Chapter 5.22 TELECOMMUNICATION REGULATIONS

The purpose of this chapter is to promote competition in the telecommunications industry, facilitate the development of telecommunications infrastructure, minimize aesthetic impacts and damage to public property, provide for the payment of reasonable compensation for the commercial use of public property, protect public safety, and establish customer service standards. (Ord. 277 § 3, 2002)

5.22.101 Definitions.

All of the following definitions shall be construed liberally for the purpose of maximizing the scope of this chapter.

A. “Basic service” means any service tier which includes the retransmission of local television broadcast signals.

B. “Cable operator” means any person or group of persons (1) who provides cable service over a cable system and directly or through one or more affiliates owns a significant interest in such cable system, or (2) who otherwise controls or is responsible for, through any arrangement, the management and operation of such a cable system.

C. “Cable programming service” means any video programming provided over a cable system regardless of service tier, including installation or rental of equipment used for the receipt of such video programming, other than: (1) video programming carried on the basic service tier; (2) video programming offered on a pay-per-channel or pay-per-program basis; or (3) a combination of multiple channels of pay-per-channel or pay-per-program video programming offered on a multiplexed or time-shifted basis, so long as the combined service consists of commonly-identified video programming and is not bundled with any regulated tier of service.

D. “Cable service” means (1) the one-way transmission to subscribers of (a) video programming, or (b) other programming service, and (2) subscriber interaction, if any, which is required for the selection of such video programming or other programming service.

E. “Cable system” means a facility within the city, consisting of a set of closed transmission paths and associated signal generation, reception, and control equipment that is designed to provide cable service which includes video programming and which is provided to multiple subscribers within a community, but such term does not include (1) a facility that serves only to retransmit the television signals of one or more television broadcast stations; (2) a facility that serves only subscribers in one or more multiple unit dwellings under common ownership, control, or management, unless such facility or facilities uses any public right-of-way; (3) a facility or a common carrier which is considered a cable system under federal law, or (4) any facilities of any electric utility used solely for operating its electric utility system.

F. “Gross noncable revenues” means the revenue derived from the operation of telecommunications facilities other than revenue defined in this section as gross revenue. Gross noncable revenues include, but are not limited to, revenue from (1) subscriber payments for service, equipment, late fees, franchise fees and other charges; (2) advertising carried on the telecommunications facilities or in subscriber bills; and (3) programmers or others relating to transmissions carried on the telecommunications facilities, including but not limited to payments to carry programming and home shopping revenues. Gross noncable revenues include, but are not limited to, all gross revenue whether or not actually received. Gross noncable revenues shall include all gross revenue which is not actually received, such as the value of free service provided to a telecommunications operator’s employees and the value of services bartered or exchanged for nonmonetary consideration. Gross noncable revenues include, but are not limited to, revenues derived from the operation of the telecommunications facilities received or attributed to the franchisee, any direct or indirect affiliate of the franchisee or any partner, joint venturer or other entity related in any similar way to the franchisee. Gross noncable revenues include revenues derived from the provision of internet access, cable modems and similar services unless a cable operator has paid a cable television franchise fee based on the identical revenues. This definition shall be deemed to include all gross receipts or revenues to the full extent permitted by federal law.

G. “Gross revenues” means the revenue derived by a cable operator from the operation of the cable system to provide cable service. Gross revenues include, but are not limited to, revenue from (1) subscriber payments for service, equipment, late fees, franchise fees and other charges; (2) advertising carried on the cable system or in subscriber bills; and (3) programmers or others relating to transmissions carried on the cable system, including but not limited to payments to carry programming and home shopping revenues. Gross revenues include, but are not limited to, all gross revenue whether or not actually received. Gross revenues shall include all gross revenue which is not actually received, such as the value of free service provided to a cable operator’s employees and the value of services bartered or exchanged for nonmonetary consideration. Gross revenues include, but are not limited to, revenues derived from the operation of the cable system received or attributed to the franchise, any direct or indirect affiliate of the franchisee or any partner, joint venturer or other entity related in any similar way to the franchisee. Gross revenues include revenues derived from the provision of internet access, cable modem and similar services unless specifically excluded by federal law. Nothing shall be excluded from gross revenues for any reason, including but not limited to the fact that the cable operator may itemize particular items on subscriber bills such as franchise fees. This definition shall be deemed to include all gross receipts and revenues to the full extent permitted by federal law.

H. “Open video system” means a system within the city for the provision of video programming operated in compliance with Federal Communications Commission regulations.

I. “Open video system operator” means any person or group of persons who have been certified by the Federal Communications Commission as an open video system operator for an open video system located within the city and (1) who provides video programming over an open video system and directly or through one or more affiliates owns a significant interest in such open video system, or (2) who otherwise controls or is responsible for, through any arrangement, the management and operation of such an open video system.

J. “Other telecommunications operator” means any person or group of persons other than a cable operator, an open video system operator, a wireless telecommunications operator or a telephone company (1) who provides telecommunications services over telecommunications facilities and directly or through one or more affiliates owns a significant interest in such telecommunications facilities, or (2) who otherwise controls or is responsible for, through any arrangement, the management and operation of such telecommunications facilities.

K. “Telecommunications facilities” means facilities within the city used or related to the provision of telecommunications services including, but not limited to, wires, optical fiber, antenna, cabinets, pedestals and equipment.

L. “Telecommunications operator” means any person or group of persons (1) who provides telecommunications services over telecommunications facilities and directly or through one or more affiliates owns a significant interest in such telecommunications facilities, or (2) who otherwise controls or is responsible for, through any arrangement, the management and operation of such telecommunications facilities.

M. “Telecommunications services” means the transmission of voice, video, data or other information between two or more points along wires, optical fibers or other transmission media, or using radio waves or other wireless media, including but not limited to cable television services, telephone services, cellular telephone services, personal communications services, internet services, open video system services and other similar services.

N. “Telephone company” means any telephone or telegraph corporation as defined by Sections 234-236 of the Public Utilities Code (or any successor sections) which has obtained a certificate of public convenience and necessity from the California Public Utilities Commission.

O. “Wireless telecommunications operator” means any person or group of persons who provides wireless telecommunications services including, but not limited to, cellular telephone, personal communications system, spread spectrum or other wireless services, and (1) who provides telecommunications services over telecommunications facilities and directly or through one or more affiliates owns a significant interest in such telecommunications facilities, or (2) who otherwise controls or is responsible for, through any arrangement, the management and operation of such telecommunications facilities. (Ord. 277 § 3, 2002)

5.22.102 Applicability.

A. This chapter shall not be deemed to apply to any cable operator which is providing cable service pursuant to a valid franchise on the effective date of the ordinance codified in this chapter until the expiration, termination, renewal or extension of such franchise. This chapter shall not be deemed to conflict with the cable television franchise process prescribed by federal law and, in the event of any such conflict, federal law shall prevail. Any telecommunications operator as defined in this chapter which is operating within the city on the effective date of the ordinance codified in this chapter shall register with the city pursuant to HMC 5.22.103 within six months of the effective date of the ordinance codified in this chapter and shall otherwise comply with this chapter on the effective date of the ordinance codified in this chapter.

B. All telecommunications operators shall comply with all provisions of this article (General Provisions) and all other applicable provisions of this code. In addition, all cable operators shall comply with Article II, all open video system operators shall comply with Article III, all telephone companies shall comply with Article IV, all wireless telecommunications operators shall comply with Article V, and all other telecommunications operators shall comply with Article VI. All telecommunications operators which provide services that fall within more than one of the foregoing categories shall comply with each and every applicable section of this code. (Ord. 277 § 3, 2002)

5.22.103 Registration.

All telecommunications operators who own or lease any telecommunications facilities located in the public right-of-way (excluding telecommunications operators who merely purchase bandwidth on facilities owned by others) shall register with the city on forms provided by the public works department. These forms shall include, but not be limited to, the following:

A. The name and legal status of the registrant, including any affiliates who are required to register pursuant to this section;

B. The name, address and telephone number of an officer, agent or employee who will serve as the contact point for the registrant;

C. A description of the registrant’s existing or proposed telecommunications facilities that are owned or will be used within the city, together with a list of any other telecommunications operators who will be using those telecommunications facilities;

D. A description of the telecommunications services that the registrant is or will be offering using telecommunications facilities within the city;

E. A true and complete copy of the registrant’s applicable certificate of public convenience and necessity, if any, issued by the California Public Utilities Commission;

F. A registration fee in the amount established by the city council. (Ord. 277 § 3, 2002)

5.22.104 Use of public property.

A. Encroachment Permit. Prior to excavating, installing telecommunications facilities upon (including but not limited to placing telecommunications facilities within existing conduit), or otherwise using city-owned property for any purpose that requires an encroachment permit under the city’s encroachment permit ordinance, a telecommunications operator shall obtain an encroachment permit pursuant to this code, and shall comply with all other applicable requirements of those sections.

B. Encroachment Permit Application – Additional Requirements. In addition to the requirements of this code, the encroachment permit application shall include a description of any surplus conduit that the applicant intends to install and the capacity of the telecommunications facilities being installed. If the telecommunications operator is proposing to install telecommunications facilities without utilizing existing surplus conduit, the telecommunications operator shall submit a description of all existing surplus conduit along the proposed route together with an explanation of why that existing surplus conduit is not being utilized. In such a situation, the telecommunications operator shall also submit evidence that it has contacted all other telecommunications operators who are reasonably likely to be installing telecommunications facilities along all or part of the same route and has offered to participate in a joint installation project on reasonable terms. In such a situation where, in addition, the telecommunications operator proposes to install overhead telecommunications facilities, the telecommunications operator shall submit evidence that it has offered to participate on reasonable terms together with other entities utilizing the utility poles to install the telecommunications facilities and other facilities underground. If the telecommunications operator proposes to install utility cabinets or other above-ground facilities, the telecommunications operator shall include information about noise generated, if any, by the facilities and alternatives for reducing the aesthetic impacts of the facilities, including but not limited to size reductions, screening, alternative locations and undergrounding.

C. Conditions of Approval of Encroachment Permit. The public works department may attach any reasonable conditions to the encroachment permit, including but not limited to requiring some or all telecommunications facilities to be placed underground, requiring boring rather than trenching, specifying a future time period when all excavations must take place, specifying the location where facilities may be installed, requiring trenches to remain open for a reasonable period of time to permit installation of facilities by the city or its designees, and requiring the installation of surplus conduits and dedication of such conduits to the city subject to the payment of the direct marginal cost of installing such surplus conduits by the city. The public works department may deny the encroachment permit for failure to comply with the foregoing or any other lawful reason. (Ord. 277 § 3, 2002)

5.22.105 Location of facilities.

A. All telecommunications facilities shall be installed within existing underground ducts or conduits whenever excess capacity is available on usual and customary terms, and shall be arranged in a manner permitting full compliance with all applicable government laws, ordinances, codes, rules, and orders.

B. Overhead facilities maybe installed only if space is available on existing utility poles permitting full compliance with all applicable government laws, ordinances, codes, rules, and orders.

