Chapter 11.04 SPECIAL RULES APPLICABLE TO CABLE TELEVISION SYSTEMS

C. “Cable Act” means the Cable Communications Policy Act of 1984, 47 U.S.C. Sections 521 et seq., as amended by the Cable Television Consumer Protection and Competition Act of 1992, as further amended by the Telecommunications Act of 1996, as further amended from time to time.

D. “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.

E. “Educational access” or “educational use” means any capacity on a cable system set aside by a franchise for use by accredited educational institutions.

F. “Equitable price” means fair market value adjusted downward for the harm to the city or subscribers, if any, resulting from a franchisee’s breach of its franchise or violation of this title and as further adjusted to account for other equitable factors that may be considered consistent with 47 U.S.C. Section 547.

G. “Fair market value” means the price for the cable system valued as a going concern but with no value allocated to the franchise itself.

H. “Governmental access channel” means any capacity on a cable system set aside by a franchisee for government use.

I. “Gross revenues” refers to gross revenues of any cable operator of a cable system in any way derived from the operation of that cable system to provide cable services in the franchise area. Gross revenues include, by way of illustration and not limitation, monthly fees charged subscribers for any basic, optional, premium, per-channel, or per-program service; installation, disconnection, reconnection, and change-in-service fees; leased channel fees; late fees and administrative fees; revenues received from programmers for carriage of programming on the cable system; revenues from rentals or sales of converters or other equipment; advertising revenues; revenues from program guides; and revenues from home shopping channels. This provision shall be read broadly to prevent the avoidance of franchise fees by a cable operator through arrangements with affiliates. Gross revenues shall not include any taxes on services furnished by a franchisee which are imposed directly on any subscriber or user by the state, city, or other governmental unit and which are collected by a franchisee on behalf of said governmental unit.

J. “Institutional network” or “I-net” means that part of a cable system’s facilities or capacity designed principally for use by nonresidential subscribers including communications to, from and among government agencies, schools, libraries and other public agencies; nothing in this definition however prevents an institutional network from being used to send communications to or receive communications from subscribers or the general public or prevents any authorized user from providing access to an institutional network to the public by remote terminals or otherwise, including by way of example, and not limitation, through connections between an institutional network and the subscriber network.

K. “Noncable service” means any service that is authorized to be distributed over the cable system, other than a cable service.

L. “Public access channel” means any capacity on a cable system set aside by a franchisee for use by the general public, including groups and individuals, and which is available for such use on a legally nondiscriminatory basis.

M. “Service tier” means a package of two or more cable services for which a separate charge is made by the franchisee, other than a package of premium and pay-per-view services that is not subject to rate regulation under the Cable Act and applicable FCC regulations because those services are also sold on a true a la carte basis.

N. “Subscriber” means the city, any government entity or any person who legally receives any cable service from a cable operator delivered over that cable operator’s cable system.

O. “User” means a person or the city utilizing a channel, capacity or equipment and facilities for purposes of producing or transmitting material, as contrasted with the receipt thereof in the capacity of a subscriber. (Ord. 1402 § 1(11.04.1), 2001)

11.04.020 No exclusivity.

A franchisee may not require a subscriber or a building owner or manager to enter into an exclusive contract as a condition of providing or continuing service. However, nothing herein prevents a franchisee from entering into an otherwise lawful, mutually desired exclusive arrangement with a building owner or manager of a multiple dwelling unit or commercial subscriber. (Ord. 1402 § 1(11.04.2), 2001)

11.04.030 Relation to 47 U.S.C. Sections 545 – 546.

This chapter shall be read and applied so that it is consistent with the Sections 625 and 626 of the Cable Act, 47 U.S.C. Sections 545 – 546 to the extent the city is required to comply with those Cable Act sections; provided, however, that nothing herein shall be read to incorporate those provisions into the city code, or prevent the city from challenging their applicability or to give any entity a right or a right of action or impose any obligation on the city which it would not otherwise have under such federal laws. (Ord. 1402 § 1(11.04.3), 2001)

Article II. Applications for Grant, Renewal or Modification of Franchise

11.04.040 Written application.

A written application shall be filed with the city for (A) grant of an initial franchise, (B) renewal of a franchise within the meaning of 47 U.S.C. Section 546(a) – (g), or (C) modification of a franchise pursuant to this title or a franchise. A request for renewal, pursuant to 47 U.S.C. Section 546(h), may also be filed informally, as provided in FMC 11.04.080. (Ord. 1402 § 1(11.04.4.1), 2001)

11.04.050 Contents of applications.

Except as expressly required by the city for good cause, a request for proposals for a cable franchise shall be deemed to require, and any application submitted pursuant to FMC 11.04.040 (and expressly not an informal renewal application submitted within the meaning of 47 U.S.C. Section 546(h)) shall contain, at a minimum, the following information:

A. Identity of the applicant, the persons who exercise working control over the applicant, and the persons who control those persons, to the ultimate parent.

