ORDINANCE NO. Introduction (CM)

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1 City Council ORDINANCE NO. Introduction (CM) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF WATSONVILLE AMENDING CHAPTER 11 (CABLE TELEVISION FRANCHISES) OF TITLE 3 (FINANCE) OF THE WATSONVILLE MUNICIPAL CODE ADDING A NEW ARTICLE (STATE VIDEO FRANCHISES) PERTAINING TO STATE VIDEO SERVICE FRANCHISES AND IMPLEMENTATION OF THE CALIFORNIA DIGITAL INFRASTRUCTURE AND VIDEO COMPETITION ACT OF 2006 (DIVCA) Table of Contents SECTION 1. ENACTMENT ARTICLE 11. State Video Franchises Sec Purpose Sec Administration and Regulations Sec State Video Service Franchise Fees Sec State Video Service Fees for Public Educational and Governmental (PEG) Access Channels Sec Carriage and Interconnection for Public, Educational and Governmental (PEG) Access Channels Sec Customer Service Penalties Sec Audits and Records Sec Permits and Construction Sec Procedures for Appeal of Denial of an Encroachment Permit Sec Emergency Alert System Sec Severability Sec Notices SECTION 2. PUBLICATION SECTION 3. EFFECTIVE DATE o-0-o NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF WATSONVILLE, CALIFORNIA, DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1. ENACTMENT. Chapter 11 entitled Cable Television Franchises is hereby amended by adding Article 11 (State Video Franchises) of Title 3 (Finance) of the Watsonville Municipal Code to read in words and figures as follows: 1 AJS CJP CM

2 ARTICLE 11. State Video Franchises. Special provisions applicable to holders of state franchises that offer video services within the incorporated areas of the City of Watsonville. Sec Purpose. This Article is intended to be applicable to state franchise holders who have been awarded a state franchise for the provision of video service under the Digital Infrastructure and Video Competition Act of 2006 (DIVCA), codified by the California Public Utilities Code (CPUC) Sections 5800, et seq. It is the purpose of this Article to implement within the incorporated areas of the City the provisions of DIVCA and the rules of the California Public Utilities Commission promulgated thereunder that are applicable to a local franchising entity or a local entity as defined in Sections 5830(h) and 5830(k) of the CPUC. Sec Administration and Regulations. The City may from time to time adopt rules and regulations to implement the provisions of this Article consistent with DIVCA. The City Manager or the City Manager s designee is hereby authorized to administer this Article and to provide or cause to be provided any notices (including noncompliance notices) and to take any action on behalf of the City that may be required under this Article, DIVCA, or under applicable law. The failure of the City, upon one (1) or more occasions, to exercise a right or to require compliance or performance under this Article or any other applicable law shall not be deemed to constitute a waiver of such right or a waiver of compliance or performance, unless such right has been specifically waived in writing or its exercise by the City is not permitted by DIVCA. 2

3 (d) The City may designate one (1) or more entities, including itself, to control and manage the use of Public, Educational and Governmental (PEG) Access channels, and any PEG facilities and equipment owned, controlled or used by the City or the designated entity or entities. Sec State Video Service Franchise Fees. As provided in Section 5860 of the CPUC, any holder of a state franchise that offers video service within the incorporated areas of the City shall calculate and remit to the City a franchise fee equal to five (5%) percent of gross revenues. This section shall satisfy the requirements of Section 5840(q) of the CPUC. For purposes of this Article, gross revenues shall have the meaning set forth in Section 5860(d) of the CPUC. (d) Pursuant to Section 5860(h) of the CPUC, a holder of a state franchise shall remit the state franchise fee to the City quarterly, within forty-five (45) days after the end of each calendar quarter. Sec State Video Service Fees for Public Educational and Governmental (PEG) Access Channels. As of December 31, 2006, the City was imposing a fee to support Public, Educational and Governmental (PEG) Access channel facilities of sixty four ($0.64) cents per month per subscriber. As required by Section 5870(n) of the CPUC, the City establishes a fee of sixty four ($0.64) cents per month per subscriber to be paid by any holder of a state franchise to support PEG Access channel facilities. Consistent with the requirement 3

