HomeMy WebLinkAbout2012/05/22 Item 15CITY COUNCIL
AGENDA STATEMENT
~~~ CIIY OF
-~ CHULAVISTA
May 22 , 2012, Item ~Jr
ITEM TITLE: PUBLIC HEARING TO CONSIDER AMENDING MUNICIPAL CODE CHAPTER
5.52 AND ADDING CHAPTER 5.53
ORDINANCE OF THE CITY OF CHULA VISTA AMENDING CHULA VISTA
MUNICIPAL CODE CHAPTER 5.52 "PAY TELEVISION," AND ADDING
CHAPTER 5.53 "STATE VIDEO FRANCHISES," IN ACCORDANCE WITH THE
CALIFORNIA DIGITAL INFRASTRUCTURE AND VIDEO COMPETITION ACT
OF 2006
SUBMITTED BY: DIRECTOR OF ECONOMIC DEVELOPMENT
REVIEWED BY: CITY MANAGER ~ ~j
4/STHS VOTE: YES ^ NO
SUMMARY
In September 2006 the Governor signed into law the Digital Infrastructure and Video
Competition Act of 2006 (DIVCA) that allows video service providers to obtain astate-issued
franchise to provide video services in a local community. Chula Vista's Municipal Code Chapter
5.52, which governs the provision of cable and video services in the City, was modified last in
1999, prior to DIVCA's adoption. Adoption of the proposed ordinance will bring Chula Vista's
municipal code into compliance with the minimum components of State law as adopted under
DIVCA. These amendments include:
• Recognize that cable, video, and such services are entitled "cable services" and "video
services" for purposes of the ordinance
• Reflect the fact that video service providers may now obtain a video franchise from the
State of California
• Reflect how franchise state franchise holders function under DIVCA and City's ordinance
provisions including but not limited to use of the right-of-way under Chapter 5.30.020.
• Allow the framework within the code governing existing or past local franchise agreements
to remain intact as originally enacted in 1987 for Ultronics/Chula Vista Cable and 1999 for
Cox Communications
• Re-assert that Franchise Fees remain at 5% of gross revenues,
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• Establish State consumer protection standards and enforcement provisions,
• Establish the standard Public, Education and Government (PEG) Fee minimum of 1% of
gross revenues
• Establish that PEG origination and channels are required at a quality equal to regular
program broadcasting with a minimum of 1 and up to 3 channels,
• Recognize that cable and video services are components of a rapidly emerging
communications technology and regulatory environment that uses the same infrastructure
in the City's rights-of-way as telecommunications, video and broadband services, and
• Establish the City's authority to audit State video and cable service Franchisee and PEG
Records
Staff will return to Council as needed to update additional components of the Municipal Code
to accurately reflect the changes in technology, State and Federal law_as the law evolves and
resources allow.
ENVIRONMENTAL REVIEW
The Environmental Review Coordinator has reviewed the proposed activity for compliance with
the California Environmental Quality Act (CEQA) and has determined that the activity is not a
"Project" as defined under Section 15378 of the State CEQA Guidelines because it will not result
in a physical change to the environment; therefore, pursuant to Section 15060(c)(3) of the State
CEQA Guidelines the actions proposed are not subject to CEQA.
RECOMMENDATION
Staff recommends that the City Council introduce and pass to second reading, an ordinance
amending Chapter 5.52, and adding 5.53 Governing the Provision of Cable /Video Services in
the City of Chula Vista City Municipal Code.
BOARDS/COMMISSION RECOMMENDATION
A public workshop was held on February 27, 2012 to take comment from the public and
industry. Most if not all of those comments have been incorporated herein. Staff will be
available at the Council meeting to provide context and elaborate on the intent of those
comments upon request.
DISCUSSION
On September 29, 2006, the Governor signed AB 2987 to become effective January 1, 2007. The
statute, Digital Infrastructure and Video Competition Act of 2006 (DIVCA), established a new
framework for the regulation of cable television. The fundamental change is that beginning
January 2, 2008 cities no longer have the authority to issue new franchises to video providers;
instead, that authority is now held solely by the California Public Utilities Commission (PUC.)