B. Identification of the area of the city to be served by the proposed cable system, including a description of the proposed franchise area’s boundaries.

C. A detailed description of the physical facilities proposed, which shall include at least the following:

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

2. The location of proposed facility and facility design, including a description of the miles of plant to be installed, and a description of the size of equipment cabinets, shielding and electronics that will be installed along the plant route, the power sources that will be used and a description of the noise, exhaust and pollutants, if any, that will be generated by the operation of the same; provided, however, that, if some of the descriptive data is not available at the time of application, the franchise may issue subject to conditions that the data be filed and approved by the city before construction begins and that the franchise will be deemed to be forfeited if the data is not supplied and approved; provided, further, that the foregoing proviso does not authorize the grant of a franchise where there is not sufficient information to appraise the impact of the applicant’s proposal; provided further, in the event that subsections (C)(2) and (3) of this section require information that is a business or trade secret and/or proprietary information and the operation wishes to protect the information against disclosure, then operator shall provide said information to city in a separate envelope marked “Proprietary Information: DO NOT DISCLOSE.” The city will exercise good faith efforts to protect the confidentiality of the business or trade secrets or proprietary information that is designated as such; provided further, that (a) in the event a public disclosure request is made for information marked as proprietary, and if the city attorney determines that said information may be subject to being disclosed, or (b) the city determines that the information should be disclosed in connection with its enforcement of any provision of this title, or in the exercise of its police or regulatory powers, then the city shall notify the operator of the operator’s opportunity to seek a protective order from a court with appropriate jurisdiction. In the event that a protective order is not obtained within 30 days or, if shorter, the time limitation set forth in state law, then city may disclose said information. The operator is obligated to reimburse and indemnify city for all costs, damages and attorney fees that may be awarded or assessed by the court for any actions city took at the request of operator;

3. A map of the general route the facility will follow, a designation of the portions of the system that will be placed above ground and the portions that will be placed underground, and the construction techniques that the operator proposes to use in installing the system above ground and underground, a schedule for construction of the facility, describing when and where construction will begin, how it will proceed, and when it will be completed, and the expected effect on right-of-way usage, including information on the ability of the public rights-of-way to accommodate the proposed system, including, as appropriate given the system proposed, an estimate of the availability of space in conduits and an estimate of the cost of any necessary rearrangement of existing facilities; provided, however, that any proprietary information required under this subsection as well as the preceding subsection shall be subject to the nondisclosure procedure prescribed in the proviso of the preceding subsection;

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

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

E. A demonstration of the financial qualifications of the applicant, including at least the following:

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

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

3. Pro forma financial projections for the proposed franchise term, including a statement of projected income, and a schedule of planned capital additions, with all significant assumptions explained in notes or supporting schedules.

F. A demonstration of the applicant’s technical ability to construct and/or operate the proposed cable system.

G. A demonstration that the applicant is legally qualified, which proof must include a demonstration that the applicant:

1. Has received, or is in a position to receive, necessary authorizations from state and federal authorities;

2. Has not engaged in conduct (fraud, racketeering, violation of antitrust laws, consumer protection laws, or similar laws) that allows city to conclude the applicant cannot be relied upon to comply with requirements of franchise, or provisions of this title. An applicant may show that it would be inappropriate to deny it a franchise under this subsection, by virtue of: the particular circumstances surrounding the acts or omissions at issue; the steps taken by the applicant to cure all harms flowing therefrom and to prevent their recurrence; and the lack of involvement of the applicant’s principals, or the remoteness of the acts or omissions from the operation of communications systems;

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

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

H. Additional Information Regarding Affiliates. To the extent that the applicant is in any respect relying on the financial or technical resources of another person, including another affiliate, the proofs required by subsections E and F of this section should be provided for that person.

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

J. An affidavit or declaration of the applicant or authorized officer thereof certifying the truth and accuracy of the information in the application, and certifying that the application meets all requirements of applicable law. (Ord. 1402 § 1(11.04.4.2), 2001)

11.04.060 Procedure for applying for grant of a franchise, other than an application that is subject to 47 U.S.C. Section 546.

