HomeMy WebLinkAboutItem 3a: Introduce Ordiance 2276 to Establish Franchise Fees, Public Access Support Fees and Customer Service Penalities for State Franchise HoldersDATE:
TO:
FROM:
Mayor and City Council
Don Penman, City Manager
By: Linda Garcia, Com nications, Marketing and Special
Projects Manager VI
SUBJECT: ORDINANCE NO. 2276 AMENDING UNCODIFIED ORDINANCE
NO. 2206 TO ESTABLISH FRANCHISE FEES, PUBLIC ACCESS
SUPPORT FEES AND CUSTOMER SERVICE PENALTIES FOR
STATE FRANCHISE HOLDERS PROVIDING VIDEO SERVICE
WITHIN THE CITY OF ARCADIA
Recommendation: Introduce
SUMMARY
Staff is requesting that the City Council introduce Ordinance No. 2276 establishing a
franchise fee and a public education fee for cable television operators, and setting forth
the penalties for violating State and Federal customer service standards as outlined and
authorized by the Digital Infrastructure and Video Competition Act of 2006 (DIVCA).
BACKGROUND
July 6, 2010
STAFF REPORT
The Digital Infrastructure and Video Competition Act of 2006 (DIVCA) allows video
service providers (cable television) to obtain a State issued franchise to provide video
services in local communities. DIVCA also establishes the California Public Utilities
Commission as the sole franchising authority for video service providers throughout the
State, although it delegates certain limited rights to local authorities. These rights need
to be established by local ordinance to be enforceable on State video franchise holders.
All three cable operators in the City of Arcadia hold a State franchise.
DISCUSSION
Office of the City Manager
The City of Arcadia already collects a 5% franchise fee from cable television operators
for cable television service. If adopted, Ordinance No. 2276 will provide the legal
instrument to continue to collect this fee and be compliant with DIVCA. In addition to
the franchise fee — and consistent with DIVCA - the proposed ordinance institutes a 1%
"public access support fee," to be remitted to the City for the purpose of capital
Mayor and City Council — Introduction of Ordinance No. 2276
July 6, 2010
Page 2
expenses related to the operation of Arcadia Community Television, and it also spells
out the penalties for violating State and Federal customer service and protection
standards pertaining to the provision of video (cable) service.
FISCAL IMPACT
The City will continue to collect the franchise fee as it has in the past. By way of
background, in FY2007 -2008 the City received a combined total of $495,339 in
franchise fees from the three cable operators. In FY2008 -2009 the fees amounted to
$435,730, and fees collected to date in FY2009 -2010 amount to $388,690.
The public access support fee collected hereafter will be compiled in a separate account
to pay for capital expenses related to the government access channel.
RECOMMENDATION
It is recommended that the City Council introduce Ordinance No 2276 amending
uncodified Ordinance No. 2206 to establish a franchise fee, public access support
fee and customer service penalties for State franchise holders providing video
service within the City of Arcadia.
Attachment: Ordinance No. 2276
ORDINANCE NO. 2276
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
ARCADIA, CALIFORNIA, AMENDING UNCODIFIED
ORDINANCE NO. 2206 TO ESTABLISH FRANCHISE FEES,
PUBLIC ACCESS SUPPORT FEES AND CUSTOMER
SERVICE PENALTIES FOR STATE FRANCHISE HOLDERS
PROVIDING VIDEO SERVICE WITHIN THE CITY OF
ARCADIA
WHEREAS, the City Council of the City of Arcadia ( "City ") has previously
adopted uncodified Ordinance No. 2206 to regulate the provision of cable television
within Arcadia; and
WHEREAS, a State law known as the Digital Infrastructure and Video
Competition Act of 2006 ( "DIVCA ") went into effect January 1, 2007; and
WHEREAS, under DIVCA, the State of California is authorized to issue video
services franchises; and
WHEREAS, the City of Arcadia, although not the franchising authority with
respect to franchises issued under DIVCA, has certain rights and responsibilities with
respect to State video franchise holders, which must be addressed through the
adoption of an ordinance; and
WHEREAS, DIVCA provides that the City shall receive a fee of 5% of gross
revenues of each State video franchisee which operates within the City for use of the
public rights -of -way, but requires the City to adopt an ordinance in order to make this
effective; and
WHEREAS, DIVCA further authorizes the City to establish and enforce penalties
against state video franchisees for violations of customer service rules consistent with
state law.
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NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ARCADIA,
CALIFORNIA, DOES ORDAIN AS FOLLOWS:
SECTION 1. Uncodified Ordinance No. 2206 is hereby amended by amending
Section 60 thereof to read as follows:
SECTION 60. APPLICATION OF CHAPTER TO STATE VIDEO SERVICES
FRANCHISEES.
(A) Notwithstanding any provision of this Ordinance
to the contrary, nothing in this Ordinance shall be deemed to
require any person or entity to obtain a franchise issued by the
City, to the extent that such person or entity is authorized to
provide cable service or video services under a cable franchise
or video services franchise issued by another government
entity under applicable law, including but not limited to Section
5800 et seq. of the California Public Utilities Code. The
requirements and provisions of this Chapter shall not apply or
be enforced to the extent that they actually conflict with
applicable State or Federal law.