C. Whenever existing telecommunications facilities or electric utility facilities are located underground along a particular street or public way, new telecommunications facilities must be installed underground along that street or public way.

D. Whenever any new or existing telecommunications facilities or electric utility lines are located or relocated underground along a particular street or public way, the telecommunications operator shall relocate its telecommunications facilities underground concurrently with the other lines at its sole expense to the full extent permitted by law.

E. Whenever new telecommunications facilities will exhaust the capacity of a street or otherwise make the installation of future telecommunications facilities impractical, the telecommunications operator installing the new telecommunications facilities shall provide additional ducts, conduits, manholes and other facilities designated by the public works department for reasonable nondiscriminatory access by other telecommunications operators. (Ord. 277 § 3, 2002)

5.22.106 Relocation or removal of facilities.

Within 30 days following written notice from the city, a telecommunications operator shall relocate or remove, without expense to the city, any facilities installed, used and/or maintained by such telecommunications operator if and when such relocation or removal is reasonably necessary or convenient for the construction, repair, maintenance or installation of any city or other public improvement, or for any lawful change of grade, alignment, or width of any public street, way, alley, or place, including the construction of any subway or viaduct, by or on behalf of the city, irrespective of the funding source, or if the facilities have been abandoned or have not been used for a period of 90 days. (Ord. 277 § 3, 2002)

5.22.107 Damage to facilities.

Unless directly and proximately caused by the willful acts of the city, the city and its officials, employees, agents and volunteers shall not be liable for any damage to or loss of any telecommunications facilities as a result of or in connection with any public works or any other acts of the city or its officials, employees, agents or volunteers. (Ord. 277 § 3, 2002)

5.22.108 Restoration of property.

When a telecommunications operator or any person acting on its behalf does any work in or affecting any public property, the cable operator shall, at its sole expense, promptly remove any unauthorized obstructions therefrom and restore such property to as good a condition as existed before the work was undertaken unless otherwise directed by the city. (Ord. 277 § 3, 2002)

5.22.109 Indemnification.

A telecommunications operator shall indemnify, defend and hold harmless the city and its officers, employees, agents and volunteers from and against any and all liability, loss, damage, expense, costs (including without limitation costs and fees of litigation) of every nature arising from the operations of, or the use of public property by, the telecommunications operator or its officers, employees, agents or contractors, except such loss or damage which was caused by the sole negligence or willful misconduct of the city. (Ord. 277 § 3, 2002)

5.22.110 Compliance with zoning.

All telecommunications facilities shall comply with all applicable requirements of this code, including, but not limited to, zoning requirements and building code requirements. In particular, all cellular, PCS and other similar telecommunications facilities shall comply with this code. (Ord. 277 § 3, 2002)

5.22.111 Waiver of provisions.

The city council may waive any provision of this chapter to the extent permitted by law in exchange for exceptional public benefits provided by a telecommunications operator. (Ord. 277 § 3, 2002)

5.22.112 Franchises.

Any person required to obtain a franchise pursuant to this chapter shall, in addition to all other requirements, reimburse the city for all of its costs, including but not limited to all costs of retaining consultants, related to the franchise, regardless of whether the person required to obtain the franchise is successful in the endeavor, or declines to accept the franchise once granted. (Ord. 277 § 3, 2002)

5.22.113 Violations.

A. Repealed by Ord. 370.

B. Civil Penalties. Any person who violates any provision of this chapter, or who violates any condition of any license or permit issued hereunder, or who breaches any franchise agreement or other agreement with the city shall be liable to the city for a civil penalty of $5,000 for each such violation. For continuing violations or breaches, each day that a violation or breach continues shall be deemed a separate violation or breach subject to an additional civil penalty.

C. Termination or Modification of Agreements. If any person breaches any franchise agreement or other agreement made pursuant to this title, the city may, following reasonable notice, opportunity to cure and opportunity to be heard, terminate the agreement or reduce the term of the agreement.

D. Cumulative Remedies. The foregoing remedies shall be deemed nonexclusive, cumulative remedies and in addition to any other remedy the city may have at law or in equity. (Ord. 370 § 56, 2012; Ord. 277 § 3, 2002)

Article II. Cable Television

Division I. Franchising Procedures

5.22.201 Franchise required.

No person shall establish, construct, operate, or maintain within this city a cable system unless a franchise has been obtained pursuant to the provisions of this division, and unless such franchise is in full force and effect. (Ord. 277 § 3, 2002)

5.22.202 Granting.

The city council may grant one or more nonexclusive revocable franchises to establish, construct, operate and maintain cable systems within the city. A franchise shall be effective only upon execution of a franchise agreement between the city and a cable operator and compliance with all requirements of this code. The franchises shall be subject to the provisions of this code as they may be amended from time to time. (Ord. 277 § 3, 2002)

5.22.203 Term of franchise.

A franchise shall be granted for 10 years or such other period as may be specified in the franchise agreement. (Ord. 277 § 3, 2002)

5.22.204 Franchise applications.

All applicants for a new franchise, a franchise renewal or a franchise transfer shall submit a written application to the city. All applicants shall be expected to offer to subscribers a modern, efficient, cost-effective system that will facilitate quality maintenance, deliver a variety of programming and services, and provide the flexibility needed to adjust to changing technology and new developments in the industry. Applicants are encouraged to formulate their proposals in an innovative fashion, so as to meet the informational requirements of the city and the service needs of subscribers. Proposals shall contain sufficient material to enable the city council to make fully informed judgments concerning the adequacy of the proposal and the applicant’s qualifications to construct, operate and maintain a cable system in the city. All applicants shall, at a minimum, provide the following information unless waived by the city manager:

A. The true identity of the franchise applicant, including all affiliates of the applicant.

B. A description of the cable services that are or will be offered or provided by the franchise applicant over its existing or proposed facilities.

C. A technically detailed and comprehensive description of the transmission medium that will be used by the cable operator to offer or provide such cable services.

D. Preliminary engineering plans, specifications and a network map of the facilities to be located within the city, all in sufficient detail to identify:

1. The location and route requested for applicant’s proposed cable facilities.

2. The location of all overhead and underground public utility, telecommunication, cable, water, sewer drainage and other facilities in the public way along the proposed route.

3. The location(s), if any, for interconnection with the cable facilities of other cable carriers.

4. The specific trees, structures, improvements, facilities and obstructions, if any, that applicant proposes to temporarily or permanently remove or relocate.

E. If applicant is proposing to install overhead facilities, evidence that adequate surplus space is available for locating its cable facilities on existing utility poles along the proposed route.

F. If applicant is proposing an underground installation in existing ducts or conduits within the public ways, information in sufficient detail to identify:

1. The excess capacity currently available in such ducts or conduits before installation of applicant’s cable facilities;

2. The excess capacity, if any, which will exist in such ducts or conduits after installation of applicant’s cable facilities.

G. A preliminary construction schedule and completion dates.

H. Financial statements prepared in accordance with generally accepted accounting principles by a certified public accountant or other accountant satisfactory to the city demonstrating the applicant’s present and future financial ability to construct, operate, maintain, relocate, and remove the facilities. If in the normal course of its business, the applicant does not prepare a separate financial statement for the franchised system, the applicant may submit a combined financial statement for the local region, which statement shall include the franchised system.

I. Information in sufficient detail to establish the applicant’s technical qualifications, experience and expertise regarding the cable facilities and services described in the application.

J. Information to establish that the applicant has obtained all other governmental approvals and permits to construct and operate the facilities and to offer or provide the cable services.

K. A detailed description of all telecommunications services that the applicant intends to provide and sufficient information to determine whether such services are subject to franchising.

L. An accurate map showing the location of any existing cables facilities in the city that applicant intends to use or lease, if any.

M. A description of the services or facilities that the applicant will offer or make available to the city and other public, educational and governmental institutions.

N. A description of applicant’s access and line extension policies.

O. The area or areas of the city the applicant desires to serve and a schedule for build-out to the entire franchise area.

P. The number of activated, programmed channels that the applicant intends to provide together with the programming that the applicant intends to provide.

Q. All fees, deposits or charges required pursuant to HMC 5.22.205.

R. Such other and further information as may be requested by the city manager.

If a franchise is granted to a person, firm or corporation posing as a front or as the representative or another person, firm or corporation, and such information is not disclosed in the original application, such franchise shall be deemed void and of no force and effect whatsoever. (Ord. 277 § 3, 2002)

5.22.205 Application fee.

A. An application fee for a new, renewal or transfer of franchise shall be required in the amount established from time to time by resolution of the city council.

B. The purpose of the application fee is to pay the cost of studying, investigating and otherwise processing such application, which shall be in consideration thereof and not returnable or refundable in whole or in part. Application fees are over and above construction inspection and permit fees. Application fees shall include, but not limited to, all costs incurred in assessing community needs, conducting public meetings, and reviewing applications and negotiating franchise agreements, including consultant and attorney fees. (Ord. 277 § 3, 2002)

5.22.206 New franchise procedure.

Upon receipt of an application for a new franchise, the city council may, by resolution, approve or conditionally approve a franchise agreement with the applicant or deny the application. In making any determination hereunder as to any application, the city council shall give due consideration to: the quality of the service proposed; rates to subscribers; experience, character, background and financial responsibility of the applicant, its management and owners; system design; technical and performance quality of equipment; willingness and ability to meet construction requirements and to abide by franchise limitations and requirements; and other considerations deemed pertinent by the city council for safeguarding the interests of the city and the public. (Ord. 277 § 3, 2002)

5.22.207 Franchise renewal procedure.

A. During the six-month period which begins with the thirty-sixth month before the franchise expiration, a proceeding to consider the renewal of a franchise shall be commenced either upon receipt of a written notice from the cable operator requesting such a proceeding, or upon the city’s own initiative. If the city receives such a notice from the cable operator, it shall commence the proceeding within six months of receipt. This proceeding shall be for the purpose of, among other things, identifying the future cable-related community needs and interests, and reviewing the performance of the cable operator under the franchise during the then-current franchise term. The proceeding shall include, without limitation, a review of the foregoing matters by city staff and at least one noticed public meeting. The proceeding shall not be deemed complete until the review has been completed and the city has given the cable operator written notice of cable system and service features necessary to meet future cable-related community needs and interests, and of information that must be included in a proposal for a renewal, and of a deadline for submission of a renewal proposal.

B. Upon completion of the proceeding described in subsection A of this section, the cable operator may submit a proposal for renewal. Any such proposal shall include the matters described in HMC 5.22.204 and subsection A of this section.

C. Upon receipt of a renewal proposal pursuant to subsection B of this section, the city shall provide prompt public notice of the proposal. Within four months after receipt of the proposal, the city shall either (1) renew the franchise or renew the franchise subject to conditions by adoption of a city council resolution approving a franchise agreement; or (2) issue a preliminary assessment that the franchise should not be renewed and, at the request of the operator or on its own initiative, commence an administrative proceeding concerning the renewal.