A. A person may apply for a franchise in response to a request for proposals (“RFP”) issued by the city. Any response to an RFP shall contain the information required by FMC 11.04.050, and such other information as the RFP may require, and must be submitted in accordance with the requirements in the RFP. A properly filed response to an RFP is subject to evaluation in accordance with subsection C of this section. The city may conduct such investigations from time to time as may be appropriate to establish RFP requirements.

B. Notwithstanding the provisions of subsection A of this section, a person may apply for an initial franchise by submitting an unsolicited application containing the information required in FMC 11.04.050 and requesting an evaluation of that application pursuant to subsection C of this section. Prior to evaluating that application, the city may conduct such investigations as are necessary to determine whether the application satisfies the standards set forth in subsection C of this section, including by commencing a proceeding to identify the future cable-related needs and interests of the community. It also may seek additional applications prior to evaluating the application. An applicant for an initial franchise shall be provided an opportunity to amend its application in light of the result of any investigation conducted by the city, prior to evaluation of that application pursuant to subsection C of this section.

C. In evaluating an application for a franchise, the city may consider the following factors:

1. The extent to which the applicant has substantially complied with the applicable law and the material terms of any existing cable franchise for the city;

2. Whether the quality of the applicant’s service under any existing franchise in the city, including signal quality, response to customer complaints, billing practices and the like has been reasonable in light of the needs and interests of the communities served;

3. Whether the applicant has the financial, technical, and legal qualifications to hold a cable franchise;

4. Whether the application satisfies requirements established by the city under this title or in an RFP or is otherwise reasonable to meet the future cable-related needs and interests of the community, taking into account the cost of meeting such needs and interests;

5. Whether, to the extent not considered as part of subsection (B)(4) of this section, the applicant will provide adequate public, educational, and governmental use capacity, facilities, or financial support thereof;

6. Whether issuance of a franchise is in the public interest considering the immediate and future effect on the public rights-of-way and private property that would be used by the cable system, including the extent to which installation or maintenance as planned would require replacement of property or involve disruption of property, public services, or use of the public rights-of-way; and the comparative superiority or inferiority of competing applications; and

7. Whether the approval of the application may eliminate or reduce competition in the delivery of cable service in the city.

D. If the city finds that it is in the public interest to issue a franchise considering the factors set forth above, the city may adopt a franchise ordinance setting forth the terms and conditions of the franchise, which franchise shall become effective upon satisfaction of conditions precedent to effectiveness, and when signed and accepted by the applicant. If the city denies a franchise, it will cause a written explanation of the denial to issue, which may be in any appropriate form. Without limiting its authority to deny an application for a franchise, the city specifically reserves the rights to reject any application that is incomplete or fails to respond to an RFP. Nothing in this title shall be construed in any way to limit the discretion and legislative authority of the city council in making decisions relative to the granting, denial, or renewal of a franchise. (Ord. 1402 § 1(11.04.4.3), 2001)

11.04.070 Procedure for applying for grant of a Cable Act renewal franchise.

A. To the extent required by federal law, requests for cable franchise renewal under the Cable Act will be received and reviewed in a manner consistent with Section 626 of the Cable Act, 47 U.S.C. Section 546. It is the proposal submitted by a franchisee under 47 U.S.C. Section 546(b), and not the request for commencement of the renewal proceedings submitted under 47 U.S.C. Section 546(a), that must contain the information required under FMC 11.04.050.

B. If neither a franchisee nor the city activates in a timely manner, or can activate the renewal process set forth in 47 U.S.C. Section 546(a) – (g) (including, for example, if the provisions are repealed), and except as to applications submitted pursuant to 47 U.S.C. Section 546(h), the provisions of FMC 11.04.060 shall apply and a renewal request shall be evaluated using the same criteria as any other request for a franchise.

C. The city may by resolution adopt procedures for conducting any proceedings required under federal law, including, without limitation, procedures for presentation of evidence, and may also by resolution specify the person or entity that will conduct any administrative hearing that may be required by federal law, should the city council decide that it does not wish to conduct the proceeding itself. In any case, however, the final decision to deny or grant renewal shall remain with the city council. (Ord. 1402 § 1(11.04.4.4), 2001)

11.04.080 Informal applications for renewal.

Notwithstanding the above, a cable operator may submit a proposal for renewal of a franchise pursuant to 47 U.S.C. Section 546(h). Such a proposal may be submitted at any time and the city may, after affording the public adequate notice and opportunity for comment, grant or deny such proposal at any time (including after proceedings have been commenced in accordance with 47 U.S.C. Section 546(a)). An application may be denied for any reason. (Ord. 1402 § 1(11.04.4.5), 2001)

11.04.090 Application for modification of a franchise.

A. An application for modification of a franchise shall include, at minimum, the following information:

1. The specific modification requested;

2. The justification for the requested modification, including the impact of the requested modification on subscribers and others, and the financial impact on the applicant if the modification is approved or disapproved, demonstrated through, among other things, submission of pro forma financial statements;

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

4. Any other information that the applicant believes is necessary for the city to make an informed determination on the application for modification; and

5. An affidavit or declaration of the applicant or applicant’s authorized officer certifying the truth and accuracy of the information in the application, and certifying that the application is consistent with the requirements of applicable law.