4 imposed on the City-franchised cable operator in the City, the support payment amount may be increased to an amount not to exceed One and no/100ths ($1.00) Dollar per month per subscriber. Any such increase shall be upon ninety (90) days prior written notice from the City to the holder of a state franchise that offers video service with the City and after a City Council public hearing. The fee shall be paid concurrent with the franchise fee payments to the City. As of December 31, 2006, the support fee provided for in Section was the equivalent of one and thirteen hundredths (1.13%) percent of the gross revenues of the City-franchised cable operator in the City. Upon the expiration of the City-granted franchise in the City, all state franchise holders operating in the City shall pay a fee to support PEG channel facilities equal to One and Thirteen Hundredths (1.13%) percent of gross revenues. The fee shall be paid concurrent with the franchise fee payments to the City as described above in Section (d). Sec Carriage and Interconnection for Public, Educational and Governmental (PEG) Access Channels. A holder of a state franchise that uses the public rights-of-way to offer video service shall designate sufficient capacity on its network to enable carriage of at least four (4) PEG Access channels for the exclusive use of the City or its designees. 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 shall be the same channel numbers used by the incumbent cable operator unless prohibited by federal law. As set forth in Sections 5870 and 5870(g)(3) of the CPUC, a holder of a state franchise shall ensure that all PEG Access channels are receivable by all 4

5 subscribers, whether they receive digital or analog service, or a combination thereof, without the need for any equipment other than that needed to receive the lowest cost tier of service. PEG Access capacity provided by a state franchise holder shall be of similar quality and functionality to that offered by commercial channels on the state franchise holder s lowest cost tier of service unless the PEG signal is provided to the state franchise holder at a lower quality or with less functionality. (d) As set forth in Section 5870(h) of the CPUC, the holder of a state franchise and an incumbent cable operator shall negotiate in good faith to interconnect their networks for the purpose of providing PEG programming. If a holder of a state franchise and an incumbent cable operator cannot reach a mutually acceptable interconnection agreement for PEG carriage, the City shall require the incumbent cable operator to allow the holder of a state franchise to interconnect its network with the incumbent cable operator s network at a technically feasible point on the state franchise holder s network as identified by the holder of the state franchise. If no technically feasible point of interconnection is available, the state franchise holder shall make interconnection available to the PEG channel originator and shall provide the facilities necessary for the interconnection. The cost of any interconnection shall be borne by the holder of the state franchise requesting the interconnection unless otherwise agreed to by the parties. Sec Customer Service Penalties. Any holder of a state franchise shall comply with all applicable state and federal customer service and protection standards pertaining to the provision of video service. 5

6 The City will provide any holder of a state franchise written notice of any material breach of applicable customer service and protection standards, and will allow the state franchise holder at least thirty (30) calendar days from the receipt of the notice to remedy the specified material breach. A material breach that is not remedied by the state franchise holder within the remedy period shall subject the state franchise holder to the following penalties to be imposed by the City: (1) For the first occurrence of a material breach, a penalty of not more than Five Hundred and no/100ths ($500.00) Dollars for each day of each material breach, not to exceed One Thousand Five Hundred and no/100ths ($1,500.00) Dollars for each occurrence of a material breach. (2) For the second violation of the same nature within twelve (12) months, a penalty of One Thousand and no/100ths ($1,000.00) Dollars for each day of each material breach, not to exceed Three Thousand and no/100ths ($3,000.00) Dollars for each occurrence of the material breach. (3) For a third or further violation of the same nature within twelve (12) months, a penalty of Two Thousand Five Hundred and no/100ths ($2,500.00) Dollars for each day of each material breach, not to exceed Seven Thousand Five Hundred and no/100ths ($7,500.00) Dollars for each occurrence of the material breach. Any notice and any penalty may be issued or imposed by the City Manager, or the City Manager s designee. Any notice shall be in writing. Notices shall be transmitted by United States Postal Service certified or registered mail, return receipt requested and postage prepaid, or by private commercial delivery or courier service for same day or next business day delivery with delivery and receipt signature required. 6