D. Any administrative proceeding pursuant to subsection (C)(2) of this section shall consider whether:

1. The cable operator has substantially complied with the material terms of the existing franchise and with applicable law;

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

3. The operator has the financial, legal and technical ability to provide the services, facilities, and equipment as set forth in the operator’s proposal; and

4. The operator’s proposal is reasonable to meet the future cable-related community needs and interests, taking into account the cost of meeting such needs and interests.

The cable operator shall be given at least 14 days’ advance notice of the administrative proceeding. The cable operator shall be afforded fair opportunity for full participation, including the right to introduce evidence, to require the production of evidence and to question witnesses. A transcript shall be made of the proceeding. At the completion of the proceeding, the city shall issue a written decision, with the reasons therefor, granting, conditionally granting or denying the proposal for renewal based upon the record of the proceeding. The city shall transmit a copy of the decision to the cable operator. Any denial of a proposal for renewal made in compliance with subsection B of this section shall be based on one or more adverse findings made with respect to the factors described in this subsection. A denial may not be based on any violation of the franchise or any events described in subsection (D)(2) of this section which occurred after 1984 unless the city provided the cable operator with notice and the opportunity to cure, or in any case in which it is documented that the city waived its right to object, or the cable operator gave written notice of a failure or inability to cure and the franchising authority failed to object within a reasonable time after receipt of such notice.

E. The city and a cable operator may agree to waive the provisions of subsections A through D of this section. If the city and a cable operator agree to such a waiver, the cable operator may submit a proposal for the renewal of a franchise pursuant to this subsection at any time, and the city may, after affording the public adequate notice and opportunity for comment, renew the franchise or renew the franchise subject to conditions by adoption of a city council resolution approving or conditionally approving a franchise agreement, or deny the franchise renewal. The provisions of subsection A through D of this section shall not apply to a decision to grant or deny a renewal pursuant to this subsection. The denial or a renewal pursuant to this subsection shall not affect action on a renewal proposal that is submitted in accordance with subsections A through D of this section.

F. The provisions of subsections A through D of this section are intended to reflect federal law and may be modified to conform to any changes in federal law. (Ord. 277 § 3, 2002)

5.22.208 Transfer of ownership.

A. A franchise is a privilege to be held in personal trust by the original cable operator. A cable operator shall not sell, transfer, lease, dispose of or assign this franchise or any rights thereunder, including any beneficial interest or right to operate thereunder, by voluntary sale, merger, consolidation, or otherwise or by operation of law, without the prior approval of the city council.

B. If a cable operator is a partnership or a corporation, prior approval of the city council is also required when there is an actual change in control of the cable operator. A change in control shall be deemed to include, but is not limited to, the following: (1) in the case of a partnership, the general partner changes, (2) ownership of 20 percent or more of its voting stock or the voting stock of any parent or affiliate which directly or indirectly through other affiliates owns 20 percent or more of the cable operator’s voting stock is to be acquired by a person or group of persons acting in concert. The word “control” as used in this section is not limited to major stockholders but includes de facto control or significant influence with respect to the operation of the cable operator’s cable system. For purposes of this section, “significant influence” occurs where a person other than the cable operator or a person controlling, controlled by or under common control with the cable operator exercises working or effective control of decisions affecting the operation of the cable system.

C. The consent of the city council is not required for transfer of the franchise to a wholly owned subsidiary of the cable operator or to any person controlling, controlled by or under common control with the cable operator providing any such person agrees in writing to be bound by the existing franchise and provides bonds and insurance acceptable to the city. The city shall continue to regard the cable operator and its transferee as a single entity for all purposes.

D. A cable operator’s execution of a deed of trust, mortgage or other instrument given merely to secure the payment of any indebtedness of a cable operator shall not constitute a transfer under this division and shall not require the consent of the city council.

E. Upon foreclosure or other judicial sale of all or a substantial part of the system or upon the termination of a lease covering all or a substantial part of the system, the cable operator shall notify the city of the fact. The notification shall be considered as notice that a change in control of the cable operator has occurred. In this case the city council’s approval of the new owner of the system must be obtained as herein required.

F. Prior to any transfer or change in control, a cable operator shall submit to the city any form required by federal law together with the matters described in HMC 5.22.204. The city council shall approve, conditionally approve or deny the transfer or change in control within 120 days following receipt of all required material unless an extension is agreed to by the city and the cable operator. Conditions of approval may include, but are not limited to, the following: (1) resolution of any outstanding franchise violations or performance deficiencies; (2) payment of any outstanding franchise fees; (3) payment of city costs incurred in reviewing the transfer; (4) filing of any appropriate bonds, insurance endorsements, letters of credit or guarantees; and (5) written assumption of all obligations of the transferor by the transferee.

G. Within 30 days after the date of the resolution approving transfer of the franchise, or within such extended period of time as the city council in its discretion may authorize, the transferee shall file with the clerk of the city council its written acceptance of the franchise, in a form satisfactory to the city, together with all required bonds and insurance certificates, and its agreement to be bound by and to comply with and to do all things required of it by the provisions of this division and the franchise award resolution. Such acceptance and agreement shall be acknowledged by the transferee before a notary public and shall be in a form and content satisfactory to and approved by the city attorney.

H. The city may cancel a franchise 60 days or later after the appointment of a receiver or trustee to take over and conduct the business of the cable operator, whether in receivership, or other action or proceeding, unless the receivership or trusteeship is vacated prior to the expiration of the 60 days, or unless:

1. Within 60 days after his election or appointment, the receiver or trustee complies with this division and remedies all defaults; and

2. Such receiver or trustee, within 60 days, executes an agreement, approved by the court, whereby the receiver or trustee assumes and agrees to be bound by this division and the franchise granted to cable operator.

I. Failure to comply with the requirements of this section is a material breach of this title, subject to the remedies provided for herein. (Ord. 277 § 3, 2002)

5.22.209 Unauthorized operation of cable system.

If a cable system is established, constructed, operated or maintained within the city without the franchise required by this division, the city may notify the cable operator of the franchise requirement. If the operator continues an unauthorized operation for 30 days after such notice from the city, the operator shall forfeit to the city all gross revenues from the system for so long as such unauthorized operation continues. The city may also pursue any civil or criminal remedies, including but not limited to obtaining injunctive relief to immediately enjoin the continued unauthorized operation. (Ord. 277 § 3, 2002)

5.22.210 Annexations.

Within 30 days after annexation of areas to the city which are served by a cable operator who does not have a franchise from the city, the cable operator shall apply for a new franchise. Pending consideration of such a franchise, the cable operator shall comply with each and every provision of this article, including, but not limited to, the franchise fee requirement. If a newly annexed area is not actively served by a cable operator, the cable operator(s) serving the area with the city contiguous to the newly annexed area shall provide service to that area subject to the provisions of its franchise agreement. (Ord. 277 § 3, 2002)

5.22.211 Joint exercise of powers agreement.

Should a joint exercise of powers agreement (Gov. Code, Section 6500 et seq.) or similar agreement be entered between the county and a city or cities located therein in accordance with law providing for the joint regulation of cable operators and cable services or other cooperative arrangements, involved cable operators shall be governed by, and subject to that agreement, pursuant to this title’s provisions; provided, that no such joint powers agreement shall impair any right or obligation of the cable operator under a franchise agreement. (Ord. 277 § 3, 2002)

5.22.212 Reservation of rights.

Insofar as it is not preempted by federal or state regulations, the city reserves all rights it may have or subsequently acquire under state, federal or other law with respect to the regulation of cable services or other communication services by a cable operator. The city further reserves the right to amend this code and apply such amendments to an incumbent cable operator in any manner that is not explicitly prohibited by a franchise agreement. A franchise granted pursuant to this article shall not be deemed to authorize or prohibit the provision of telecommunications services other than cable services. The provision of such other telecommunications services shall be governed exclusively by other articles of this chapter. (Ord. 277 § 3, 2002)

Division II. City Regulation of Franchise

5.22.216 Administration.

The office of the city manager is designated as having primary responsibility for the administration of the franchise and this article. Whenever a right may be exercised under this article by the city or the city manager, such right may also be exercised by a designee or employee. (Ord. 277 § 3, 2002)

5.22.217 Cable programming.

If provided for in the franchise agreement, the cable programming offered by the cable operator shall include at a minimum each of the following categories as is appropriate to the franchise area: community, family, children’s, news and public affairs, sports, cultural, religious, arts and music, minority or foreign language, and educational for all ages. (Ord. 277 § 3, 2002)

5.22.218 Basic service.

Basic service shall be available to all subscribers. No subscriber shall be required to purchase any other service as a prerequisite to purchasing basic service. Basic service shall include all public, educational and government channels at no extra charge. (Ord. 277 § 3, 2002)

5.22.219 Required channel capacity.

The cable system shall have the capacity, the number of activated and programmed channels and the data/video return (“two-way” or “upstream”) capability specified in the franchise agreement. The cable system shall have a maximum frequency of no less than 860 MHz or such other frequency that is specified in the franchise agreement. (Ord. 277 § 3, 2002)

5.22.220 Performance evaluation sessions.

The city and each cable operator shall hold scheduled performance evaluation sessions as specified in the franchise agreement. (Ord. 277 § 3, 2002)

5.22.221 Integration of advancements in technology.

In addition to such upgrades as may be required under a franchise agreement, it is the responsibility of a cable operator to periodically review upgrading its cable system to integrate advancements in technology as may be required to meet the needs and interests of the community in light of the costs thereof. It is recognized that subscribers in the city have an especially strong interest in a system design that will eliminate the need for set-top converters not necessary for advances in technology and/or otherwise permit subscribers to fully utilize the capabilities of consumer electronic equipment while receiving cable service.

To assist the city to understand the practical applications of developments in cable technology, the franchisee shall submit a report to the city every odd-numbered year during the franchise term. Each report shall describe developments in cable technology that have been incorporated into cable systems of comparable size in the United States, and whether, how, and by what date the franchisee plans to incorporate those technological developments into the system. In addition, the report shall describe the effect of those developments on public, educational, and governmental use of the cable system, and the effect and compatibility of those technological changes on other consumer electronic equipment. Except as provided in a franchise agreement, the city, on receipt of each plan, may promptly schedule hearings to consider whether the cable operator’s timetable for implementing the new technologies is adequate to meet the future cable-related needs and interests of the city. Except as provided in a franchise agreement, if the city considers the plan to be adequate, the city shall adopt it and the franchisee shall be bound to implement it as if it were set forth herein.