B. A request for modification submitted pursuant to 47 U.S.C. Section 545 shall be considered in accordance with the requirements of that section. (Ord. 1402 § 1(11.04.4.6), 2001)

11.04.100 Public hearings.

An applicant shall be notified of any public hearings held in connection with the evaluation of its application and shall be given a reasonable opportunity to be heard. In addition, prior to the issuance of a franchise, the city shall provide for the holding of a public hearing within the proposed franchise area, following notice to the public, at which each applicant and its application shall be examined and the public and all interested parties afforded a reasonable opportunity to be heard. (Ord. 1402 § 1(11.04.4.7), 2001)

Article III. Construction Provisions

11.04.110 System construction schedule.

Every franchise shall specify the construction schedule that will apply to any required construction, upgrade, or rebuild of the cable system. The schedule shall provide for prompt completion of the project, considering the amount and type of construction required. (Ord. 1402 § 1(11.04.5.1), 2001)

11.04.120 Use of cable operator’s facilities.

The city shall have the right to install and maintain, free of charge upon any poles or in any conduit owned by a cable operator in the city, any wire and pole fixtures that do not unreasonably interfere with the cable system operations of the franchisee; provided, that if a franchisee is authorized to erect poles or place conduit, and the city uses a franchisee’s conduit or poles to install a cable system that competes with that franchisee in the provision of cable service to residential subscribers, the franchise may provide that the franchisee may charge the city a fair market rate pursuant to that franchise for the use of the poles or conduit to provide residential cable service. Each cable operator shall notify the city when it enters into an agreement for use of its poles and conduits in the city. Copies of agreements for use of cable operator’s conduits or poles in the public rights-of-way or on other public property shall be available for review upon the city’s request. (Ord. 1402 § 1(11.04.5.2), 2001)

11.04.130 Provision of service – Quality of service.

In addition to satisfying such requirements as may be established in a franchise, every cable operator shall operate its cable system subject to the following conditions, except as prohibited by federal law:

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

B. Except as a franchise otherwise provides, a cable operator must extend service to any person or to any government building which requests it in the city or (if smaller) its franchise area within (1) seven days of the request, where service can be provided by activating or installing a drop, (2) 90 days of the request, where an extension of less than one-half mile is required, or (3) six months, where an extension of one-half mile or more is required; provided, that in cases where a franchise permits a franchisee to require a potential subscriber to bear a share of extension or installation costs, and franchisee requires the potential subscriber to bear such costs, the time for extension shall be measured from the date the subscriber agrees to bear such costs or, if a franchisee requires prepayment of all or a portion of the estimated costs, from the date the prepayment is made. A franchisee that requires a potential subscriber to bear a portion of installation or extension costs must prepare a written estimate of extension costs within seven days of a request for an installation or extension that would be subject to cost-sharing.

C. A cable system within the city shall meet or exceed the technical standards set forth in 47 CFR Section 76.601 and any other applicable technical standards.

D. A cable operator shall perform all tests necessary to demonstrate compliance with the requirements of its franchise and other technical and performance standards established by applicable law. Unless a franchise or applicable law provides otherwise, all tests shall be conducted in accordance with federal rules and in accordance with the most recent edition of National Cable Television Association’s “Recommended Practices for Measurements on Cable Television Systems,” or such other manual as may be directed under FCC regulations. A written report of any test results shall be filed with the city within seven days of a request by the city. If a location fails to meet technical or performance specifications, the operator, without requirement of additional notice or request from city, shall promptly take corrective action, and retest the locations.