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The DIVCA goals, as stated and implemented by the Communications Division of the PUC deal
not only with video franchises, but with increasing the deployment of broadband infrastructure
within California, particularly to un-served and underserved areas as follows:
1. Create a fair and level playing field for all market competitors that does not
disadvantage or advantage one service provider or technology over another;
2. Promote the widespread access to the most technologically advanced cable and video
services to all California communities in a nondiscriminatory manner regardless of socio-
economic status;
3. Protect local government revenues and their control of public rights-of-way;
4. Require market participants to comply with all applicable consumer protection laws;
and
5. Complement efforts to increase investment in broadband infrastructure and close the
digital divide.
On March 1, 2007 the CPUC began accepting applications for a State franchise from entities
that wish to provide video service in California. A city is supposed to receive simultaneous
notice regarding State franchise applications and prior to commencing video service in a city.
AT&T applied for a State franchise for its service territory including Chula Vista in 2007 and Cox
Communications applied for a State franchise including the Chula Vista area in October 2010.
The City terminated the NexFiorizon Franchise in November 2009. M3 Communications
applied for and received a State franchise to operate in Chula Vista in July 2011, and Access
Cable Corporation applied for and received a State franchise in April 2012.
The proposed ordinance makes minor modifications to Municipal Code Section 5.52, Pay
Television, and adds Section 5.53, Video Service Providers, to bring the current code into
compliance and adopt the consumer protections stated under DIVCA without discouragement
of the existing sections of the code or the agreements that have historically provided
complimentary consumer, right-of-way, revenue and related local stakeholder protections.
Franchise and Public Education and Government (PEG) Program Fees
One component of the new State law, Public Utilities code 5870(n), requires that video
franchisees remit at least 1% and up to 3% of "gross revenue" to Cities as a Fee to support PEG
programming. Chula Vista has received PEG grants of approximately $65,000 for equipment and
$100,000 for program and consulting services from Cox Communications in 1999, but not a
monthly PEG Fee. Staff has attempted to survey the county jurisdictions and estimates that an
estimated 14 of 18 jurisdictions are currently receiving a PEG Fee from one or more video
service providers (Attachment 1). Video providers are authorized, but are not obligated to pass
the Fee through to their customers. If video providers pass the PEG Fee on to customers, it will
appear on monthly residential and commercial communication invoices as an additional charge.
Staff estimates that the typical cost to residents fora 1% PEG Fee will be between 45 cents and
80 cents for the average customer per month and customers with the low income or senior rate
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are expected to pay 20 cents per month or less. The projected PEG Fee revenue for a full fiscal
year is estimated at up to $600,000. The State regulation defers to Federal statute to establish
the range of eligible PEG Fee expenditures. Federal regulation currently limits those
expenditures to capital costs for PEG programming, however HR 3745 (Attachment 2), the
Community Access Preservation Act recognizes the importance of PEG programming and
proposes to loosen those restrictions to include reasonable operating costs associated with
providing PEG programming. The PEG Fee is in addition to the franchise fee, which continues to
be 5% of gross revenue, where it has been since it was established with Cox Communications
and Chula Vista Cable in 1999 (Attachment 3 ). Cable/Video Industry representatives have
stated that they believe the State's definition of gross revenues has captured more revenue
components than the City's former definition. DIVCA refers to federal regulation, which caps
franchise fees at 5%. The Ordinance would establish the authority to implement a PEG Fee of
1% consistent with State regulation. The 1% Fee would be effective July 1, 2012.
Even with the limitations of capital expenditure on current PEG Fees, these potential additional
revenues will be important in the future as it becomes more and more necessary to repair or
replace the aging equipment used by IT and Communications to provide PEG programming such
as Council meeting broadcasts and to maintaining adequate emergency alert and override
systems. These revenues also play a critical role in leveraging any potential for future expansion
of the City's video/cable communication with residents and businesses as we transition into a
more digital environment where, visual and virtual communication become the minimum
standard in public service and communication. Some jurisdictions use locally developed PEG
programming to market Pet adoption opportunities from the local animal shelter, provide
public safety, educational and special event programming. Southwestern College has provided
courses in the past to obtain a "producer's' certificate that provides citizens with a background
in State and local regulations regarding the content and broadcasting requirements, and
opportunities for local PEG channel programming. At one time cities or cable video providers
also provided equipment to qualified local citizens to produce PEG content. The proposed 1%
PEG fee can provide the revenue to fund the capital costs for up to 3 PEG channels. Each
channel must consistently provide a minimum of 56 hours of "locally produced programming,"
including items like the broadcast of Council meetings. Section 5870 (b) does provide that
"advertising, underwriting, or sponsorship recognition may be carried on the channels for the
purpose of funding PEG-related activities."