Any increased charges by a cable operator to subscribers for providing basic cable services in compressed or digitized forms shall comply with standard industry practices at the time such technology is introduced into the system. The introduction of compressed or digitized programming shall be a business decision of the cable operator made in good faith after due consideration of the needs and interests of the community, advancement in technology, the availability of programming and the cost to subscribers. (Ord. 277 § 3, 2002)

5.22.222 Cable service to public buildings occupied by pubic agencies.

A cable operator shall install, at no charge, at least one service outlet per public agency at all buildings occupied by public agencies within the franchise area, and shall charge only its time and material costs for any additional service outlets to such facilities. The cable operator shall provide basic cable service and cable programming service in all outlets in such buildings free of charge. “Public agency” shall mean an agency of the city, county, state or federal governments, including school districts and any political subdivision of the state of California. (Ord. 277 § 3, 2002)

5.22.223 PEG channels.

The cable operator shall make available one or more dedicated channels on its cable system for purposes of public, educational and governmental access, as set forth in the franchise agreement. Such channels shall be available on the lowest tier of basic service. Such channels shall not be used for any advertisements or commercial programming without the permission of the city. (Ord. 277 § 3, 2002)

5.22.224 PEG facilities.

The cable operator shall provide facilities, services and equipment for use in relation to public, educational and governmental access to the extent provided in the franchise agreement. (Ord. 277 § 3, 2002)

5.22.225 Public access usage management.

Nothing in this section shall prevent the city from delegating to an independent nonprofit entity such as a commission or nonprofit corporation the authority to manage all or any part of the city’s PEG facilities, programming and/or funds. The commission or nonprofit corporation may be established jointly with neighboring jurisdictions at the city’s sole option. (Ord. 277 § 3, 2002)

5.22.226 Interconnection.

A cable operator shall design its system so that it may be two-way interconnected with any or all other cable television systems or similar communications systems in the area. Interconnection of systems may be made by direct cable connection, microwave link, satellite or other appropriate methods.

A cable operator may interconnect its system with other cable systems upon its own initiative, or upon request of the city council to interconnect. If so requested, a cable operator shall begin good faith negotiations concerning interconnection with the other affected system or systems. If so requested, a cable operator shall interconnect with any adjacent cable system which is controlled by the cable operator or which is under common control.

All signals to be interconnected will comply with FCC technical standards for all classes of signals and will result in no more distortion than on cable operator’s subscriber cable system.

A cable operator shall cooperate with any interconnection corporation, regional interconnection authority, state or federal regulatory agency which may be hereafter established for the purpose of regulating, facilitating, financing or otherwise providing for the interconnection of communications systems beyond the boundaries of the city. (Ord. 277 § 3, 2002)

5.22.227 Emergency override.

To provide an emergency alert capability directly and securely accessible by the city, the cable operator shall install and maintain an emergency alert system which allows the city to simultaneously override audio signals and broadcast emergency messages on all television channels. In case of public emergency, the city may, as directed by the administrator of emergency services or other authorized official, activate and use such emergency override system for the duration of the emergency. The cable operator shall assist and cooperate with the city in periodic testing of the emergency override systems. (Ord. 277 § 3, 2002)

5.22.228 Tree trimming.

When trimming trees, whether on public or private property, a cable operator shall comply with all city tree trimming regulations applicable to utilities. (Ord. 277 § 3, 2002)

5.22.229 Removal and abandonment of cable system.

In the event that a franchise is terminated or expires without being removed, or if all or a portion of the cable system is not used for a period of 90 days, the cable operator shall either remove the cable system or the abandoned portion thereof or shall obtain the permission of the public works director to abandon the cable system in place within 90 days. The cable operator shall obtain an encroachment permit prior to removing the cable system. (Ord. 277 § 3, 2002)

5.22.230 Acquisition of cable system.

Notwithstanding the granting of a franchise, the city retains the right to acquire the cable system at any time by negotiated sale or eminent domain, and retains the right to resell the cable system to any third party. If the city denies the renewal of the franchise, the city may acquire the cable system at a price not to exceed fair market value, determined on the basis of the cable system valued as a going concern but with no value allocated to the franchise itself or any use of the cable system for purposes other than cable television services. If the city revokes a franchise, the city may acquire the cable system at a price not to exceed the depreciated book value of the cable system. (Ord. 277 § 3, 2002)

Division III. Customer Service

5.22.236 Continuity of service.

Customers have the right to receive, and the cable operator has the obligation to provide, efficient service, high-quality reception, prompt repairs and service interrupted only for good cause and for the shortest possible time. It shall be the right of all subscribers to continue receiving service insofar as their financial and other obligations to the cable operator are honored. In the event that the cable operator elects to over build, rebuild, modify, or sell the system, or the city council gives notice of intent to terminate or fails to renew this franchise, the cable operator shall act so as to ensure that all subscribers receive continuous, uninterrupted service. (Ord. 277 § 3, 2002)

5.22.237 Nondiscriminatory services.

The cable operator shall not deny service or access or otherwise discriminate against subscribers, channel users or general citizens on the basis of race, color, religion, national origin, sex, age, disability or occupation. Nothing in this section shall be deemed to prohibit senior discounts. (Ord. 277 § 3, 2002)

5.22.238 Local office.

The cable operator shall maintain a local business office in a location specified in the franchise agreement which shall be open to the public at least nine hours per day each weekday and at least four hours per day on weekends. (Ord. 277 § 3, 2002)

5.22.239 Line extensions.

A. The cable operator must extend and make cable television service available to every business location (other than home occupations) unless, due to the low density of businesses in a particular area, the city waives this requirement. The cable operator must extend and make cable television service available to every dwelling unit within three months in any unserved area reaching the average density of 10 occupied residential dwelling units per one-quarter mile, as measured from the nearest active coaxial feeder line. Extension of cable television service to any unserved area satisfying the foregoing requirements will be subject to the following:

1. Each occupied residential dwelling unit must be located within a distance of no more than 150 feet from the anticipated location of such extension; provided, that an occupied residential dwelling unit located more than this distance from the anticipated location of such extension shall be counted if the owner or occupant agrees to pay the cable operator an additional amount not to exceed the actual time and materials cost of the portion of the drop to such residential dwelling unit exceeding 150 feet; and

2. The cable operator is able to secure all necessary easements or rights-of-way for purposes of locating its cable systems in the area of such extension.

B. In areas not meeting the requirements for mandatory extension of service, the cable operator shall provide, upon the request of a potential subscriber desiring service, an estimate of the reasonable costs required to extend service to said subscriber, including materials, labor, overhead and private easements, if necessary. The cable operator shall then extend service within four months upon request of said potential subscriber, who shall be responsible for all reasonable costs associated with the extension. The cable operator may require advance payment or assurance of payment satisfactory to the cable operator. (Ord. 277 § 3, 2002)

5.22.240 New service requests.

A. The cable operator shall provide service to all dwelling units and all business locations within the city (subject to the limitations on line extensions in HMC 5.22.239) pursuant to the following requirements.

B. In any case in which either no new drop is required, or a new aerial drop is required of no more than 150 feet measured from the nearest point of the cable system to the nearest point on the structure to be served, or a new underground drop is required of 75 feet or less as measured from the nearest point of the cable system to the nearest point on the structure to be served, the cable operator shall make cable service available at the standard connection charge within seven days of receipt of any service request. In any case in which a new drop is required which is longer than the foregoing standards, the cable operator shall make cable service available at the standard connection charge within 14 days of receipt of any service request. Notwithstanding the foregoing, if the service request requires a drop in excess of 150 feet, the cable operator may charge the business or resident requesting service an additional amount which shall not exceed the actual time and materials cost of the drop in excess of 150 feet.

C. Upon receiving a request for new service, the cable operator shall make reasonable efforts to promptly acquire all easements or rights of occupancy necessary for extension of service to such resident’s home and not already secured by the cable operator. The cable operator shall not be required to install service until such easements or rights of occupancy have been acquired. (Ord. 277 § 3, 2002)

5.22.241 System or individual outage complaints.

A. Upon receipt of a service complaint, the cable operator shall respond as follows: (1) to a system outage of one or more channels, within two hours; (2) to an individual outage of one or more channels, within 24 hours; and (3) to all other reception problems, by the next working day or as agreed upon by the subscriber and the cable operator. The cable operator shall have available at all times a sufficient number of technicians capable of responding to the foregoing matters within the foregoing time frames.

B. The cable operator will be deemed to have responded to a service complaint when a field service representative competent to fix the problem arrives at the service location (which may be some portion of the cable system and not a subscriber’s residence) and begins work on the problem. In the case of a response which involves request for service at a subscriber’s residence, and the subscriber is not home when the field service representative arrives, response will be deemed to have taken place if the field service representative leaves notification of arrival and instructions for rescheduling on the subscriber’s front door.

C. Where the cable operator is unable to respond to a service complaint within the applicable time period specified in this section, the cable operator shall make reasonable efforts, within such time period, to notify the complainant of the reason(s) and the estimated time frame for correction, and shall proceed to correct the service complaint at the earliest possible time. (Ord. 277 § 3, 2002)

5.22.242 Scheduling appointments.

All appointments for service, installations, or disconnection shall be specified by date. At the subscriber’s option, weekday service calls shall be scheduled as morning or afternoon appointments during specified four-hour blocks of time. For service calls responding to system or individual outages, holiday and weekend scheduling shall also be available. If the appointment cannot be kept, the cable operator shall make reasonable efforts to promptly notify the subscriber in advance and reschedule the appointment. A cable operator may not cancel an appointment with a subscriber after the close of business on the business day prior to the scheduled appointment.

Subscribers who have experienced a missed appointment due to the fault of a cable operator shall receive installation free of charge (if the appointment was for installation). The subscriber shall receive a credit against the basic service charge in the minimum amount of $20.00 if the missed appointment is for a service call. Alternatively, subscribers may pursue their remedies pursuant to Civil Code Section 1722. (Ord. 277 § 3, 2002)

5.22.243 Notification of service interruption.

Where service interruptions of one hour duration or longer are planned, the cable operator shall notify subscribers at least 24 hours before the anticipated interruption; provided, that no notification shall be required for service interruptions occurring between 2:00 a.m. and 6:00 a.m. Notification need not be repeated before each anticipated interruption as long as the initial notification advises of the possibility of repeated interruptions during a specified period not to exceed one month. To the extent feasible, the cable operator shall avoid interruptions between 5:00 p.m. and midnight. (Ord. 277 § 3, 2002)

5.22.244 Notification of service or channel changes.

The cable operator shall notify subscribers of any changes in programming services or channel positions as soon as possible through announcements on the cable system and in writing. Notices must be given to subscribers a minimum of 30 days in advance of such changes if the change is within the control of the cable operator. Cable operator shall provide a copy of all notifications to the city and shall make its best effort to do so at least seven days in advance of the distribution to subscribers. If the subscriber notice is not timely provided, the proposed change may not occur until and unless the proper notice is provided. (Ord. 277 § 3, 2002)

5.22.245 Telephone communication service.

A. The cable operator shall render efficient telephone communication service, sufficiently staffed by knowledgeable courteous personnel.

B. Customer Service Response. At a minimum, the cable operator shall have on duty a sufficient number of customer service representatives available to handle customer calls during all hours that the business office is open. During times not handled by customer service representatives, each system must have a capable answering service for repair requests or service complaints. Answering machines are not acceptable, except for automated response units that are used to process and route calls to on-duty personnel of the cable operator.

C. Telephone System Requirements. The cable operator shall at all times provide a telephone system meeting the following requirements:

1. Each cable operator shall have a phone system with sufficient capacity to promptly respond to telephone calls. Telephone numbers for customer service shall be listed in a local telephone directory. All telephone lines for customer service shall be toll free to subscribers within the franchise area.