E. Upon request of the city, every cable operator shall be required to interconnect with every other cable system and cable operator within the city on fair and reasonable terms for purposes of providing PEG and I-net services. (Ord. 1402 § 1(11.04.5.3), 2001)

11.04.140 System maintenance.

Scheduled maintenance shall be performed so as to minimize the effect of any necessary interruptions of cable service. (Ord. 1402 § 1(11.04.5.4), 2001)

11.04.150 Continuity of service.

Each franchisee shall, during the term of the franchise, ensure that subscribers are able to receive continuous service. In the event the franchise is revoked or terminated, the franchisee may be required to continue to provide service for a reasonable period to assure an orderly transition of service from the franchisee to another entity. A franchise may establish more particular requirements under which these obligations will be satisfied. (Ord. 1402 § 1(11.04.5.5), 2001)

Article IV. Operation and Reporting Provisions

11.04.160 Communication with regulatory agencies.

If requested by the city, a cable operator shall file with the city all reports required by the FCC including, without limitation, any proof of performance tests and results, Equal Employment Opportunity (“EEO”) reports, and all petitions, applications, and communications of all types directly related to the cable system, or a group of cable systems of which the cable operator’s cable system in the city is a part, submitted or received by the cable operator, an affiliate, or any other person on the behalf of the operator, either to or from the FCC, the Securities and Exchange Commission, or any other federal or state regulatory commission or agency having jurisdiction over any matter affecting operation of the cable system; provided, that nothing herein requires a franchisee to produce regulatory or court filings that are treated by the agency or court as confidential, such as Hart-Scott-Rodino Act filings. Nothing in this section affects any rights the city may have to obtain books and records under Chapter 11.01 FMC. (Ord. 1402 § 1(11.04.6.1), 2001)

11.04.170 Reports.

A. Within 45 days of the end of each calendar quarter, a cable operator shall submit a report to the city containing the following information:

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

2. The number and type of outages known by the operator for the prior quarter, identifying separately the following:

a. Each planned outage, the time it occurred, its duration, and the estimated area and number of subscribers affected;

b. Each known unplanned outage, the time it occurred, its estimated duration and the estimated area and the number of subscribers affected, and if known, the cause;

c. The total estimated hours of known outages as a percentage of total hours of cable system operation. An outage is a loss of sound or video on any signal, or a significant deterioration of any signal affecting two or more subscribers; and

B. No later than 90 days after the end of its fiscal year, a cable operator shall submit a written report that shall contain such information as may be required from time to time by the city, and at least the following, unless the city waives the requirement.

1. A summary of the previous year’s activities in the development of the cable system, including descriptions of services begun or discontinued, the number of subscribers gained or lost for each category of cable service;

2. A summary of complaints for which records are required under FMC 11.04.180(A), identifying both the number and nature of the complaints received and an explanation of their dispositions;

3. A fully audited or certified revenue report from the previous calendar year for the cable system;

4. An ownership report, indicating all persons who at the time of filing control or own an interest in the cable operator of 10 percent or more;

5. A list of officers and members of the board of directors of the franchisee and any affiliates directly involved in the operation or the maintenance of the cable system;

6. An organizational chart showing all corporations or partnerships with more than a 10 percent interest ownership in the cable operator, and the nature of that ownership interest (limited partner, general partner, preferred shareholder, etc.), and showing the same information for each corporation or partnership that holds such an interest in the corporations or partnerships so identified and so on until the ultimate corporate and partnership interests are identified;

7. An annual report of each entity identified in subsection (B)(6) of this section which issues an annual report;

8. A complete report on its plant. This plant report shall state the physical miles of plant construction and plant in operation during the prior calendar year categorized as aerial and underground, identify any cases where subscribers contributed to plant extension, provide revisions to the cable system maps filed with the city, and report the results of appropriate electronic measurements to show conformity with FCC technical standards;

9. A report showing, for each cable customer service standard in force, the cable operator’s performance with respect to that standard for each quarter of the preceding year. In each case where cable operator concludes it did not comply fully, the cable operator will describe the corrective actions it is taking to assure future compliance;

10. Once the information required by subsections (B)(4) through (6) of this section has been filed, it need be refiled only if it changes. (Ord. 1402 § 1(11.04.6.2), 2001)

11.04.180 Records required.

A cable operator shall at all times maintain:

A. Records of all complaints received with information sufficient to allow the operator to prepare the reports required in this article. The term “complaints” as used herein and throughout this title refers to complaints about any aspect of the cable system or franchisee’s operations, including, without limitation, complaints requiring service calls, and complaints about employee courtesy, billing, prices, programming, outages and signal quality;

B. Records of outages known to the cable operator, with information sufficient to allow a franchisee to prepare the reports required in this article;

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

D. Records of installation/reconnection and requests for service extension, indicating date of request, date of acknowledgment, and the date and time service was extended. (Ord. 1402 § 1(11.04.6.3), 2001)

Article V. Rate Regulation and Consumer Protection

11.04.190 Scope and applicability.

The city reserves all rights to implement and impose regulation of a cable operator’s rates and charges to the maximum extent permitted by law, and may do so by amendment to this title, by separate ordinance, by amendment to a franchise, or in any other lawful manner. (Ord. 1402 § 1(11.04.7.1), 2001)