Customer Service Penalties Under State Video Franchise
DIVCA also provides that the holder of a State video franchise shall comply with all applicable
State and Federal customer service and protection standards pertaining to the provision of
video service. State regulation provides the local jurisdiction with responsibility for monitoring
and enforcing those customer service standards. The City Manager's designee, currently the
Director of Economic Development shall monitor a State video franchise holder's compliance
with State and Federal customer service and protection standards. Per State regulation, the City
will provide to the State video franchise holder written notice of any material breaches of
applicable customer service and protection standards, and will allow the State video franchise
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holder 30 days from receipt of the notice to remedy the specified material breach. Under the
proposed Ordinance, material breaches not remedied within the 30-day time period would be
subject to the following monetary penalties to be imposed by the City. The range of the fines
are established by the California Public Utilities Code Section 5900.(d). The "up to" provision at
each incremental level of fine was added by staff to provide a broader range of tools to create
an incentive for compliance and place the emphasis on customer service, not the monetary
limits of the fines. The proposal is to adopt the fines established by the State with that addition
as follows:
1. For the first occurrence of a material breach, a monetary penalty of up to $500 shall be
imposed for each day of each material breach, not to exceed $1,500 for each violation.
2. For a second material breach of the same nature within twelve months, a monetary penalty
of up to $1,000 shall be imposed for each day of each material breach, not to exceed $3,000
for each violation.
3. For a third or further material breach of the same nature within twelve months, a monetary
penalty of up to $2,500 shall be imposed for each day of each material breach, not to
exceed $7,500 for each violation.
A State video franchise holder may appeal a monetary penalty assessed by the City.
Such appeal must be filed no later than 30 days after the date of mailing of notification
of the penalty or the right to appeal shall be deemed waived. After relevant evidence
and testimony is received, and staff reports are submitted, the City Council will vote to
either uphold or vacate the monetary penalty. The City Council's decision is subject to
de novo judicial review. De Novo means, "anew," or "afresh" meaning the court
considers the case without consideration of the previous finding.
The proposed penalties and cure process reflect those referenced by the California Public
Utilities Commission in DIVCA.
nr~r Response to State Video Franchise Applications
Applicants for State video franchises within the boundaries of the City must by State regulation
concurrently provide to the City complete copies of any application or amendments to
applications filed with the California Public Utilities Commission. One complete copy must be
provided to the City Clerk and City Manager. The City will provide any appropriate comments to
the California Public Utilities Commission regarding an application or an amendment to an
application for a State video franchise.
DECISION MAKER CONFLICT
Staff has reviewed the decisions contemplated by this item and have determined that the
actions contemplated are not site-specific and, consequently, the 500-foot rule found in
California Code of Regulations section 18704.2(a) is not applicable.
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CURRENT YEAR FISCAL IMPACT
Residents and businesses would likely see a 1% increase on the cable/video portion of their
communications bills when the PEG Fee is established, as service providers have the option, but
not the obligation to pass the PEG Fee on to consumers. The use of these PEG fee revenues are
currently limited to capital associated with the development and broadcasting of PEG
programming and not available for related personnel or general fund expenses. If the PEG Fee
were triggered and implemented 60 day after the ordinance becomes effective, staff estimates
that the PEG Fee generated for the upcoming fiscal year 2012/13 would be approximately
$600,000.