2. Knowledgeable, qualified customer service representatives shall be available to respond to customer telephone inquiries during all hours that the business office is open.

3. Under normal operating conditions, telephone answer time by a customer service representative, including wait time, and the time required to transfer the call, shall not exceed 30 seconds from the completion of the first ring from the local telephone company, or if cable operator’s telephone is configured to answer prior to the first ring from the time of call connection from the local telephone company. Those systems which utilize automated answering and distributing equipment shall limit the number of routine rings to four or fewer. Systems not utilizing automated equipment shall make every effort to answer incoming calls as promptly as the automated systems. Under normal operating conditions, the customer shall receive a busy signal less than three percent of the total time that the telephone system is staffed by customer service representatives. These standards shall be met no less than 80 percent of the time measured quarterly. If the city receives complaints indicating a significant problem in any telephone system, the city may require the cable operator to meet the above standards not less than 80 percent of the time measured over a 60-day period until such time as the performance is perceived to be satisfactory.

4. The cable operator shall, by means of automatic monitoring equipment, track all customer service telephone calls and prepare monthly summaries of all calls according to the criteria listed in subsection (C)(3) of this section. Such report shall be delivered to the city annually and, in addition, as requested by the city, between annual reports.

5. Notwithstanding subsection (C)(3) of this section, in cases of major system outages or major service interruption, the cable operator may provide a recorded message informing customers of the problem and probable correction time as long as customers are still able to reach a customer service representative.

6. In cases where the cable operator’s existing telephone system cannot demonstrate compliance with the standards set forth in subsections (C)(3) or (4) of this section, the franchise agreement may specify comparable criteria for the cable operator’s telephone system and the time frame for compliance with the standards set forth in this section. (Ord. 277 § 3, 2002)

5.22.246 Complaint log.

The cable operator shall keep a computer log or written record for at least three years of:

A. All service calls and complaints which require the dispatch of a service vehicle to respond to the service call or complaint; and

B. All calls regarding outages, regardless of whether a service vehicle was dispatched, together with the disposition of all such calls.

This record shall be available for public inspection by the affected subscriber at the local office of the cable operator during regular office hours such that each subscriber may examine his or her own records. The log or record shall be available for inspection by the city at any time at the local office of the cable operator during regular office hours. Before making a record available for inspection under this section, the cable operator may require reasonable advance notice, which shall in no event exceed one working day. Except where a subscriber has granted the city permission in writing to review subscriber’s individually identifiable information, the cable operator shall redact from said log or record all individually identifiable subscriber information prior to delivery to or inspection by the city. (Ord. 277 § 3, 2002)

5.22.247 Subscriber test request.

Upon reasonable request or complaint by a subscriber, the cable operator shall, at its sole expense, perform such signal level tests as necessary to establish if a signal of requisite quality is being delivered to the subscriber’s premises. The test shall be conducted at the subscriber’s receiver and at other such locations deemed necessary by the cable operator, and a copy of the written test results shall be made available to the subscriber upon request. (Ord. 277 § 3, 2002)

5.22.248 Conditions of service – Subscriber information.

The cable operator shall send or deliver to all new and reconnected subscribers in writing and to all subscribers at least once a year, in a form easy to read and understand, information concerning the conditions of service, including but not limited to: rates, fees, charges, deposits, refunds of deposits, available levels of service (tiers), payment options, discounts (if any), service call policy, privacy protection and disconnection and reconnection policy. The cable operator shall provide a copy of such information to the city prior to its distribution to the cable operator’s subscribers for review and comment. (Ord. 277 § 3, 2002)

5.22.249 Complaints – Subscriber information.

Upon connection on or reconnection to the system and at least once a year, the cable operator shall, by appropriate means, such as a card or brochure, printed notice on billing statement, or billing insert, furnish to each subscriber information concerning the procedures for making inquiries or complaints to the cable operator or the city, including the name, address and local telephone number of the cable operator and the city. The form and content of the complaint notice shall be subject to review and comment by the city. (Ord. 277 § 3, 2002)

5.22.250 Investigation of complaints.

A. When there have been a significant number of complaints made, or where there exists other evidence which, in the judgment of the city, indicates a problem with the reliability or quality of cable service as required under this title or in the franchise agreement, the city council shall have the right and authority to request the cable operator to evaluate the performance, operation or administration of the cable system including without limitation matters relating to customer service. The cable operator shall fully cooperate with the city in performing such evaluation and shall prepare results and a report, if requested, within 30 days after notice. Such report shall include the following information:

1. The nature of the complaint or problem which precipitated the evaluation;

2. What system component, operation or service was evaluated;

3. The equipment used and procedures employed;

4. The method, if any, by which such complaint or problem could be or has been resolved; and

5. Any other information pertinent to the evaluation which may be required.

B. The city may require that evaluations be supervised, or conducted, at a cost to be paid by the cable operator, by an inspector, accountant or other consultant selected by the city and not on the permanent staff of the cable operator or the city. The engineer, accountant or other consultant shall sign all records of the evaluation and forward to the city such records with a report interpreting the results of the evaluation and recommending actions to be taken. The city’s rights under this section shall be limited to evaluating specific subjects and characteristics based on complaints, circumstances or other evidence which cause the city to reasonably believe that evaluation is necessary to protect the public against substandard cable service. (Ord. 277 § 3, 2002)

5.22.251 Noncompliance with standards.

In the event of repeated and verifiable noncompliance with the customer service standards contained in this chapter, the city may, in addition to pursuing any other civil or criminal remedy, direct the cable operator to add sufficient personnel and/or telephone lines and equipment to ensure compliance with such standards. (Ord. 277 § 3, 2002)

5.22.252 Billing, late fees, disconnection of service and notification of rate changes.

A. Bills for service shall be monthly. Nothing in this section shall prohibit voluntary prepayment of services by subscribers; provided, that the cable operator shall not be required to offer or accept any discount or other reduction in the amount paid by any subscriber for a voluntary prepayment of services. Bills shall include a listing of the cable operator’s customer service telephone number in a manner that makes such number significantly more prominent than any other telephone number listed on the bill. Bills shall not list the city’s telephone number in a manner that causes confusion to the public. All telephone numbers shall be listed on the bill in a form approved by the city.

B. Bills will be clear, concise and understandable. Bills must be fully itemized, with itemizations including, but not limited to, basic and premium service charges and equipment charges. Bills will also clearly delineate all activity during the billing period, including optional charges, rebates and credits.

C. In case of a billing dispute, the cable operator must respond to a written complaint from a subscriber within 30 days.

D. Before itemizing on subscriber bills any fees, taxes, assessments or other items payable to the city the itemization of which is not expressly authorized by state or federal statute or regulation, the cable operator shall submit a sample bill to the city for review and comment. In the event that the billing language proposed by the cable operator is misleading or incomplete, the cable operator shall modify the same as requested by the city or shall include a reasonable explanation as agreed to by the city and the cable operator.

E. Charges on a bill shall not be deemed delinquent and a subscriber shall not be subject to a late fee, so long as payment is received from the subscriber within 10 days after the end of the service period covered by the bill.

F. A cable operator shall only disconnect a subscriber’s service for good cause. A cable operator shall not disconnect service for nonpayment until the cable operator has provided the subscriber with notice, provided on or after the due date of the subscriber’s bill and separately from that bill or any other standard monthly bill, at least 10 days in advance of the disconnection. The notice shall specify the earliest date the disconnection will occur, the total payment required to avoid disconnection and the telephone number and office hours to contact a customer service representative. In no event shall disconnection for nonpayment occur less than 14 days after the end of any billing period for which charges are delinquent. If service is disconnected by the cable operator’s personnel at or near the drop to the subscriber, such personnel shall first attempt to visit the subscriber and give the subscriber an opportunity to continue service by paying all accrued charges. (Ord. 277 § 3, 2002)

5.22.253 Credits for outages.

A. Except for loss of service beyond the reasonable control of the cable operator, after notification from a subscriber of an individual or system outage and following the time frames set out in HMC 5.22.241 for an opportunity to cure, the cable operator shall, upon request, credit the subscriber’s account on a pro rata basis one-thirtieth of the subscriber’s monthly rate for each day or portion of a day that the system or individual outage continues. In addition, in cases where, within any seven-day period, there have been more than six individual outages, system outages or service interruptions of 15 minutes or more, the cable operator shall, upon request, credit the subscriber’s account for one-fourth of the subscriber’s monthly rate. Should an individual or system outage affect a pay-per-view or other similarly priced per-event service, the subscriber shall, upon request, be credited the charges for such service. Credit shall be given under this section only if the subscriber has notified the cable operator of the outage within 48 hours of its occurrence and has provided access to the cable operator as necessary to correct the problem.

B. Nothing in this section shall prohibit the cable operator from giving other credits. (Ord. 277 § 3, 2002)

5.22.254 Refund of deposits.

The cable operator shall refund all subscriber deposits within 30 days of termination of service. Any outstanding balance, including the actual replacement cost of any equipment not returned by the subscriber, may be deducted from the deposit. The refund shall be mailed to the subscriber at no expense to the subscriber, or shall be tendered as otherwise agreed to by the subscriber. (Ord. 277 § 3, 2002)

5.22.255 Parental control lock.

The cable operator shall provide subscribers, upon request, with a parental locking device or digital code that permits inhibiting the video portions of premium channels. The cable operator may charge a reasonable rate for such a device. (Ord. 277 § 3, 2002)

5.22.256 Privacy.

A. The cable operator shall not sell, trade, broker, give access to or otherwise release to any person, without prior specific written authorization from each individual subscriber, any list which identifies individual subscriber viewing habits or subscription or channel or channels viewed or any list which contains the name, address and/or telephone numbers of individual subscribers. Such written authorization from each subscriber shall be solicited on a separate preprinted form written in plain English and plain Spanish clearly explaining the extent and nature of the information which the cable operator wishes to release, and how to revoke such authorization once granted. Such written authorization form shall be prepared in multiple copies, and the cable operator shall leave with the subscriber a true and complete and fully executed copy of the written authorization at the time signed by the subscriber. Any such written authorization is freely revocable by the individual subscriber upon written notice tendered by the affected subscriber to the cable operator, and the cable operator shall within five business days after receipt of a written revocation remove all of the individually identifiable subscriber information from any lists or records it subsequently distributes to any person.

B. The cable operator shall not place in a residence any equipment capable of being used by the cable operator for audio eavesdropping or video surveillance. In addition, the cable operator shall not activate any two-way communications capability of the system in a subscriber’s residence, or use the system to gather information about the individual subscriber viewing habits, without the subscriber’s informed written or electronic consent. Notwithstanding the above, the cable operator shall have the right to use the system to (1) obtain information necessary to render cable service or any other service provided by the cable operator to the subscriber, (2) verify receipt of cable service for billing purposes or (3) detect unauthorized reception. (Ord. 277 § 3, 2002)

5.22.257 Landlord – Tenant.

A. Neither the owner of any residential dwelling nor his agent or representative shall ask or demand any payment, service or gratuity in any form as a condition for permitting the installation of cable service to the dwelling unit occupied by a tenant or resident requesting service.