11.04.200 Rate regulation procedures.

Rate regulation shall be performed in accordance with the rules and regulations of the FCC. The city manager may take any required steps to file complaints, toll rates, issue accounting orders or take any other steps required to comply with FCC regulations. The city council shall be responsible for issuing rate orders that establish rates or order refunds. No rate may be put into effect without the prior review and approval of the city, except as federal law may otherwise require or allow. (Ord. 1402 § 1(11.04.7.2), 2001)

11.04.210 Rate discrimination prohibited.

Except to the extent the city may not enforce such a requirement, a cable operator is prohibited from discriminating in its rates or charges or from granting undue preferences to any subscriber, potential subscriber, or group of subscribers or potential subscribers; provided, however, that a franchisee may offer temporary, bona fide promotional discounts in order to attract or maintain subscribers, so long as such discounts are offered on a nondiscriminatory basis to similar classes of subscribers throughout the franchise area, and a franchisee may offer discounts for the elderly or the disabled, and such other discounts as it is expressly entitled to provide under federal law, if such discounts are applied in a uniform and consistent manner. A cable operator shall comply at all times with all applicable federal, state, and city laws, and all executive and administrative orders relating to nondiscrimination. (Ord. 1402 § 1(11.04.7.3), 2001)

11.04.220 Redlining prohibited.

A cable system operator shall not deny access or charge different rates to any group of subscribers or potential subscribers because of the income of the residents of the local area in which such group resides. (Ord. 1402 § 1(11.04.7.4), 2001)

11.04.230 Cable customer service standards.

Each cable operator must satisfy cable customer service standards or consumer protection standards as may be set forth in its franchise. In addition, every franchise shall be deemed to include a requirement that the franchisee comply with such additional or stricter customer service standards or consumer protection laws as the city may establish from time to time by ordinance or resolution. (Ord. 1402 § 1(11.04.7.5), 2001)

11.04.240 Delegation of regulatory authority.

The city to the extent not prohibited by applicable law and as may be authorized from time to time by the city council may delegate to a regional authority such as the Rainier Communication Commission the authority to assist the city and to recommend and implement regulations pertaining to rate regulation and other matters pertaining to cable operators over which the city has regulatory authority. (Ord. 1402 § 1(11.04.7.6), 2001)

Article VI. Franchise Fee

11.04.250 Franchise fee.

A cable operator shall pay to the city a franchise fee in an amount equal to five percent of gross revenues, or such other amount as may be specified in the franchise; provided, however, that if the franchise specifies an amount, that amount shall be subject to increase should federal limits on fee payments be eliminated or changed and other cable operators are subject to a higher fee. (Ord. 1402 § 1(11.04.8), 2001)

Article VII. Transfers

11.04.260 City approval required.

No transfer shall occur without prior written notice to and approval of the city council. Transfer without the prior written approval of the city shall be considered to impair the city’s assurance of due performance. The granting of approval for a transfer in one instance shall not render unnecessary approval of any subsequent transfer. (Ord. 1402 § 1(11.04.9.1), 2001)

11.04.270 Application.

A. The franchisee shall promptly notify the city of any proposed transfer involving a cable system. If any transfer should take place without prior notice to the city, the franchisee will promptly notify the city that such a transfer has occurred.

B. At least 120 calendar days prior to the contemplated effective date of a transfer involving a cable system, the franchisee shall submit to the city an application for approval of the transfer. Such an application shall provide complete information on the proposed transaction, including details on the legal, financial, technical, and other qualifications of the transferee, and on the potential impact of the transfer on subscriber rates and service. At a minimum, the following information must be included in the application; provided, that a franchisee is not required to duplicate information that it submits to the city to comply with its obligations under federal or state law:

1. All information and forms required under federal law or the equivalent of such forms if no longer required by federal law;

2. All information required in FMC 11.04.050(A) and 11.04.050(E) through (J);

3. Any contracts or other documents that relate to the proposed transaction, and all documents, schedules, exhibits, or the like referred to therein;

4. Any shareholder reports or filings with the Securities and Exchange Commission (“SEC”) that discuss the transaction;

5. Other information necessary to provide a complete and accurate understanding of the financial position of the cable system before and after the proposed transfer;

6. Complete information regarding any potential impact of the transfer on subscriber rates and service;

7. A brief summary of the proposed transferee’s plans for at least the next five years regarding line extension, plant and equipment upgrades, channel capacity, expansion or elimination of services, and any other changes affecting or enhancing the performance of the cable system.