ONGOING FISCAL IMPACT
The equipment used by the City for broadcasting public meetings will need repair or
replacement as it reaches the end of its useful life. Staff expects that to be within the next
calendar year. These funds can be used for costs of purchasing and installing equipment
associated with current or future PEG programming and without these funds general fund
revenue or reserves would have to be appropriated to maintain or expand the capital
components of these programs. If the PEG Fee were established at the beginning of the next
fiscal year, staff estimates that the PEG Fee would generate up to $600,000. If HR 3745 or
similar Congressional legislation authorizes the use of these funds for operational purposes
associated with PEG programming the City would be able to fund the staff, contract and or
consulting casts associated with developing and broadcasting current public, education and
government programming and any future enhancements the City may choose to pursue.
Attachments:
1. Jurisdictional PEG Fee Survey
2. HR 3745
3. Ordinance No. 2797
Prepared by: Michael T. Meacham, Director of Economic Development
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ATTACHMENT 1
Survey of Local Jurisdictions Adopting DIVCA and
COLLECTION OF PEG (Public, Education and Government) Fees
Jurisdiction
AT&T
COX Time
Warner
Carlsbad Yes N/A Yes
Coronado Yes N/A Receives in-kind PEG fees
Del Mar Yes N/A Yes
EI Cajon No No N/A
Encinitas Yes Yes N/A
Escondido Yes Yes N/A
Imperial Beach Yes Yes N/A
La Mesa Yes Yes N/A
Lemon Grove Yes Yes N/A
National City No No N/A
Oceanside Yes Yes N/A
Poway Yes Yes N/A
San Diego Yes Yes N/A
San Marcos Yes Yes No
Santee No No N/A
Solana Beach Yes Yes Yes
Vista Yes Yes N/A
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ATTACHMENT 2
CAP Act (Introduced in House)
HR 3745 IH
I11th CONGRESS
1st Session
H. R. 3745
To aniend the Communications Act of 1934 to provide for carriage and display of public,
educational, and government channels in a manner consistent with commercial channels,
and for otherputposes.
IN THE HOUSE OP REPRESENTATIVES
October 7, 2009
Ms BALDWIN introduced the following bill; which was referred to the Committee on
Energy and Commerce
..... ........ __ A B1LI,
To amend the Communications Act of 1934 to provide for cazriage and display of public,
educational, and government channels in a manner consistent with commercial channels,
and for other purposes
Re it enacted by the Senate and House o~Representatives of the United States ~~
America in Congre+,c assembierl,
SECTION 1.. SHORT' TITLE.
Ibis Act may be cited as the'Communily Access Preservation Act' or the'CAP
Act'
SEC. 2. AMENDMENTS.
(a) In General- Section 611 of the Communications Act of 1934 (47 U S C 531)
is amended--
(1) by redesignating subsection ('f) as subsection (h); and
(2) by inserting after subsection (e) the following new subsections:
(f} Equivalence-
(1) IN GENERAL- In the case ofany ftanchiseunder which channel
capacity is designated under subsection (b), such channel capacity shall
be--
'(A) at least equivalent in quality, accessibility, functionality, and
placement to--
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'(i) channel capacity used for required carnage of Local
commercial television stations, as defined in section
614(h)(1); or
'(ii) if no such stations are required to be carried, the
channel capacity used to carry the primary sibmal of the
network-affiliated commercial television stations carried on
the cable system; and
' (B) provided to and viewable by every subscriber of a cable
system without additional service or equipment charges
'(2) SIGNAL QUALITY AND CONIENT- A cable operator shall--
'(A) carry signals for public, educational, or governmental use
frotn the point of origin of such signals to subscribers without
material degradation and without altering or removing content
provided as part of the public, educational, or governmental use;
and
(B) provide facilities adequate to fulfill such requirements.
'(3) WAIVER- the requsements ofpazagraph (1) may be waived by a
franchising authority if the franchise contains an explicit provision that
such requirements shall not apply and such grovision was adopted after a
proceeding the oonduct of which afforded the public adequate notice and
an opportunity to participate
'(4) ENFORCEMENT- The requirements of this subsection may be
enforced by a franchising authority or by the Commission
'(5) ADD1T IONAL REQUIREMENTS- Nothing in this subsection
prevents a franchising authority from establishing additional requirements
with respect to the quality, accessibility, functionality, placement, and
provision of channel capacity designated fbr public, educational, or
govermmental use
'(g) Preservation of Public, Educational, and Governmental Use-
(1) STUDY- Within 180 days after the date of enactment of the
Community Access Preservation Act, the Commission shall submit to
Congress a report containing--
(A) an analysis of the impact of the enactment of State video
service franchising laws since 2005 on public, educational, and
governmental use of cable systems;
'(B) an analysis of'the impact of the conversion from analog to
digital transmission technologies on public, educational, and
governmental use of cable systems; and
'(C) recommendations for changes required to this Act to preserve
and advance localism and public, educarional, and governmental
use of advanced communications systems.