B. Neither the owner of any residential dwelling nor his agent or representative shall penalize, or charge or surcharge a tenant or resident or forfeit or threaten to forfeit any right of such tenant or resident, or discriminate in any way against such tenant or resident who requests or receives cable service from a cable operator operating under a valid and existing cable franchise issued by the city.

C. No person shall resell, without the express written consent of the cable operator and without a franchise from the city, where required, any cable service, program or signal transmitted by a cable operator operating under a franchise issued by the city. However, the owner of a multiple dwelling unit, under the auspices of a bulk cable service agreement with the cable operator, may charge tenants for cable service, so long as such charges do not exceed the charges made by the cable operator to the owner, plus a reasonable sum to reimburse the owner for necessary administration and billing.

D. Nothing in this section shall prohibit a person from requiring that cable system facilities conform to laws and regulations and reasonable conditions necessary to protect safety, functioning appearance and value of premises or the convenience and safety of persons or property.

E. Nothing in this section shall prohibit a person from requiring a cable operator to agree to indemnify the owner, or his agents or representatives, for damages or from liability for damages caused by the installation, operation, maintenance or removal of cable system facilities. (Ord. 277 § 3, 2002)

5.22.258 Unauthorized connections and tampering.

No person, firm or corporation shall make any unauthorized connection, whether physically, electrically, acoustically, inductively or otherwise, with any part of a franchised cable system for the purpose of taking or receiving television signals, radio signals, pictures, programs, or sound; also, no person, without the consent of the owner, shall tamper with or remove or injure any cables, wires or equipment used for distribution of television signals, radio signals, pictures, programs or sound. (Ord. 277 § 3, 2002)

Division IV. Construction and Technical Standards

5.22.261 Construction requirements.

All construction (including, but not limited to, the initial construction of the cable system and any rebuild, expansion, replacement, repair or maintenance of all or any part of the cable system) shall be performed in compliance with this article and all other provisions of this code. At least 90 days prior to initiating any major construction (other than routine maintenance or repair, installation of subscriber drops or minor line extensions), a cable operator shall submit a construction plan to the city. The construction plan shall include a description of the work, equipment specification, existing and proposed locations of all facilities, traffic control plans, resident and business notification plans and a detailed construction schedule. The city may approve, conditionally approve or deny the construction plan. The city may require the posting of construction bonds. Additional construction requirements may be specified in a franchise agreement. (Ord. 277 § 3, 2002)

5.22.262 Standards.

A cable operator shall construct, install, operate and maintain its system consistent with all of the following:

A. All ordinances and construction standards of the city.

B. All applicable construction standards of the state of California, without limitation, including California Public Utilities Commission General Order 95 and General Order 128.

C. National Electrical Code as adopted by the city, or if not adopted by the city, as adopted by the state of California as the California Electrical Code, or if not adopted by the state of California, the most current edition of the National Electrical Code as released by the National Fire Protection Association.

D. Rules, regulations and orders of the Federal Communications Commission.

E. All other applicable federal, state and local laws and rules.

A cable operator shall construct, install and maintain its cable system in an orderly and professional manner, using due diligence and materials of good and durable quality. All such work shall be performed in close coordination with other public and private utilities following accepted construction procedures and practices and working through existing committees and organizations. All cable and wires shall be installed, where possible, parallel with and in the same manner as electric and telephone lines on the same poles. Multiple cable configurations shall be arranged parallel and bundled with due respect for engineering considerations.

A cable operator shall, at its own cost and expense, install and maintain shielding, filtering and grounding at affected installations with the system to eliminate television interference encountered from overload by amateur radio and other licensed transmitters which are in compliance with FCC regulations, and shall promptly identify and remove harmful interference to FCC licensees generated by the cable system.

A cable operator shall maintain equipment capable of providing standby power to be engaged automatically in the event of a power failure for a minimum period of 24 hours at all headends serving the city, including without limitation all switching facilities, towers, electronics and heating, ventilation and air conditioning systems and equipment located at such headends and such switching facilities. The cable operator shall also maintain on its distribution system alternative power sources (battery back-up) so that both the subscriber and the institutional networks (if any) may be maintained in normal operation for at least two hours beyond the time when normal commercial power sources serving the cable system have ceased.

If the city reasonably believes that the cable system is not in technical compliance with the foregoing standards, the city may require the cable operator to conduct its own technical testing of the system, and the cable operator shall disclose the results of such tests to the city upon their completion. Any deficiencies shall be cured by the cable operator promptly and no later than 30 days following completion of testing. The city shall also have the right to observe any system performance tests conducted by the cable operator and to obtain copies of the results of such tests.

A cable operator shall comply with all of the same standards and codes, including but not limited to the payment of inspection fees, to construct and maintain its system within private rights-of-way as are required by the city’s public streets. (Ord. 277 § 3, 2002)

Division V. Administration and Enforcement

5.22.266 Franchise fees.

All cable operators shall pay a franchise fee to the city based on the cable operator’s gross revenues in an amount equal to the maximum amount permitted under law unless the city council shall by majority vote elect to receive a lesser franchise fee. For reference purposes only, and without creating any limitation, at the time of adoption of this chapter, the maximum amount permitted under law is five percent of the cable operator’s gross revenues. The cable operator shall make franchise fee payments on the first day of each quarter year, or at such other times specified in the franchise agreement. Franchise fee payments shall be submitted together with documentation of the cable operator’s gross revenues in such form as may be required by the city from time to time. (Ord. 277 § 3, 2002)

5.22.267 Compensation relating to noncable telecommunications services.

All cable operators shall pay compensation to the city for use of public property in percentage equal to the franchise fee determined in HMC 5.22.266 based on the cable operator’s gross noncable revenues. Payments shall be submitted to the city on the first day of each quarter of each calendar year together with documentation of the cable operator’s gross noncable revenues in such form as may be required by the city from time to time. (Ord. 277 § 3, 2002)

5.22.268 Fees on noncable operator revenues.

In consideration of the use of public property, any person other than a cable operator who provides cable service or any other telecommunications service over a cable system for which charges are assessed to subscribers but which are not received by a cable operator shall pay a fee to the city in an amount equal to the percentage equal to the franchise fee determined in HMC 5.22.266, based on that person’s gross revenues and gross noncable revenues. The cable operator whose cable system is used by such person shall collect the foregoing fee from such person no later than the tenth day prior to the close of each calendar quarter and shall remit the fee to the city no later than the first day of the following calendar quarter. If the cable operator fails to collect or remit all or part of this fee, the cable operator shall be directly liable to the city for payment of the uncollected or unremitted fee. (Ord. 277 § 3, 2002)

5.22.269 Audit.

Consistent with HMC 5.22.271, the city shall have the right to inspect and audit all of the cable operator’s books and records and those of its affiliates relevant to an accurate determination of the total amount of the cable operator’s gross revenues and gross noncable revenues. The cable operator shall make such records available to the city within 14 days of the city’s request. Such records shall be available for inspection by the city at the cable operator’s office within the city during normal business hours. Such records shall be retained by the cable operator for a period of at least five years. The city will bear the cost of any such audit; provided, however, that if such audit indicates a franchise fee underpayment of three percent or more of the amount due, the cable operator shall reimburse the city for all reasonable costs relating to the audit. Any additional amount due to the city as a result of the audit shall be paid within 30 days following written notice to the cable operator, which notice shall include a copy of the audit report. If the cable operator believes the audit report is in error, it may send a written response to the city describing the error in lieu of making the payment. If the city disagrees with the response, it shall notify the cable operator in writing, after which the cable operator shall pay the additional amount due within 30 days. The city may elect to perform such audit jointly with one or more other government agencies which regulate affiliated systems. (Ord. 277 § 3, 2002)

5.22.270 Late payments.

In the event that the cable operator does not make any of the payments required by this code on or before the date due, a late payment penalty shall accrue at a rate of one and one-half percent per month on the unpaid amount until paid. (Ord. 277 § 3, 2002)

5.22.271 Inspection of records.

The cable operator shall maintain at its local office within the city, and shall make available for inspection and auditing at that office within seven days after receipt of a written request by the city, complete and accurate books, records, maps, plans and other materials of the cable operator which are reasonably related to the city’s review of the cable operator’s compliance with this code and the franchise agreement. To the extent that an affiliate of the cable operator aggregates information relating to the cable system together with information about other cable systems, the cable operator shall have copies of such records available for inspection and auditing at the local office within seven days after receipt of a written request by the city. The city shall maintain the confidentiality of any of the foregoing records to the extent that they are not public, contain sensitive business information, and confidentiality is permitted by law. (Ord. 277 § 3, 2002)

5.22.272 Location of cable operator’s properties.

A. The cable operator shall at all times make and keep on file in the office of the public works director current, full and complete plans and records to a scale and form approved by the public works director, showing the exact location of all cable system equipment installed or in use in streets, alleys and public places in the city.

B. The cable operator shall file with the public works director, on or before the last day of March of each year, a current map or set of maps drawn to a scale designated by the public works director showing all cable system equipment installed in streets, alleys and public places of the city during the previous year.

C. If the cable operator keeps such plans, records, and maps required hereunder in electronic format, such as without limitation exportable drafting document format, the city may require that such plans records and maps be tendered to the city in suitable electronic format and on such common media employed by the city. (Ord. 277 § 3, 2002)

5.22.273 Insurance.

The cable operator shall at all times during the existence of any franchise issued hereunder maintain in full force and effect at its own cost and expense the following policies of insurance:

A. A general comprehensive liability insurance policy with minimum liability limits of $2,000,000 combined single limit per occurrence for bodily injury, personal injury and property damage;

B. An automobile liability policy with minimum liability limits of $2,000,000 combined single limit per accident for bodily injury and property damage; and

C. Workers’ compensation insurance with minimum policy limits as required by state law.

All of the foregoing policies (except workers’ compensation insurance) shall name the city, its officers, officials, agents, employees and volunteers as insureds, and shall be primary to any insurance maintained by the city. The precise terms of these policies, including but not limited to liability limits, deductibles, acceptable insurers and other terms, shall be specified in the franchise agreement. (Ord. 277 § 3, 2002)

5.22.274 Indemnification.

The cable operator shall indemnify, defend and hold harmless the city and its officers, officials, employees, agents and volunteers from and against any and all liability, loss, damage, expense, costs (including without limitation costs and fees of litigation) of every nature arising out of or in connection with the cable operator’s enjoyment of the franchise hereunder, or its failure to comply with any of its obligations contained in the franchise agreement or this title, or arising out of the construction, installation, maintenance, operation or removal of its cable system, except such loss or damage which was caused by the sole negligence or willful misconduct of the city. (Ord. 277 § 3, 2002)

5.22.275 Letter of credit.

Within 30 days after the effective date of a franchise agreement, the cable operator shall deposit with the city an irrevocable letter of credit in the amount set forth in the franchise agreement in a form and with an institution approved by the city. The letter of credit may be drawn upon by the city for the purpose of remedying any noncompliance by the cable operator with any provision of this code or the franchise agreement. (Ord. 277 § 3, 2002)