(B) This Section 60 of this Ordinance is intended to
regulate video service providers holding State video franchises
and operating within the City. As of January 1, 2007, the State
of California has the sole authority to grant state video
franchises pursuant to the Digital Infrastructure and Video
Competition Act of 2006 ( "Act "). Pursuant to the Act, the City of
Arcadia shall receive a franchise fee from all State video
franchise holders operating within the City. Additionally, the
City has the responsibility to establish and enforce penalties,
consistent with state law, against all State video franchise
holders operating within the City for violations of customer
service standards, but the Act grants all authority to adopt
customer service standards to the State.
(C) For any State video franchise holder operating
within the boundaries of the City of Arcadia, there shall be a
franchise fee paid to the City equal to five percent (5 %) of the
gross revenue of that State video franchise holder, and an
additional fee paid to the City equal to one percent (1 %) of the
gross revenue of that State video franchise holder, which 1%
fee shall be used by the City for public, educational, and
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government access purposes consistent with State and
Federal law. This fee obligation shall take effect upon the
earlier of: (i) the fulfillment of all obligations to remit cash
payments to the City for support of public, educational, and
government access facilities which are contained within a City -
issued cable franchise that was in effect on January 1, 2007,
and which remained unsatisfied as of the effective date of this
ordinance; or (ii) the termination by the holder of a City- issued
cable franchise of its franchise as provided under state law.
The intent of this subsection is to comply with the requirements
of subsections (I), (m), and (n) of Section 5870 of the California
Public Utilities Code, and the 1% fee established in this
subsection is intended to be a fee authorized by subsection (n)
of Section 5870. Gross revenue, for the purposes of this
subsection, shall have the definition set forth in California
Public Utilities Code 5860.
(D) Not more than once annually, the City Manager
or his or her designee may examine and perform an audit of
the business records of all holders of a State video franchise
operating within the boundaries of the City of Arcadia to ensure
compliance with subsection (C) of this Section 60.
(E) Any holder of a State video franchise operating
within the boundaries of the City of Arcadia shall comply with
all applicable State and Federal customer service and
protection standards pertaining to the provision of video
service. The City Manager, or his or her designee, shall
provide any required notice in advance of enforcing such
standards, including but not limited to the 90 -day notice
required by 47 CFR 76.309(a), 76.1602(a), 76.1603(a), and
76.1619(c). The City Manager shall monitor the compliance of
holders of a state video franchise operating within the
boundaries of the City of Arcadia with respect to state and
federal customer service and protection standards. The City
Manager, or his or her designee, shall provide the State video
franchise holder written notice of any material breaches of
applicable customer service standards, and shall allow the
state video franchise holder 30 days from the receipt of the
notice to remedy the specified material breach. Material
breaches not remedied within the 30 -day time period will be
subject to the following penalties to be imposed by the City:
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(1) For the first occurrence of a violation, a fine of
$500.00 shall be imposed for each day the violation remains in
effect, not to exceed $1,500.00 for each violation.
(2) For a second violation of the same nature within 12
months, a fine of $1,000.00 shall be imposed for each day the
violation remains in effect, not to exceed $3,000.00 for each
violation.
(3) For a third or further violation of the same nature
within 12 months, a fine of $2,500.00 shall be imposed for
each day the violation remains in effect, not to exceed
$7,500.00 for each violation.
(F) A holder of a State video franchise operating
within the boundaries of the City of Arcadia may appeal a
penalty assessed by the City Manager to the City Council
within 60 days of the initial assessment. The City Council shall
hear all evidence and relevant testimony and may uphold,
modify or vacate the penalty. The City Council's decision on
the imposition of a penalty shall be final. The City of Arcadia
shall comply with any statutory requirement to remit all or a
portion of collected fine revenue to the State of California,
including but not limited to the requirement in Public Utilities
Code Section 5900(g).
(G) Applicants for State video franchises, or
amendments to existing franchises, that will authorize the
applicant to operate within the boundaries of the City of
Arcadia must concurrently provide complete copies to the City
of any application or amendments to applications filed with the
Public Utilities Commission. At a minimum, one complete copy
must be provided to the City Manager. Within 30 days of
receipt of notice of an application for a State video franchise
that will authorize the applicant to operate within Arcadia, the
City Manager shall provide any appropriate comments to the
Public Utilities Commission regarding an application or an
amendment to an application for a State video franchise.
(H) Any holder of a State video franchise, or City -
issued cable franchise, operating within the boundaries of the
City of Arcadia, that proposes to install above - ground facilities
in the public right -of -way shall, no less than 20 days prior to
installing such facilities, provide written notice to the owner of
the private or public property (excluding the public right -of -way)
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SECTION 2: The City Clerk shall certify to the adoption of this Ordinance and
shall cause a copy of the same to be published in the official newspaper of said City
within fifteen (15) days after its adoption. The Ordinance shall take effect thirty -one
(31) days after its adoption.
Passed, approved and adopted this day of , 2010.
ATTEST:
City Clerk
APPROVED AS TO FORM:
Stephen P. Deitsch
City Attorney
nearest to the proposed facility. For purposes of this
subsection, "above- ground facilities" shall include only those
facilities that are located on the ground or on a base or
pedestal that is on the ground, and shall exclude aerial or pole -
mounted facilities. Any franchisee to which this section applies
shall provide the City with a copy of the proposed form of
notice to be used in compliance with subsection (a), no less
than 10 days prior to mailing or delivering the notice. The City
may require the franchisee to amend the form of the notice.
Once the City has approved the form of notice, the franchisee
shall not be required to obtain additional approvals of notice
from the City, so long as the franchisee does not materially
deviate from the form of notice approved by the City.
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Mayor of the City of Arcadia