(2) SUPPORT- In States that adopted legislation affecting cable system
franchising requirements relating to support for public, educational, or
governmental use of a cable system that became effective after May 31,
2005, a cable operator shall, notwithstanding such legislation--
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(A) pay to any political subdivision in which the operator provides
service the greater of--
'(i) the historical support that the operator, or its
predecessor, provided for public, educational, or
governmental use of the cable system in such subdivision
in accordance with this subsection; or
'{ii) the amount of any cash payment that the opezator is
required to pay to such subdivision under such State
legislation affecting cable system franchising requirements;
(B) carry signals for public, educational; or govezmental use
from the point of ozigin of such signals to subscribers and provide
facilities adequate to fulfill such requirements in accordance with
subsection (f)(2); and
(C) provide at least the number of channels for public,
educational, or governmental use that it was providing as of May
31, 2005.
(3) CALCULATION OP HISIORICAL SUPPORI-Historical support
includes the value of all support provided for public, educational, a
governmental use, including in-kind support and flee services the cable
operator shall pay support equal to the greater of--
' (A) the value of the support provided in the most recent calendar
year prior to the effective date of'such State legislation affecting
cable system franchising requirements; or
' (B) the value of the annual average support provided over the
term of the franchise pursuant to which it operated prior to such
effective date; taking into account the time value of money
(4) PAYMENTS- The amounts owed to the political subdivision undez
paragzaph (2)(A) shall be paid annually, in quarterly installments, with the
fast payment being due 30 days after the date of enactment of the
Community Access Preservation Act
'(5) USES; DISPUTES-
'(A) USES- Support provided to any State or local political
subdivision under this subsection shall be dedicated to public,
educational, oz governmental use of channel capacity
(B) DISPUIES- If there is a dispute as to amounts owed under
this subsection, undisputed amounts shall be paid, and the
Commission shall determine on an expedited basis what, if any,
additional amounts are owed.'.
(b) Franchise Fee Definition- Section 622(g)(2) of such Act (47 U S C 542(g)(2);
is amended--
(]) in subparagraph (B), by sViking in the case of any franchise in effect
on the date of the enactment of this title, ;
(2) by striking subparagraph (C); and
(3) by rcdesignating subparagraphs (D) and (E) as subparagraphs (C) and
(D), respectively.
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(c) Cable Service Definition- Section 602(6) of such Act (47 U S C 522(6)) is
amended by striking means' and inserting 'means, regardless of the technology or
transmission protocol used in the provision of'service'
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ATTACHMENT 3
ORDINANCE NO. 2797
AN ORDINANCE OF THE CITY OF CHULA VISTAAMENDING
SECTION 5.52.010 OF THE CHULA V1STA MUNICIPAL CODE
TO CONFORM THE FEES ASSESSABLE TO CABLE
FRANCHISEES AND OTHER VIDEO PROGRAMMING
PROVIDERS TO THOSE ALLOWED BY STATE AND FEDERAL
LAW
The City Council of the City of Chula Vista does hereby ordain as follows:
SECTION is That Section 5,52.010 of the Chula Vista Municipal Code is hereby amended to read
as follows:
5.52.010 Annual payments to city required.
All persons engaged in the business of transmitting, by means of the lease of a frequency or
frequencies from the grantee or grantees of community antenna television systems, or by use of a
cable systems, a signal or transmission providing a television picture or other video, audio or data
services to subscribers thereof in the City of Chula Vista for the payment of a fee shall pay the city
annually, in lawful money of the United States, afranchise/right-of--way access fee equal to a
percentage of its gross receipts in an amount determined by the City Council through a negotiated
franchise agreement or by independent City Council action. The current fee shall be set at five
percent of the service provider's gross receipts but may be modified in a negotiated agreement. In
no event shall a fee charged hereunder exceed the maximum fee allowable by applicable federal or
state law. Such fees shall apply regardless of whether a party providing such services(s) has a fixed
place of business within the city. Li any case in which a person transmitting a signal providing a
television picture or other service to subscribers thereof is not subject to a local franchise but is, per
applicable laws, subject to in-lieu or other fees payable to the local franchising authority for use of
right-of--way or for other lawful consideration or purpose, said person shall pay to the City annually,
in lawful money of the United States, an in-lieu tee equivalent to the franchise fee in effect under this
section.