7 (d) The holder of a state franchise may appeal any finding of material breach or imposition of penalties to the City Council. Any appeal must be made within thirty (30) calendar days of receipt by the state franchise holder of the finding of material breach or the imposition of penalties, and must be submitted in writing to the City Clerk and the City Manager in order to be placed on a City Council agenda for consideration. Any appeal must contain a detailed explanation of why the applicant believes that the finding of material breach or the imposition of penalties was inconsistent with statutory requirements. (e) The City and any holder of a state franchised may mutually agree to extend the time periods specified herein. Any such agreement shall be in writing and executed by the City Manager, or the City Manager s designee, and an authorized representative of the holder of a state franchise. (f) Any penalty imposed on the holder of a state franchise shall be paid to the City. As provided for in Section 5900(g) of the CPUC, the City shall submit one-half of all penalties received from a holder of a state franchise to the Digital Divide Account established in Section of the CPUC. Sec Audits and Records. Pursuant to Section 5860(i) of the CPUC, not more than once annually, the City or its designee may examine and audit the business records of a state franchise holder to ensure compliance with the franchise fee payment obligations of Section and the PEG fee payment obligations of Section A holder of a state franchise shall keep all business records reflecting any gross revenues, even if there is a change in ownership of the holder of a state franchise, for at least four (4) years after such gross revenues are recognized by the 7

8 state franchise holder on its books and records. In the case of subscriber numbers used for calculating the PEG fee, a holder of a state franchise shall keep data on the number of its subscribers in the City, even if there is a change in ownership of the holder of a state franchise, for at least four (4) years after the close of each calendar quarter on which the PEG fee is to be paid. To the extent consistent with DIVCA and other applicable law, the City may request, and a holder of a state franchise shall provide, information and books and records to the extent necessary to monitor a state franchise holder s compliance with this Article. Sec Permits and Construction. A holder of a state franchise that offers video service within the City, in its use of public rights-of-way and public and private property shall, to the extent otherwise permitted by law, comply with all generally applicable City encroachment and other permitting requirements. Sec Procedures for Appeal of Denial of an Encroachment Permit. As provided for in Section 5885 of the CPUC, the City shall either approve or deny an application from a holder of a state franchise for an encroachment permit within sixty (60) days of receiving a completed application. An encroachment permit means any permit issued by the City relating to construction or operation of facilities relating to the provision of video service under a state franchise. An application for an encroachment permit is considered complete when the applicant has complied with all statutory requirements, including the California Environmental Quality Act (CEQA) of the Public Resources Code. 8

9 (d) Any City denial of an application for an encroachment permit shall be in writing and shall contain a detailed explanation of the reason for the denial. (e) An applicant whose application for an encroachment permit has been denied may appeal the denial to the City Council as provided for in Chapter 4 of Title 1 of this Code. Any appeal must be made within fourteen (14) calendar days of receipt by the holder of a state franchise of the denial, and must be submitted in writing to the City Clerk and the City Manager in order to be placed on the City Council agenda for consideration. Any appeal must contain a detailed explanation of why the applicant believes that the denial was inconsistent with statutory requirements. Sec Emergency Alert System. Pursuant to Section 5860 of the CPUC, a holder of a state franchise shall comply with the Emergency Alert System (EAS) requirements of the Federal Communications Commission (FCC) in order that emergency messages may be distributed over the state franchise holder s network. The EAS of the holder of a state franchise shall be remotely activated by telephone and shall allow an authorized representative of the City to override the audio and video on all channels on the state franchise s network that may be lawfully overridden, without the assistance of the holder of the state franchise, for emergency broadcasts from a location designated by the City in the event of a civil emergency or for reasonable tests. Testing of a state franchise holder s EAS shall occur at times that will cause minimal subscriber inconvenience. The City shall permit only appropriately trained and authorized persons to operate the EAS equipment. Except to the extent expressly prohibited by applicable 9

10 law, the City shall hold the state franchise holder, its employees and officers harmless from any claims arising out of the emergency use of its facilities by the City. Sec Severability. If any section, subsection, paragraph, sentence, clause, phrase or portion of this Article is for any reason held to be invalid, unconstitutional or unenforceable, these decisions shall not affect the validity of the remaining portions of this Article. The City Council hereby declares that this Article and each section, subsection, division, paragraph, sentence, clause, phrase, and portion thereof would have been adopted irrespective of the fact that one or more portions of this Article may be declared invalid, unconstitutional or unenforceable. Sec Notices. All notices and copies of documents that DIVCA requires to be provided to the City, as a local entity or a local franchising entity, shall be addressed to the City Manager or the City Manager s designee. SECTION 2. PUBLICATION. This ordinance shall be published in the Watsonville Register Pajaronian in compliance with the provisions of the Charter of the City of Watsonville. SECTION 3. EFFECTIVE DATE. This ordinance shall be in force and take effect thirty (30) days after its final adoption. *********************************** 10

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