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Ordinance - 2191ORDINANCE NO.2191 AN ORDINANCE OF THE CITY OF WEST COVINA AMENDING ITS CABLE TELEVISION FRANCHISE AND LICENSE ORDINANCES TO AMENDING ARTICLE 2 OF CHAPTER 11 OF THE WEST COVINA MUNICIPAL CODE TO IMPLEMENT THE DIGITAL INFRASTRUCTURE AND VIDEO COMPETITION ACT OF 2006 WHEREAS, the California State Legislature passed and the Governor signed the Digital Infrastructure and Video Competition Act of 2006 (AB 2987) (the "Act"), effective January 1, 2007, which provides for state video franchises; and WHEREAS, the Act establishes a regulatory structure whereby effective January 1, 2007, the State, by and through the California Public Utilities Commission, as the sole franchising authority is vested with the authority to grant franchises, regulate build -out and non-discrimination standards, impose user and application fees, and establish franchise fees to video service providers; and WHEREAS, the Act establishes that local entities, such as the City of West Covina, have the authority to and are responsible for the administration and implementation of certain provisions of the Act including but not limited to managing the rights -of -way, regulating payment of fees for Public, Educational, and Government programming, requiring the provision of Public, Educational, and Government channels, and enforcing federal and state customer service standards; and WHEREAS, the Act requires the City must establish certain rights and responsibilities, by ordinance, before such rights and responsibilities become effective and enforceable against state video franchise holders; and WHEREAS, pursuant to then existing laws (the Cable Act) which regulated video service franchises, on December 23, 2003, the City of West Covina entered into franchises agreement with Charter Communications, Inc. ("Charter") whereby Charter was granted a cable television franchise and license to construct and operate a cable television system within the public streets and rights - of -way of the City; and WHEREAS, the Charter cable television franchise and license continues to be in full force and effect and expires fifteen (15) years from the effective date of the franchise agreement, December 23, 2018; and WHEREAS, on March 8, 2007, the California Public Utilities Commission issued Verizon California, Inc. ("Verizon") a California Video Franchise Certificate (Franchise Number: 0001), which included the City of West Covina as an affected local entity; and NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF WEST COVINA DOES HEREBY ORDAIN AS FOLLOWS: SECTION NO. 1: Article 2 of Chapter 11 of the West Covina Municipal Code, entitled "Community Antenna Television Systems," is hereby repealed SECTION NO. 2: Article 2 of Chapter 11 of the West Covina Municipal Code shall henceforth be entitled, "Video Franchises" and shall read as follows: See. 11-16. Title This ordinance shall be known as the "State Video Franchise Ordinance." See. 11-17. Purposes and Implementation. It is the purpose of this article to regulate video service providers holding state video franchises within the jurisdictional boundaries of the City of West Covina ("City") and implement the provisions of the Digital Infrastructure and Video Competition Act of 2006, Assembly Bill 2987 (Ch. 700, Stats. 2006), codified at California Public Utilities Code Sections 5800, et seq. (the "Act" or "DIVCA"), and the rules of the California Public Utilities Commission ('TUC") Ordinance No. 2191 Page 2 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 California Public Utilities Code, respectively. Consistent with that purpose, the provisions of this chapter are to be construed in a manner that is consistent with the California Public Utilities Code and the applicable rules of the Commission promulgated thereunder. With the passage and adoption of DIVCA, the PUC became the sole authority with power to grant state video franchises. Pursuant to DIVCA, the City shall receive a franchise fee and channel facilities and institutional networks for public, educational and/or government ("PEG") from all state video franchise holders operating within the City. Additionally, the City acquired 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. DIVCA precludes the City from adopting its own standards and grants all authority to adopt customer service standards to the state agency, the PUC. DIVCA leaves unchanged the City's authority to regulate the City's existing cable franchises until the expiration of any such franchises. Sec. 11-18. Franchise Fee. (a) Every state franchise holder operating within the jurisdictional boundaries of the City shall pay a franchise fee to the City in the amount of five (5) percent of that state franchise holder's gross revenues derived from the operation of its network