SECTION II: This ordinance shall take effect and be in fill force on the thirtieth day from and after
its second reading and adoption.
Presented by
Approved as to form by
Michael Meacham -~
Special Projects Manager
~iw
t M. Kaheny
ity Attorney
Ordinance 2797
Page 2
PASSED, APPROVED, and ADOPTED by the City Council of the City of Chula Vista,
California, this 21" day of September, 1999, by the following vote:
AYES: Councilmembers: Davis, Moot, Padilla, Salas and Horton
NAYS: Councilmembers: None
ABSENT: Councilmembers: None
Shirley Hgf~on, Mayor
ATTEST:
~~~~
Susan Bigelow, City Clerk
STATE OF CALIFORNIA )
COUNTY OF SAN DIEGO )
CITY OF CHULA VISTA )
I, Susan Bigelow, City Clerk of Chula Vista, California, do hereby certify that the foregoing
Ordinance No.2797 had its first reading at a regular meeting held on the 14"' day of September, 1999,
and its second reading and adoption at a regular meeting of said City Council held on the 21" day of
September, 1999.
Executed this 21"day of September, 1999
Susan Bigelow, City Clerk
ORDINANCE NO.
ORDINANCE OF THE CITY OF CHULA VISTA AMENDING
CHULA VISTA MUNICIPAL CODE CHAPTER 5.52, "PAY
TELEVISION," AND ADDING CHAPTER 5.53, "STATE
VIDEO FRANCHISES" IN ACCORDANCE WITH THE
CALIFORNIA DIGITAL INFRASTRUCTURE AND VIDEO
COMPETITION ACT OF 2006
WHEREAS, the State of California enacted the Digital Infrastructure and Video
Competition Act ("DIVCA") in 2006 (California Public Utilities Code sections 5800, et seq.);
and
WHEREAS, DIVCA establishes a regulatory structure for the State to issue franchises to
video service providers who seek to provide video service in a local jurisdiction, whether they
already hold local franchises, or are new providers; and
WHEREAS, DIVCA requires a provider who holds astate-issued franchise to remit 5%
of gross revenues to the local entity; and
WHEREAS, DIVCA requires a state franchise holder to designate a sufficient amount of
capacity on its network to allow the provision of at least three Public, Educations and
Governmental ("PEG") access channels and requires the franchise holder to pay a fee, if
established by ordinance of the local entity, to support PEG channel facilities; and
WHEREAS, DIVCA requires the City to: (i) either approve or deny an application for a
permit relating to construction or operation of DIVCA facilities within 60 days; (ii) furnish a
detailed explanation to the applicant of a decision to deny a permit; and (iii) adopt regulations
prescribing procedures for an applicant to appeal the denial to the City Council; and
WHEREAS, DIVCA requires the City to enforce the DIVCA customer service and
protection standards with respect to complaints received from City residents and adopt a
schedule of penalties for material breach by a state franchise holder of the customer service
standards specified in DIVCA; and
WHEREAS, the proposed ordinance would amend Title 5 of the Chula Vista Municipal
Code, "Cable, Video and Telecommunications Service," consistent with the provisions of
DIVCA.
NOW THEREFORE BE IT ORDAINED THAT THE City of Chula Vista does hereby
find and determine that:
Section 1. Chapter 5.52 of the Chula Vista Municipal Code is hereby amended as follows:
1. Replace the Chapter title in its entirety with the following: "Cable, Video, and
Telecommunications Service Providers."
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Ordinance No.
