authorization for occupying any other property of the City or any private person to which access is not specifically granted by the State franchise.

C. No permit issued by the City to a State franchise holder is itself a franchise, nor shall any permit create a vested right that would prohibit the City from revoking or amending the permit.

(3) Compliance with City Ordinances. Nothing contained in this Section shall be construed so as to exempt a State franchise holder from compliance with all ordinances, rules or regulations of the City now in effect or which may be hereafter adopted which are consistent with this Section or California Public Utilities Code Section 5800 et seq., or any obligations under any franchise issued by the City insofar as those obligations may be enforced under California Public Utilities Code Section 5800 et seq.

(b) Definitions.

(1) Definitions Generally—Interpretation of Language. For purposes of this Section, the following terms, phrases, words, and their derivations shall have the meaning given in this subsection (b). Unless otherwise expressly stated, words not defined in this subsection (b) shall be given the meaning set forth in Section 6-1.02 of the Hercules Municipal Code as may be amended from time to time, unless the context indicates otherwise. Words not defined in this subsection (b) or Section 6-1.02 shall have the same meaning as established in: (1) DIVCA, and if not defined therein, (2) California Public Utilities Commission rules implementing DIVCA, and if not defined therein, (3) Title VI of Title 47 of the Communications Act of 1934, as amended, 47 USC Section 521 et seq., and if not defined therein, (4) their common and ordinary meaning. When not inconsistent with the context, words used in the present tense include the future, words in the plural number include the singular number, words in the singular number include the plural number, and “including” and “include” are not limiting. The words “shall” and “will” are always mandatory, but the use of those terms grants no private rights to any person with respect to the City. 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.

A. “Director” means the Director of Public Works for the City of Hercules.

B. “Gross revenues” means all revenues actually received by the holder of a State franchise or its affiliates that are derived from the operation of the holder’s network to provide cable service or video service within the incorporated areas of the City.

C. “PEG access” or “PEG” means the availability of a cable or State franchise holder’s system for public, educational, or governmental use by various agencies, institutions, organizations, groups, and individuals, including organizations, groups, or individual members of the general public, educational institutions, and the City and its designated access providers, to acquire, create, and distribute programming not under a State franchise holder’s editorial control.

D. “State franchise holder” means a cable operator or video service provider that has been issued a franchise by the California Public Utilities Commission to provide cable service or video service, as those terms are defined in California Public Utilities Code Section 5830, within any portion of the incorporated limits of the City.

(1) State Franchise Fees. Any State franchise holder operating within the incorporated areas of the City shall pay to the City a State franchise fee equal to five percent (5%) of gross revenues that may be subject to a franchise fee under California Public Utilities Code Section 5860.

(2) Payment of Franchise Fees. The State franchise fee required pursuant to this subsection (c) shall be paid quarterly, in a manner consistent with California Public Utilities Code Section 5860. The State franchise holder shall deliver to the City, by check or other means, which shall be agreed to by the City, a separate payment for the State franchise fee not later than forty-five (45) days after the end of each calendar quarter. Each payment made shall be accompanied by a report, detailing how the payment was calculated, and shall include such additional information on the appropriate form as designated by the City.

(3) Examination of Business Records. The City may examine the business records of the holder of a State franchise in a manner consistent with California Public Utilities Code Section 5860(i).

(4) Late Payments. In the event a State franchise holder fails to make payments required by this subsection (c) on or before the due dates specified herein, the City shall impose a late charge at the rate per year equal to the highest prime lending rate during the period of delinquency, plus one percent (1%).

(d) Customer Service.

(1) Customer Service Standards. A State franchise holder shall comply with Sections 53055, 53055.1, 53055.2 and 53088.2 of the California Government Code; the FCC customer service and notice standards set forth in Sections 76.309, 76.1602, 76.1603, and 76.1619 of Title 47 of the Code of Federal Regulations; Section 637.5 of the California Penal Code; the privacy standards of Section 551 of Title 47 of the United States Code; and, to the extent consistent with DIVCA, all other applicable State and Federal customer service and consumer protection standards pertaining to the provision of video service, include any such standards hereafter adopted. In case of a conflict, the stricter standard shall apply. All customer service and consumer protection standards under this subsection shall be interpreted and applied to accommodate newer or different technologies while meeting or exceeding the goals of the standards.