5.22.276 Possessory interest.

The granting of a franchise pursuant to this title may create an interest subject to property taxation pursuant to California Revenue and Taxation Code Section 107 et seq. The cable operator shall be solely responsible for payment of any such taxes. (Ord. 277 § 3, 2002)

Division VI. Enforcement of Federal Rate Regulations

5.22.281 Effectiveness.

This chapter shall be effective only if the city has been certified by the Federal Communications Commission (“FCC”) to enforce federal rate regulations. (Ord. 277 § 3, 2002)

5.22.282 Rate increases.

Prior to increasing rates for basic service and/or associated equipment at any time, the cable operator shall file its proposed rates with the city clerk together with the form for determination of rate increases as may be issued by the FCC or the city, and any other information required by the city manager. If the proposed rates are greater than the benchmark rates permitted by FCC regulations, the cable operator shall submit a cost-of-service showing pursuant to FCC regulations. Within seven days of filing its proposed rates, but no later than 30 days prior to the effective date of the proposed rates, the cable operator shall notify its subscribers of its proposed rates and that written comments may be submitted to the city clerk by mailing such notice to all subscribers, either separately or in conjunction with bills or other notices sent to subscribers. (Ord. 277 § 3, 2002)

5.22.283 Auditor’s opinion.

All forms and materials submitted by the cable operator pursuant to this chapter shall be submitted together with an unqualified opinion of a certified public accountant (“auditor’s opinion”). The auditor’s opinion shall contain, at a minimum, the following items:

A. A certification that the data submitted by the cable operator truly and accurately reflect the actual costs of regulated equipment and services and other costs reported therein as determined by the auditor in accordance with generally accepted auditing standards, including without limitation, AU Section 801 et seq. of the AICPA Professional Standards and any successor sections, and that the financial information contained therein is reported in compliance with FCC rules and regulations implementing the Cable Act of 1992, including, without limitation, 47 CFR Sections 76.924 and 76.925 and any successor sections;

B. A detailed explanation of the source data examined, tested and utilized by the auditor in formulating the auditor’s opinion;

C. A list of documents furnished by the cable operator to the auditor and utilized by the auditor in formulating the auditor’s opinion;

D. A detailed explanation of the auditing methodology utilized by the auditor in formulating the auditor’s opinion; and

E. A detailed explanation of the assumptions utilized by the auditor in formulating the auditor’s opinion.

Upon the request of the city manager, the auditor shall provide to the city manager a copy of the audit working papers utilized in formulating the auditor’s opinion within five days of such request. These working papers shall be kept confidential to the extent required by federal law and FCC regulations.

This section shall not in any way affect the city’s authority to review records of the cable operator pursuant to HMC 5.22.271, or any other law, ordinance or agreement. (Ord. 277 § 3, 2002)

5.22.284 Time for action.

A. Quarterly Rate Adjustments. If the cable operator submits its proposed rates pursuant to the quarterly rate adjustment system authorized by the FCC, the provisions of this subsection shall apply. The proposed rates shall take effect 30 days after submission of all required information to the city unless the city disapproves the rate or the city manager issues an order extending the 30-day period as follows. The city manager may issue a written order extending this 30-day period for the purpose of requesting or considering additional information or comments for: (1) an additional 90 days in cases not involving cost-of-service showings if the city council and city manager are unable to make a determination within the 30-day period; or (2) an additional 150 days in cases involving cost-of-service showings. The proposed rates shall take effect following such extension unless the cable operator has not submitted all required information or unless the city disapproves the proposed rate. Prior to expiration of such extended period, the city manager may issue a brief written order directing the cable operator to keep an accurate account of all amounts received by reason of the proposed rate and on whose behalf such amounts were paid. At any time following expiration of such extended period, the city may disapprove the proposed rate and, if the foregoing accounting order was issued, may order the cable operator to refund all amounts previously collected as a result of the disapproved rate. To the extent provided by federal law, a cable operator utilizing the quarterly rate adjustment system may increase its rates for basic service to reflect increases in franchise fees or FCC regulatory fees without complying with this subsection.

B. Annual Rate Adjustments. If the cable operator submits its proposed rates pursuant to the annual rate adjustment system authorized by the FCC, the provision of this subsection shall apply. The cable operator shall submit its proposed rates no later than 90 days prior to the proposed effective date of the rates. Within 45 days of submission, the city may notify the cable operator that its submission is factually incomplete, in which case the review period shall be tolled until such time as the city receives all required information. If prior to a determination by the city there is a material change in the cable operator’s circumstances which affects the rate filing, the cable operator may file an amendment. The proposed rates shall take effect the later of 90 days after submission of all required information to the city or 30 days after receipt of any amendment unless the city disapproves the rate. If the city takes no action during this period, during the subsequent 12-month period the city may nevertheless issue a written decision disapproving the proposed rates and order a refund and a prospective rate reduction. During this 12-month period, if the cable operator makes a written inquiry concerning whether the city intends to issue a rate order, the city shall notify the cable operator of its intent within 15 days of receipt of the inquiry.

C. Required Channel Additions to Basic Service Tier. If the cable operator is required by federal or local law to add channels to the basic services tier and submits a proposed rate adjustment as a result, the proposed rates shall take effect 60 days after receipt of a complete application unless the city rejects the proposed rate as unreasonable.

D. New Equipment. If the cable operator submits a proposed rate for a new type of equipment, the proposed rate shall take effect 60 days after receipt of a complete application unless the city rejects the proposed rate as unreasonable. If the cable operator’s most recent rate filing was based on the system that enables them to file up to once per quarter, the city may order refunds and prospective rate reductions following the expiration of the 60-day period; provided, that it issues an accounting order prior to the expiration of that period. If the cable operator’s most recent rate filing was based on the annual rate system, the city may order refunds and prospective rate reductions following the expiration of the 60-day period in accordance with FCC regulations. (Ord. 277 § 3, 2002)

5.22.285 Determination by city manager.

In cases not involving cost-of-service showings, the city manager shall consider all written material submitted by the cable operator and the public and determine if the proposed rates are within the limits established by the FCC regulations. The cable operator shall have the burden of proof to establish that its proposed rates are within the limits established by the FCC regulations. The city manager may approve or disapprove the proposed rates, allow the proposed rates to take effect by operation of law by taking no action, or refer the matter to the city council for hearing. The city manager shall issue a written decision if he or she approves over opposition or disapproves the proposed rates in whole or in part. The city manager is not required to issue a written decision if he or she approves a proposed rate which has not been opposed by any person or if he or she takes no action, in which event the proposed rate shall take effect upon expiration of the time period prescribed in HMC 5.22.284. If the city manager determines that the rates are unreasonable and do not comply with FCC regulations, the city manager may prescribe reasonable rates as authorized by FCC regulations. If the city manager determines that the cable operator’s existing rates exceed the amounts permitted by FCC regulations, the city manager may order the cable operator to refund the amounts overcharged to its subscribers to the extent permitted by the FCC regulations within 90 days of the order. The city manager shall notify the city council of any determination made concerning proposed rates. The determination of the city manager shall be final. Notwithstanding the foregoing, within 10 days after the determination by the city manager or at the next regularly scheduled city council meeting, whichever is later, any member of the city council may call up the proposed rates for consideration by the city council in accordance with HMC 5.22.286. The proposed rates shall not take effect until the expiration of this period or, if called up by a councilmember, pending determination by the city council. (Ord. 277 § 3, 2002)

5.22.286 Determination by city council.

In cases involving a cost-of-service showing and in cases which are called up by a councilmember in accordance with HMC 5.22.285, a hearing on the proposed rates shall be scheduled before the city council upon submission of all required materials. The cable operator shall have the burden of proof to establish that its proposed rates are within the limits established by the FCC regulations. The city council shall issue a written decision if it approves over opposition or disapproves the proposed rates in whole or in part. The city council is not required to issue a written decision if it approves a proposed rate which has not been opposed by any person or if it takes no action, in which event the proposed rate shall take effect upon expiration of the time period prescribed in HMC 5.22.284. If the city council determines that the rates are unreasonable and do not comply with FCC regulations, the city council may prescribe reasonable rates as authorized by FCC regulations. If the city council determines that the cable operator’s existing rates exceed the amounts permitted by FCC regulations, the city council may order the cable operator to refund the amounts overcharged to its subscribers to the extent permitted by the FCC regulations within 90 days of such order. (Ord. 277 § 3, 2002)

5.22.287 Appeals.

The cable operator or any interested person may appeal any decision of the city council or the city manager relating to compliance with federal rate standards to the FCC in accordance with FCC regulations. (Ord. 277 § 3, 2002)

5.22.288 Complaints concerning premium service rates.

Upon receipt of more than one subscriber complaint made within 90 days after the effective date of an increased rate, the city manager is authorized to file a complaint with the FCC challenging the reasonableness of the cable operator’s rate for cable programming service, or the reasonableness of the cable operator’s charges for installation or rental of equipment used for the receipt of cable programming service. However, the city manager shall not file a complaint with respect to cable programming services after March 31, 1999, unless the city is authorized to do so by federal law or regulation. (Ord. 277 § 3, 2002)

Division VII. State Video Franchises

5.22.290 Special provisions applicable to holders of state video franchises.

A. Fee for Support of Local Cable Usage. A fee paid to the city is hereby established for the support of public, educational, and governmental access facilities and activities within the local franchise service area. Unless a higher percentage is authorized by applicable state or federal law, this fee shall be one percent of a state video holder’s gross revenue, as defined in California Public Utilities Code Section 5860.

B. Franchise Fee. A state video franchise holder operating in the city shall pay to the city a franchise fee that is equal to five percent of the gross revenues of that state video franchise holder. The term “gross revenues” shall be defined as set forth in Public Utilities Code Section 5860.

C. Audit Authority. Not more than once annually, the city may examine and perform an audit of the business records of a holder of a state video franchise to ensure compliance with all applicable statutes and regulations related to the computation and payment of franchise fees.

D. Customer Service Penalties under State Video Franchises.

1. The holder of a state video franchise shall comply with all applicable state and federal customer service and protection standards pertaining to the provision of video service.

2. The city shall monitor a state video franchise holder’s compliance with state and federal customer service and protection standards. The city will provide to the state video franchise holder written notice of any material breaches of applicable customer service and protection standards and will allow the state video franchise holder 30 days from receipt of the notice to remedy the specified material breach. Material breaches not remedied within this 30-day time period will be subject to the following monetary penalties to be imposed by the city in accordance with state law:

a. For the first occurrence of a violation, a monetary penalty of $500.00 shall be imposed for each day the violation remains in effect, not to exceed $1,500 for each violation.

b. For a second violation of the same nature within 12 months, a monetary penalty of $1,000 shall be imposed for each day the violation remains in effect, not to exceed $3,000 for each violation.

c. For a third or further violation of the same nature within 12 months, a monetary penalty of $2,500 shall be imposed for each day the violation remains in effect, not to exceed $7,500 for each violation.