C. For the purposes of determining whether it shall consent to a transfer, the city or its agents may inquire into all qualifications of the prospective transferee and such other matters as the city may deem necessary to determine whether the transfer is in the public interest and should be approved, denied, or conditioned as provided under FMC 11.04.280. The franchisee and any prospective transferees shall assist the city in any such inquiry, and if they fail to do so, the request for transfer may be denied. (Ord. 1402 § 1(11.04.9.2), 2001)

11.04.280 Determination by city.

In making a determination as to whether to grant, deny, or grant subject to conditions an application for a transfer of a franchise under FMC 11.04.270, the city shall consider the legal, financial, and technical qualifications of the transferee to operate the cable system, any potential impact of the transfer on subscriber rates or services, whether the incumbent cable operator is in compliance with its franchise and this title and, if not, the proposed transferee’s commitment to cure such noncompliance, whether the transferee owns or controls any other cable system in the city, and whether operation by the transferee may eliminate or reduce competition in the delivery of cable service in the city, and whether operation by the transferee or approval of the transfer would adversely affect subscribers, the public, or the city’s interest under this title, the franchise, or other applicable law. (Ord. 1402 § 1(11.04.9.3), 2001)

11.04.290 Transferee’s agreement.

No application for a transfer of a franchise subject to this article shall be granted unless the transferee agrees in writing that it will abide by and accept all terms of this title and the franchise, and that it will assume the obligations, liabilities, and responsibility for all acts and omissions, known and unknown, of the previous franchisee under this title and the franchise for all purposes, including renewal, unless the city, in its sole discretion, expressly waives this requirement in whole or in part. (Ord. 1402 § 1(11.04.9.4), 2001)

11.04.300 Approval does not constitute waiver.

Approval by the city of a transfer of a franchise pursuant to this article does not constitute a waiver or release of any of the rights of the city under this title or a franchise, whether arising before or after the date of the transfer. (Ord. 1402 § 1(11.04.9.5), 2001)

11.04.310 Exception for intra-company transfers.

Notwithstanding the foregoing, a franchise may provide that transfers to affiliates of a franchisee shall be excepted from the requirements of FMC 11.04.260 and 11.04.270 where (1) the affiliate is wholly owned and managed by an entity that will guarantee the performance under a franchise, and (2) the transferee affiliate:

A. Notifies the city of the transfer at least 60 days before it occurs and, at that time provides the agreements and warranties required by this article, describes the nature of the transfer, and submits complete information describing who will have direct and indirect ownership and control of the cable system after the transfer;

B. Warrants that it has read, accepts and agrees to be bound by each and every term of the franchise and related amendment, regulations, ordinances, and resolutions then in effect;

C. Agrees to assume all responsibility for all liabilities, acts, and omissions known and unknown of its predecessor franchisees for all purposes, including renewal;

D. Agrees that the transfer shall not permit it take any position or exercise any right which could not have been exercised by its predecessor franchisees;

E. Warrants that the transfer will not substantially increase the financial burdens upon or substantially diminish the financial resources available to the franchisee (the warranty to be based on comparing the burdens upon and resources that will be available to the transferee compared to its predecessors), or otherwise adversely affect the ability of the franchisee to perform;

F. Warrants that the transfer will not in any way adversely affect the city or subscribers (including by increasing rates);

G. Notifies the city that the transfer is complete within five business days of the date the transfer is complete; and

H. Agrees that the transfer in no way affects any evaluation of its legal, financial or technical qualifications that may occur under the franchise or applicable law after the transfer, and does not directly or indirectly authorize any additional transfers. (Ord. 1402 § 1(11.04.9.6), 2001)

Article VIII. Connections to Cable System –
Use of Antennas

11.04.320 Subscriber right to attach.

To the extent consistent with federal law, subscribers shall have the right to attach VCRs, receivers, and other terminal equipment to a franchisee’s cable system. Subscribers also shall have the right to use their own remote control devices and converters, and other similar equipment. (Ord. 1402 § 1(11.04.10.1), 2001)

11.04.330 Removal of existing antennas.

A franchisee shall not, as a condition of providing service, require a subscriber or potential subscriber to remove any existing antenna, or disconnect an antenna except at the express direction of the subscriber or potential subscriber, or prohibit installation of a new antenna; provided, that such antenna is connected with an appropriate device and complies with applicable law. (Ord. 1402 § 1(11.04.10.2), 2001)

Article IX. Cable Service

11.04.340 Discrimination prohibited.

A. A cable system operator shall not discriminate among persons or the city or take any retaliatory action against a person or the city because of that entity’s exercise of any right it may have under federal, state, or local law, nor may the operator require a person or the city to waive such rights as a condition of taking service.