to provide cable or video services within the City. (b) For purposes of this chapter, "gross revenue" shall have the meaning set forth in Section 5860 of the California Public Utilities Code. (c) A state franchise holder shall remit the franchise fee to the City quarterly, within forty-five (45) days after the end of the quarter for that calendar quarter. Each payment shall be accompanied by a summary explaining the. basis for the calculation of the franchise fee. If the state franchise holder does not pay the franchise fee when due, the state franchise holder shall pay a late payment charge at a rate per year equal to the highest prime lending rate during the period of delinquency, plus one percent (1%). If the state franchise holder has overpaid the franchise fee, it may deduct the overpayment from its next quarterly payment. Sec. 11-19. PEG Channels. (a) Franchise holders currently operating within. the City under a local franchise agreement with the City shall, pursuant to Public Utilities Code Section 5870(c), continue to fully provide and support PEG channel facilities and institutional networks and to provide cable services to community buildings to the maximum extent permitted by law. (b) A state franchise holder under the Act shall initially activate and provide at least three (3) PEG channels, pursuant to Public Utilities Code § 5870(c). Pursuant to Public Utilities Code Section 5870(e), a state franchise holder may no longer make a PEG channel available to the City and may program that PEG channel at the state franchise holder's discretion if any PEG channel is not utilized by the City for at least eight (8) hours per day, as measured on a quarterly basis. In addition, a state franchise holder shall restore PEG channels pursuant to Public Utilities Code Section 5870(e). (c) All state franchise holders shall comply with the provisions of the Act related to PEG channels. Without limiting the foregoing, the PEG channels shall all be carried on the basic service tier. To the extent feasible, the PEG channels shall not be separated numerically from other channels carried on the basic service tier and the channel numbers for the PEG channels shall be the same channel numbers used by the incumbent cable operator unless prohibited by federal law and shall provide picture and sound quality and channel accessibility and location equal to, or substantially equal to, that provided by the incumbent cable providers. After the initial designation of PEG channel numbers, the channel numbers shall not be changed without the agreement of the local entity unless the change is required by federal law. Ordinance No. 2191 Page 3 (d) A state franchise holder shall have three (3) months from the date City requests the PEG channels to designate the capacity. However, the three-month period shall be tolled by any period during which the designation or provision of PEG channel capacity is technically infeasible, including any failure or delay of the incumbent cable operator to take adequate interconnection available, as required by the Act. (e) Any state franchise holder who believes that the designation or provision of PEG channel capacity is technically infeasible, shall provide to City, in writing, its reasons therefore and its plan for correcting or solving the infeasibility. The City may hold a hearing on the claim of infeasibility and, thereafter, take such action as City deems proper to require the designation and provision of the PEG channels on the state franchise holder's system. See.11-20. Audit Authority. Not more than once annually, the City Manager or the City Manger's designee may examine and perform an audit of the business records of a holder of a state video franchise to ensure compliance with Section 11-18. Sec. 11-22. Customer Service and Protection. (a) A state franchise holder shall comply with Sections 53055, 53055.1, 53055.2 and 53088.2 of the California Government Code; the FCC customer service and notice standards set forth in Sections 76.309, 76.1602, 76.1603 and 76.1619 of Title 47 of the Code of Federal Regulations; Section 637.5 of the California Penal Code; the privacy standards of Section 551 of Title 47 of the United States Code; and all other applicable state and federal customer service and consumer protection standards pertaining to the provision of video service, including any such standards hereafter adopted. In case of a conflict, the stricter standard shall apply. All customer service and consumer protection standards under this paragraph shall be interpreted and applied to accommodate newer or different technologies while meeting or exceeding the goals of the standards. (b) The City shall enforce, in the manner set forth in the Act, all customer service and protection standards contained in section 5900 of the Act, including without limitation