HomeMy WebLinkAboutItem 1a - Reauthorizing State Video Franchise Fees for public, education and government access purposes
DATE: November 21, 2017
TO: Honorable Mayor and City Council
FROM: Stephen P. Deitsch, City Attorney By: Michael Bruckner, Assistant to the City Manager
SUBJECT: ORDINANCE NO. 2351 (UNCODIFIED) AMENDING UNCODIFIED
ORDINANCE NO. 2276 AND REAUTHORIZING THAT ORDINANCE AS
AMENDED, INCLUDING THE FEE PAID TO THE CITY BY STATE VIDEO FRANCHISE HOLDERS FOR PUBLIC, EDUCATIONAL, AND
GOVERNMENT ACCESS PURPOSES
Recommendation: Introduce
SUMMARY
The Digital Infrastructure and Video Competition Act (“DIVCA”) authorizes the California
Public Utilities Commission to grant State video franchises with a term of 10 years, and
authorizes local jurisdictions to take certain actions, including to establish a fee by
ordinance to be paid by holders of State video franchises operating in the jurisdiction to support public, educational, and government (“PEG”) access. In 2010, the City of
Arcadia adopted Ordinance No. 2276, which, among other things, established a PEG
fee in the amount of 1% of gross revenues (as defined in California Public Utilities Code
5860) of each State video franchise holder. The provision of DIVCA authorizing
localities to establish a PEG fee also includes language indicating that an ordinance establishing such a fee shall expire, and may be renewed, upon the expiration of a
State video franchise. The statute is ambiguous and it is unclear if it would require the
reauthorization of the PEG fee established by the City of Arcadia.
Nonetheless, as the 10 year State video franchises issued pursuant to DIVCA have recently begun to expire and be renewed, to the extent any action is required of the City
of Arcadia under DIVCA, it is in the best interests of the City to reauthorize Ordinance
No. 2276 to ensure that State video franchise holders continue paying PEG fees. The
attached Ordinance amends Ordinance No. 2276 to provide for automatic
reauthorizations of Ordinance 2276, including the PEG fee, in the future, and to address another DIVCA requirement to provide State video franchise holders with an appeal to
City Council of denied encroachment permits. Finally, the Ordinance reauthorizes
Ordinance 2276, as amended. Therefore, it is recommend that the City Council
introduce Ordinance No. 2351 amending and reauthorizing City of Arcadia Ordinance
Ordinance No. 2351 Reauthorizing PEG Fees Under DIVCA November 21, 2017
Page 2 of 3
No. 2276 so that as each State video franchise ordinance expires and is renewed by the California Public Utilities Commission now and in future years, State video franchise holders continue to pay PEG fees to the City, and to address rights-of-way management
requirements of DIVCA.
BACKGROUND In 2006, the Digital Infrastructure and Video Competition Act was signed into law and
codified at California Public Utilities Code section 5800, et seq. DIVCA established a
State video franchising system that replaced local cable franchising but left some limited
local authority over State video franchise holders. In 2010, the City of Arcadia adopted Ordinance No. 2276, which amended Ordinance No. 2206 to implement its limited authority over State video franchise holders, including establishing a PEG fee, among
other provisions. The proposed Ordinance modifies and reauthorizes Ordinance No.
2276.
DISCUSSION
Under DIVCA, State video franchises are issued by the CPUC and have a stated term
of 10 years. At present, four state video franchises include the City of Arcadia, which
are held by Charter Spectrum (formerly Time Warner Cable), AT&T, Frontier (formerly Verizon), and Giggle Fiber.
The DIVCA provision authorizing local jurisdictions to establish a PEG fee by Ordinance
also includes language indicating that an Ordinance establishing a PEG fee shall expire,
and may be reauthorized, upon the expiration of the State video franchise. The statute is ambiguous and subject to different interpretations as to its meaning and application, and it is unclear if it would require the reauthorization of the PEG fee established by the
City. Some State video franchises covering Arcadia expired and were renewed early
this year apparently without any State video franchise holders ceasing to make PEG fee
payments. However, Ordinance No. 2276 does not specifically address reauthorization, and, to the extent any action is required of Arcadia under DIVCA, it is in the best interests of the City to adopt an Ordinance amending and reauthorizing Ordinance No.
2276, so that when additional franchises expire and are renewed (the next one being
Spectrum’s franchise in January 2018), and as any other State video franchises expire
and are renewed by the CPUC in future years, State video franchise holders continue to pay PEG fees without need for subsequent City Council action.
Additionally, DIVCA preserves local authority to regulate the time, place, and manner of
placement of facilities and equipment in the public rights-of-way by State video
franchise holders, but imposes certain procedural requirements on local jurisdictions with respect to the permitting process applicable to holders of State video franchises.
Ordinance No. 2276 does not address this specific requirement of DIVCA. To address
this, the proposed Ordinance adds provisions establishing a 60 day time limit for the
City to issue or deny an encroachment permit sought by a State video franchise holder,
Ordinance No. 2351 Reauthorizing PEG Fees Under DIVCA November 21, 2017
Page 3 of 3
and giving State video franchise holders a right to appeal the denial of an encroachment permit to the City Council, as required by DIVCA.
If approved, this Ordinance will amend Ordinance No. 2276 to provide for future
reauthorizations of the PEG fee that are automatic without the need for additional City
Council action, and to address rights-of-way management requirements of DIVCA, and will reauthorize Ordinance No. 2276, as amended.
FISCAL IMPACT
The City of Arcadia currently receives approximately $100,000 per year in PEG fees from State video franchise holders. If the Ordinance is not adopted, State video franchise holders may stop paying PEG fees to the City as their State franchises expire
and are renewed, based on a claim that reauthorization is required.
ENVIRONMENTAL ANALYSIS
This Ordinance is not a project within the meaning of Section 15378 of the State of
California Environmental Quality Act (“CEQA”) Guidelines, because it has no potential
for resulting in physical changes in the environment, directly or indirectly. Under Title 14
of the California Code of Regulations, Section 15061(b)(3), that this Ordinance is nonetheless exempt from the requirements of CEQA in that the activity is covered by the general rule that CEQA only applies to projects which have the potential to cause a
significant effect on the environment. Where it can be seen with certainty that there is
no possibility that the activity in question may have a significant effect on the
environment, the activity is not subject to CEQA. This action is purely administrative, and is exempt from environmental review under CEQA.
RECOMMENDATION
It is recommend that the City Council introduce Ordinance No. 2351 (uncodified) amending uncodified Ordinance No. 2276 and reauthorizing that Ordinance as amended, including the fee paid to the City by State video franchise holders for public,
educational, and government access purposes.
Attachment: Ordinance No. 2351