B. A cable system operator shall not refuse to employ, discharge from employment, or discriminate against any person in compensation or in terms, conditions, or privileges of employment because of race, color, creed, national origin, sex, age, disability, religion, ethnic background, or marital status. A cable system operator shall comply with all federal, state, and local laws and regulations governing equal employment opportunities, as the same may be from time to time amended. (Ord. 1402 § 1(11.04.11), 2001)

11.04.350 Liquidated damages.

A. Liquidated Damages. Because a cable franchisee’s failure to comply with the provisions of this title concerning cable service will result in injury to the city, and because it may be difficult to estimate the extent of each such injury, each cable franchise shall contain provisions for liquidated damages for the following violations, which provisions represent the best estimate of the damages resulting from injuries of specific types. The amounts of the liquidated damages set forth in this title are in 2000 dollars and shall be increased each year by the increase in the U.S. Department of Labor, Bureau of Labor Statistics, Consumer Price Index for Pacific Cities and U.S. City Average, Seattle, Urban Wage Earners and Clerical Workers Second Half Yearly Report. Unless a franchise provides otherwise, the amount of liquidated damages shall be:

1. For failure to substantially complete construction in accordance with the franchise: $1.00 per day for each affected subscriber for each day the violation continues;

2. For transferring the franchise without approval: $500.00 per day for each violation for each day the violation continues;

3. For failure to comply with requirements for public, educational and governmental use of the system: $500.00 per day for each violation for each day the violation continues;

4. For violation of customer service standards: $500.00 per violation; except that, for violations of applicable customer service standards for which the operator’s compliance is not measured in terms of its response to individual customers: $1,250 per month for any period during which it fails to meet applicable performance standards; and

5. For all other material violations of the franchise agreement for which actual damages may not be ascertainable: $500.00 per day for each violation for each day the violation continues.

B. Procedures Applicable to Liquidated Damages. Before it imposes liquidated damages:

1. The city shall provide the franchisee 30 days’ written notice and opportunity to fully cure the defect in performance, challenge the existence of the defect, or show that the defect in performance should be excused either temporarily or permanently; and

2. The city shall (at any time after the close of the 30-day period) hold a hearing at which the franchisee shall be provided an opportunity to be heard by the city council.

Provided, that the franchisee may waive the public hearing requirement, and if so, the city may impose liquidated damages without holding that hearing. The conclusion of the process provided for in subsections (B)(1) and (2) of this section satisfies the city’s obligation to provide notice before drawing upon the security fund. Written notice shall be provided by certified mail. (Ord. 1402 § 1(11.04.12.1, 11.04.12.2), 2001)

11.04.360 Revocation or termination of franchise.

A. In addition to all other rights of the city under a cable franchise, the city shall have the right to revoke the franchise: for the reasons specified in this title; for defrauding or attempting to defraud the city or subscribers, if the franchisee abandons the cable system, or willfully refuses to provide service to the city or any part of the city in accordance with its franchise; and as otherwise provided herein.

B. Failure to complete any system upgrade required by its franchise by the prescribed date so that at least 75 percent of all plant miles are rebuilt and are serving subscribers from the upgraded system will result in the automatic forfeiture of the franchise if (1) the city has provided the franchisee with notice that the upgrade must be completed, and (2) the upgrade is not completed within 90 days after the date on which the city provides notice so that at least 75 percent of all plant miles are rebuilt and are serving subscribers. (Ord. 1402 § 1(11.04.12.3), 2001)

11.04.370 Remedies cumulative.

All remedies under this title and franchises granted hereunder are cumulative unless otherwise expressly stated. The exercise of one remedy shall not foreclose use of another, nor shall the exercise of a remedy or the payment of liquidated damages or penalties relieve the franchisee of its obligations to comply with its franchise. Remedies may be used singly or in combination; in addition, the city may exercise any rights it has at law or equity; except that, the city is not entitled to recover damages for the same injury under two separate sections where doing so would result in a double recovery. (Ord. 1402 § 1(11.04.12.4), 2001)

11.04.380 Relation to insurance and indemnity requirements.

Recovery by the city of any amounts under insurance, the construction/performance bond, the letter of credit, or otherwise does not limit the franchisee’s duty to indemnify the city in any way, nor shall such recovery relieve the franchisee of its obligations under the franchise, limit the amounts owed to the city, or in any respect prevent the city from exercising any other right or remedy it may have. (Ord. 1402 § 1(11.04.12.5), 2001)