those standards set forth in section 5900(c). The City is authorized to impose penalties for any material breach of the Act, as set forth herein. (c) The City Manager or the City Manager's designee shall monitor the compliance of state video franchise holders with respect to state and federal customer service and protection standards. The City Manager or the City Manager's designee shall provide the state franchise holder with written notice of any material breaches of applicable customer service standards and will allow the state video franchise holder thirty (30) days from the receipt of the notice to remedy the specified material breach. Material breaches not remedied within the thirty (30) day time period will be subject to the maximum penalties, as described in subsection (d) and imposed by the City. (d) The maximum monetary penalties set forth in Public Utilities Code section 5900 are hereby adopted and enacted as the applicable schedule of penalties for the material breach of the Act, including but not limited to section 5900 of the Act, by a holder of a state franchise, as follows: 1. For the first occurrence of a material breach, five hundred dollars ($500) per day for each material breach, not to exceed one thousand five hundred dollars ($1,500) for occurrence of a material breach. 2. If a material breach has occurred and notice has been provided and a fine or penalty has been assessed, for any subsequent breach of the same nature within twelve (12) months, shall be subject to a penalty of up to one thousand dollars ($1,000) for each day of each material breach, not to exceed three thousand dollars ($3,000) for each occurrence of the material breach. 3. If a third or further material breach of the same nature occurs within those same twelve (12) months, and notice has provided and a fine or penalty has been Ordinance No. 2191 Page 4 assessed; the penalties shall be increased to a maximum of two thousand five hundred dollars ($2,500) for each occurrence of the material breach, not to exceed seven thousand five hundred dollars ($7,500) for each occurrence of the material breach. (e) As used herein, "Material Breach" is defined as set forth in the Act, Public Utilities Code Section 5900. (f) A state video franchise holder may appeal a penalty assessed by the City Manger to the City Council within sixty (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 the penalty shall be final. Sec. 11-23. City Response to State Franchise Applications. (a) Applicants for State Franchises within the boundaries of the City must concurrently provide complete copies to the City of any application or amendments to applications filed with the PUC. One complete copy must be provided to the City Clerk, and one complete copy to the City Manager. (b) The City Manager shall provide any appropriate comments to the PUC regarding the application or an amendment to an application for a State Franchise. Sec. 11-24. Severability. If any section, subsection, sentence, clause, phrase or portion of this chapter for any reason is held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of the chapter. The city council hereby declares that it would have adopted this chapter and each section, subsection, sentence, clause, phrase or portion thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases or portions be declared invalid or unconstitutional. SECTION NO. 3: The City Clerk shall certify the adoption of this Ordinance and shall cause the same to be posted or published in the manner as required by law. SECTION NO. 4: This ordinance shall take effect and be in force thirty (30) days from and after the date of its passage. APPROVED AND ADOPTED on this 21 St day of April, 2009. AT ST Mayor Ro er Hernandez ity ClerkLaurie- C 'co I, LAURIE CARRICO, CITY CLERK of the City of West Covina, California, do hereby certify that the foregoing Ordinance was regularly introduced and placed upon its first reading at a regular meeting of the City Council on the 71h day of April, 2009. That thereafter said Ordinance was duly adopted and passed at a regular meeting of the City Council on the 21St day of April 2009, by the following vote: AYES: Herfert, Lane, Sanderson, Touhey, Hernan NOES: None ABSENT: None ABSTAIN: None City Clerk tairie Carrico APP OVED AS TO FORM: City Attorney Am Alvarez-Glasman CERTIFICATION I, Susan Rush, Assistant City Clerk of the City of West Covina, State of California, do hereby certify that a true and accurate copy of Ordinance No. 2191 was duly enacted and passed by the West Covina City Council, and caused to be posted pursuant to law (G.C. 36933), at the following locations: West Covina City Clerk's Office (3rd floor) Los Angeles County Public Library (West Covina Branch) West Covina Police Department (front lobby) Susan Rush, As6stant City Clerk Posted: April 23, 2009