(2) Penalties for Violations of Standards. The City shall enforce the compliance of State franchise holders with respect to the State and Federal customer service and consumer protection standards set forth in this subsection (d). The City will provide a State franchise holder with a written notice of any alleged material breaches, as defined in California Public Utilities Code Section 5900, of applicable customer service or consumer protection 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 by a State franchise holder within the thirty (30) day time period, irrespective of the number of customers affected, will be subject to the following penalties to be imposed by the City:

A. For the first occurrence of a material breach, a fine of five hundred dollars ($500.00) may be imposed for each day the violation remains in effect, not to exceed one thousand five hundred dollars ($1,500) for each violation.

B. For a second material breach of the same nature within twelve (12) months, a fine of one thousand dollars ($1,000) may be imposed for each day the violation remains in effect, not to exceed three thousand dollars ($3,000) for each violation.

C. For a third material breach of the same nature within twelve (12) months, a fine of two thousand five hundred dollars ($2,500) may be imposed for each day the violation remains in effect, not to exceed seven thousand five hundred dollars ($7,500) for each violation.

(3) Any penalties imposed by the City shall be imposed in a manner consistent with California Public Utilities Code Section 5900.

(e) Permits and Construction.

(1) Except as expressly provided in this Section, all provisions of Title 7 (Public Works), Chapter 10-16 (Telecommunications Facilities), Sections 6-1.10 (“Insurance—Surety—Indemnification”), 6-1.18 (“Use of Streets”) and 6-1.19 (“Removal and Abandonment of Property of Franchisee”) of the Hercules Municipal Code, and all City administrative rules and regulations developed to any of these provisions, as now existing or as hereafter amended, shall apply to all work performed by or on behalf of a State franchise holder on any City public rights-of-way, public property, or City easement.

(2) Permits. Prior to commencing any work for which a permit is required by Title 7, a State franchise holder shall apply for and obtain a permit in accordance with the provisions of Title 7 and shall comply with all other applicable laws and regulations, including but not limited to all applicable requirements of Division 13 of the California Public Resources Code, Section 21000, et seq. (the California Environmental Quality Act).

(3) The Director shall either approve or deny a State franchise holder’s application for any permit required under subsection (e)(1) of this Section within sixty (60) days of receiving a completed permit application from the State franchise holder.

(4) If the Director denies a State franchise holder’s application for a permit, the Director shall, at the time of notifying the applicant of denial, furnish to the applicant a detailed explanation of the reason or reasons for the denial.

(5) A State franchise holder that has been denied a permit by final decision of the Director may appeal the denial to the City Council by filing a written notice of appeal in duplicate with the Clerk within ten (10) working days of the mailing or posting of Director’s final decision. The notice shall state clearly the reasons why the Director’s decision should be overturned. The Council shall only hear the appeal if the notice is filed and all required fees are paid within the ten (10) day appeal period. Once a notice of appeal has been filed it may be withdrawn by the State franchise holder prior to the distribution of public hearing notices, but not thereafter.

(6) The Clerk shall set the hearing of the appeal and shall give notice of such hearing to the applicant, City Manager and Director, and by posting in the manner required for appeals of Planning Commission appeals set forth in Sections 44.610 and 44.200 of the City of Hercules zoning ordinance. In addition, the City Council may give notice of the hearing in such other manner as it wishes. The City Council may continue from time to time any hearing held by it.

(7) The Director shall transmit the entire record concerning the permit application to the Council.

(8) Appeal hearings shall be conducted in the same manner as public hearings per Section 44.300 of the zoning ordinance. When hearing the appeal, the Council shall consider the record and such additional evidence as may be offered by anyone and may affirm, modify or reverse, in whole or in part, the determination appealed from, or make and substitute such other determination as is warranted, or may remand to the Director for further review and determination. The State franchise holder bears the burden of proof before the Council to prove that one (1) or more reasons exist on the appeal for reversing or modifying the Director’s decision.

(9) The issuance of a permit is not a franchise, and does not grant any vested rights in any location in the public rights-of-way, or in any particular manner of placement within the rights-of-way. Without limitation, a permit to place cabinets and similar appurtenances aboveground may be revoked and the permittee required to place facilities underground, in accordance with applicable law.