3. A state video franchise holder may appeal a monetary penalty within 60 days after it is assessed by the city. After relevant evidence and testimony is received, and staff reports are submitted, the city council will vote to either uphold or vacate the monetary penalty. The city council’s decision on the imposition of a monetary penalty shall be final.

E. City Response to State Video Franchise Applications.

1. Applicants for state video franchises within the boundaries of the city must concurrently provide to the city complete copies of any application or amendments to applications filed with the California Public Utilities Commission. One complete copy must be provided to the city manager.

2. The city will provide any appropriate comments to the California Public Utilities Commission regarding an application or an amendment to an application for a state video franchise.

F. PEG Channel Capacity. A state video franchise holder that uses the public rights-of-way shall designate sufficient capacity on its network to enable the carriage of at least three public, educational, or governmental (PEG) access channels.

1. PEG access channels shall be for the exclusive use of the city or its designees to provide public, educational, or governmental programming.

2. Advertising, underwriting, or sponsorship recognition may be carried on the PEG access channels for the purpose of funding PEG-related activities.

3. The PEG access channels shall be carried on the basic service tier.

4. To the extent feasible, the PEG access channels shall not be separated numerically from other channels carried on the basic service tier, and the channel numbers for the PEG access channels shall be the same channel numbers used by the incumbent cable operator unless prohibited by federal law.

5. After the initial designation of PEG access channel numbers, the channel numbers shall not be changed without the prior written consent of the city, unless the change is required by federal law.

6. Each PEG access channel shall be capable of carrying a National Television System Committee (NTSC) television signal.

G. Interconnection. Where technically feasible, a state video franchise holder and incumbent cable operator shall negotiate in good faith to interconnect their networks for the purpose of providing PEG access channel programming. Interconnection may be accomplished by direct cable, microwave link, satellite, or other reasonable method of connection. State video franchise holders and incumbent cable operators shall provide interconnection of the PEG access channels on reasonable terms and conditions and may not withhold the interconnection. If a state video franchise holder and an incumbent cable operator cannot reach a mutually acceptable interconnection agreement, the city may require the incumbent cable operator to allow the state video franchise holder to interconnect its network with the incumbent’s network at a technically feasible point on the holder’s network as identified by the holder. If no technically feasible point for interconnection is available, the state video franchise holder shall make an interconnection available to the channel originator and shall provide the facilities necessary for the interconnection. The cost of any interconnection shall be borne by the state video franchise holder requesting the interconnection unless otherwise agreed to by the parties.

H. Emergency Alert System and Emergency Overrides. A state video franchise holder must comply with the emergency alert system requirements of the Federal Communications Commission in order that emergency messages may be distributed over the holder’s network. Provisions in city-issued franchises authorizing the city to provide local emergency notifications shall remain in effect and shall apply to all state video franchise holders in the city for the duration of the city-issued franchise, or until the term of the franchise would have expired had it not been terminated pursuant to subdivision (m) of Section 5840 of the California Public Utilities Code, or until January 1, 2009, whichever is later.

I. Encroachment Permit Applications and Appeal Procedures.

1. As used in this subsection (I), the term “encroachment permit” means any permit issued by the city relating to construction or operation of facilities in public rights-of-way by the holder of a state video franchise.

2. The city shall either approve or deny an application from a holder of a state video franchise for an encroachment permit within 60 days of receiving a completed application.

3. If the city denies an application for an encroachment permit, the city shall, at the time of notifying the applicant of the denial, furnish to the applicant written notice of the reason for the denial. An applicant may appeal the city’s denial of an encroachment permit application to the city council in accordance with the following procedures:

a. No notice of appeal will be processed unless filed within 10 days after service of written notice of the decision from which the appeal is taken; provided, that if written notice of the decision has not been served, the appellant may, within 10 days after being apprised of that decision, demand service of written notice and will have 10 days following that service in which to file the notice of appeal.

b. The notice of appeal must specify the specific decision from which the appeal is taken, the specific grounds for the appeal, and the relief or action requested from the city council.

c. The notice of appeal must be accompanied by such fee as may have been established by resolution of the city council.

d. Upon the timely filing of a notice of appeal in proper form, the city clerk will schedule the matter for hearing by the city council at a regular meeting but not later than 45 days after receipt of the notice of appeal. The city clerk will cause the notice of hearing to be given to the appellant not less than 10 days prior to the hearing unless that notice is waived in writing by the appellant. The city clerk will also cause a copy of the notice of appeal and the hearing to be transmitted to the city official or body whose decision is being appealed.

e. At the time of consideration of the appeal by the city council, the appellant will be limited to a presentation on the specific grounds of appeal and related matters set forth in its notice of appeal. The appellant will have the burden of persuading the city council that the decision appealed from should be reversed or modified.

f. The city council may continue the hearing on the appeal from time to time as may be deemed necessary. The city council may by resolution affirm, reverse, or modify, in whole or in part, the decision appealed from and may take any action that might have been taken in the first instance by the city official or body from whose decision the appeal has been taken.

g. The decision of the city council will be deemed final and conclusive upon adoption of the resolution. A copy of the resolution adopted by the city council will be served upon the appellant by placement in the United States mail, postage prepaid, to the appellant’s last known address. (Ord. 321 § 1, 2008)

Article III. Open Video Systems

5.22.300 Prerequisites to operating an open video system.

Prior to operating an open video system, an open video system operator shall elect to either obtain a cable television franchise pursuant to Article II or to comply with this Article III. No person or entity shall operate an open video system without first:

A. Submitting a written notice of its election;

B. Complying with Article I;

C. Providing the city with a copy of its Federal Communications Commission certification as an open video system; and

D. Completing negotiations with the city and otherwise complying with the public, educational and governmental access requirements contained in HMC 5.22.301.

If an open video system operator fails to comply with any federal, state or city requirement, it shall immediately cease operations until such compliance occurs. This Article III shall not be deemed to authorize an open video system operator to conduct any operations other than the provision of cable services. If an open video system operator provides other telecommunications services, those services shall comply with all applicable sections of this code. Constructing or operating an open video system shall not be deemed to give any open video system operator a vested right to continue to maintain such a system. In the event that federal law ever permits the city to require an open video system operator to obtain a franchise or license, all open video system operators shall immediately apply for such a franchise or license from the city. (Ord. 277 § 3, 2002)

5.22.301 Public, educational and governmental access.

Prior to operating an open video system, an open video system operator shall negotiate with the city concerning public, educational and governmental access channel capacity, services, facilities and equipment. These negotiations may include the local cable operator(s) if all parties so agree. If the city and the open video system operator are unable to reach agreement, the open video system operator must satisfy the same public, educational and government access obligations as the local cable operator(s) by connecting with the cable operator’s public, educational and governmental access channel feeds and by sharing the cable operator’s costs relating to such channels. The city council may adopt a resolution governing the use of such channels and the implementation of the connection of the open video system with the cable system. (Ord. 277 § 3, 2002)

5.22.302 Fees.

All open video system operators shall pay a fee to the city in an amount equal to five percent of the open video system operator’s gross revenues. The open video system operator shall make fee payments quarterly on the first day of each calendar quarter. Fee payments shall be submitted together with documentation of the open video system operator’s gross revenues in such form as may be required by the city from time to time. (Ord. 277 § 3, 2002)

5.22.303 Compensation relating to noncable telecommunications services.

All open video system operators shall pay compensation to the city for use of public property in an amount equal to five percent of the open video system operator’s gross noncable revenues. Payments shall be submitted to the city on the first day of each quarter of each calendar year together with documentation of the open video system operator’s gross noncable revenues in such form as may be required by the city from time to time. (Ord. 277 § 3, 2002)

5.22.304 Fees on non-open video system operator revenues.

In consideration of the use of public property, any person other than an open video system operator who provides cable service or any other telecommunications service over an open video system for which charges are assessed to subscribers but which are not received by an open video system operator shall pay a fee to the city in an amount equal to five percent of that person’s gross revenues and gross noncable revenues. The open video system operator whose open video system is used by such person shall collect the foregoing fee from such person no later than the tenth day prior to the close of each calendar quarter and shall remit the fee to the city no later than the first day of the following calendar quarter. If the open video system operator fails to collect or remit all or part of this fee, the cable operator shall be directly liable to the city for payment of the uncollected or unremitted fee. (Ord. 277 § 3, 2002)

5.22.305 Audit.

Consistent with HMC 5.22.271, the city shall have the right to inspect and audit all of the open video system operator’s books and records and those of its affiliates relevant to an accurate determination of the total amount of the open video system operator’s gross revenues and gross noncable revenues. The open video system operator shall make such records available to the city within 14 days of the city’s request. Such records shall be available for inspection by the city at the open video system operator’s office within the city during normal business hours. Such records shall be retained by the open video system operator for a period of at least three years. The city will bear the cost of any such audit; provided, however, that if such audit indicates a franchise fee underpayment of three percent or more of the amount due, the open video system operator shall reimburse the city for all reasonable costs relating to the audit. Any additional amount due to the city as a result of the audit shall be paid within 30 days following written notice to the open video system operator, which notice shall include a copy of the audit report. If the open video system operator believes the audit report is in error, it may send a written response to the city describing the error in lieu of making the payment. If the city disagrees with the response, it shall notify the open video system operator in writing, after which the open video system operator shall pay the additional amount due within 30 days. (Ord. 277 § 3, 2002)

5.22.306 Late payments.

In the event that the open video system operator does not make any payments required by this code on or before the date due, a late payment penalty shall accrue at a rate of one and one-half percent per month on the unpaid amount until paid. (Ord. 277 § 3, 2002)

Article IV. Telephone Companies

5.22.400 Telephone companies.

All telephone companies shall comply with all provisions of Article I. All telephone companies shall obtain a franchise from the city pursuant to Article II unless such companies are exempt from franchising requirements pursuant to state or federal law. A telephone company shall not be deemed exempt from the franchise requirement of Article II unless and until it provides documentation of such exemption to the satisfaction of the city. (Ord. 277 § 3, 2002)

Article V. Wireless Telecommunications System Operators

5.22.500 Wireless telecommunications system operators.

All wireless telecommunications system operators shall comply with all provisions of Article I. All wireless telecommunications system operators shall obtain a franchise from the city pursuant to Article II unless such companies are exempt from franchising requirements pursuant to state or federal law. A wireless telecommunications system operator shall not be deemed exempt from the franchise requirement of Article II unless and until it provides documentation of such exemption to the satisfaction of the city. (Ord. 277 § 3, 2002)

Article VI. Other Telecommunications System Operators

5.22.600 Other telecommunications system operators.

All telecommunications system operators shall comply with all provisions of Article I. All telecommunications system operators shall obtain a franchise from the city pursuant to Article II unless such companies are exempt from franchising requirements pursuant to state or federal law. A telecommunications system operator shall not be deemed exempt from the franchising requirement of Article II unless and until it provides documentation of such exemption to the satisfaction of the city. (Ord. 277 § 3, 2002)

Code reviser’s note: This chapter has been editorially renumbered to avoid duplication.

For provisions on wireless telecommunication facilities, see Chapter 16.45 HMC.