(f) Emergency Alert System. Each State franchise holder shall comply with the emergency alert system requirements of the Federal Communications Commission in order that emergency messages may be distributed over the State franchise holder’s network. To the extent consistent with Public Utilities Code Section 5880, each State franchise holder shall install and maintain an audio override on all channels for transmission of emergency messages and alerts, and shall provide for character-generated “crawl” information to be superimposed on all channels for the hearing impaired, as such capability was required under local franchises in effect in the City on January 1 to December 30, 2006.

(g) Public, Educational, and Government Access Channel Capacity, Support, Interconnection, and Signal Carriage.

(1) PEG Channel Capacity.

A. A State franchise holder shall designate a sufficient amount of capacity on its network to allow the provision of at least three (3) PEG channels to satisfy the requirement of Section 5870 of the California Public Utilities Code, within the time limits specified therein.

B. A State franchise holder shall provide an additional PEG channel when the standards set forth in Section 5870(d) of the California Public Utilities Code are satisfied by the City or any entity designated by the City to manage one (1) or more of the PEG channels.

(2) PEG Support.

A. Amount of PEG Support Fee. Any State franchise holder shall pay to the City—or if directed by the City, to the City’s designated PEG provider—a PEG fee equal to one percent (1%) of gross revenues.

B. The PEG support fee shall be used for PEG purposes in a manner that is consistent with State and Federal law.

C. A State franchise holder shall remit the PEG support fee quarterly, within forty-five (45) days after the end of each calendar quarter. Each payment made shall be accompanied by a summary, detailing how the PEG support fee was calculated.

D. In the event that a State franchise holder fails to pay the PEG support fee when due, or underpays the proper amount due, the State franchise holder shall pay interest at the rate per year equal to the highest prime lending rate during the period of delinquency, plus one percent (1%), or the maximum rate specified by State law.

(3) PEG Carriage and Interconnection.

A. As set forth in Sections 5870(b) and 5870(g)(3) of the California Public Utilities Code, State franchise holders shall ensure that all PEG channels are receivable by all subscribers, whether they receive digital or analog service, or a combination thereof, without the need for any equipment other than that needed to receive the lowest cost tier of service. PEG access capacity provided by a State franchise holder shall be of similar quality and functionality to that offered by commercial channels (unless the PEG signal is provided to the State franchise holder at a lower quality or with less functionality), shall be capable of carrying a National Television System Committee (NTSC) television signal, and shall be carried on the State franchise holder’s lowest cost tier of service. To the extent feasible, the PEG channels shall not be separated numerically from other channels carried on the lowest cost tier of service and the channel numbers for the PEG channels shall be the same channel numbers used by any incumbent cable operator, unless prohibited by Federal law. After the initial designation of the PEG channel numbers, the channel numbers shall not be changed without the agreement of the City unless Federal law requires the change.

B. Where technically feasible, each State franchise holder and each incumbent cable operator shall negotiate in good faith to interconnect their networks for the purpose of providing PEG programming. Interconnection may be accomplished by any means authorized under Public Utilities Code Section 5870(h). Each State franchise holder and incumbent cable operator shall provide interconnection of PEG channels on reasonable terms and conditions and may not withhold the interconnection. If a State franchise holder and an incumbent cable operator cannot reach a mutually acceptable interconnection agreement for PEG carriage, the City may require the incumbent cable operator to allow each State franchise holder to interconnect its network with the incumbent cable operator’s network at a technically feasible point on the State franchise holder’s network as identified by the State franchise holder. If no technically feasible point of interconnection is available, each State franchise holder shall make interconnection available to each PEG channel originator programming a channel in the City and shall provide the facilities necessary for the interconnection. The cost of any interconnection shall be borne by each State franchise holder requesting the interconnection unless otherwise agreed to by the parties.

(h) Notices.

(1) Each State franchise holder or applicant for a State franchise shall file with the City a copy of all applications or notices that the State franchise holder or applicant is required to file with the California Public Utilities Commission.

(2) Unless otherwise specified in this Section, all notices or other documentation that a State franchise holder is required to provide to the City under this Section or the California Public Utilities Code shall be provided to both the City Manager and the City staff person in charge of cable and telecommunications, or their successors or designees. (Ord. 443 § 1, 2008)