Page 2
2. Add Section 5.52.050, entitled "State Franchises," at the end of the Chapter to read as
follows:
"The Digital Infrastructure and Video Competition Act of 2006 ("DIVCA"), codified
in California Public Utilities Code Sections 5800, et seq., took effect on January 1,
2007. Chula Vista Municipal Code Chapter 5.53 was adopted in accordance with
DIVCA. To the extent that a service provider obtains a state franchise in accordance
with DIVCA, the terms of DIVCA and Chapter 5.53 shall govern and shall be the
controlling authority over this Chapter."
Section 2. Chapter 5.53 is added to the Chula Vista Municipal Code to implement the
provisions of the Digital Infrastructure and Video Competition Act of 2006 (California Public
Utilities Code Sections 5800, et seg. ), to read as follows:
"STATE VIDEO FRANCHISES
Sections:
5.53.010 Purpose.
5.53.020 Public Interest.
5.53.030 Franchise Requirement.
5.53.040 PEG Channels and Fee.
5.53.050 Franchise Fee.
5.53.060 Late Fee.
5.53.070 Authority to Examine Records.
5.53.080 Customer Service Penalties Under State Video Franchises.
5.53.090 City Response to State Video Franchise Applications.
5.53.100 Interconnection.
5.53.110 Emergency Alert System and Emergency Overrides.
5.53.120 Encroachment Permits.
5.53.010 Purpose.
This Chapter is adopted to regulate video service providers holding state video
franchises and operating within the City of Chula Vista pursuant to the Digital
Infrastructure and Video Competition Act of 2006 ("DIVCA"), codified at California
Public Utilities Code Sections 5800, et seq. This Chapter shall be construed in a manner
consistent with DIVCA and the rules promulgated under DIVCA by the California Public
Utilities Commission.
5.53.020 Public Interest.
The full deployment of a robust wired and wireless digital infrastructure, and
public, educational and governmental access serves a vital and compelling public interest
of the City and promotes the public health, safety and welfare of the City. The
encouragement of the development of wired and wireless digital infrastructure with
public access within the City serves a vital and compelling public interest of the City.
That public interest includes but is not limited to being a critical component of the future
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Ordinance No.
Page 3
prosperity and communication demands for a vibrant local business, educational and
healthcare system, as well as access to an open and transparent government in the digital
age. In addition, the City's participation in ensuring the development and maintenance of
state of the art infrastructure, public access, customer service standards and an emergency
broadcast system serves the public interest by ensuring that such development will reflect
the needs and objectives of the community more so than if such development and
maintenance were undertaken without City participation.
5.53.030 Franchise Requirement
A. Any person or corporation who seeks to provide video service in the City,
who is not already providing service pursuant to Chapter 5.52, must first obtain astate-
issued franchise.
B. This Chapter shall apply to all video service- providers holding state-
issued franchises to operate within the City, including those who previously held local
franchises and subsequently obtained state-issued franchises.
C. A video service operator who obtains astate-issued franchise must notify
the City that it will be providing service pursuant to that franchise, at least ten days prior
to beginning to offer service in the City.
5.53.040 PEG Channels and Fee.
A. Canacity Desi nag tion. A state video franchise holder that uses the public
rights-of--way shall designate sufficient capacity on its network to enable the carriage of
at least three public, educational, and governmental ("PEG") access channels. These
channels shall comply with all DIVCA requirements, including but not limited to the
following:
1. PEG access channels shall be for the exclusive use of the City or its designees to
provide public, educational, or governmental programming.
2. Advertising, underwriting, or sponsorship recognition may be carried on the PEG
access channels for the purpose of funding PEG-related activities.
3. The PEG access channels shall be carried on the basic service tier and shall be of
similar quality and functionality to that offered by commercial channels on the
lowest cost tier of service unless the signal is provided to the video service
provider at a lower quality or with less functionality, as provided in subsection
(g)(3) of section 5870 of the California Public Utilities Code.
4. 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 channels shall be the same channel numbers used by the
incumbent cable operator unless prohibited by federal law.
5. After the initial designation of PEG access channel numbers, the channel numbers
shall not be changed without the prior written consent of the City, unless the
change is required by federal law.
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6. Each PEG access channel shall be capable of carrying a National Television
System Committee television signal, as provided in Public Utilities Code section
5870(b).
B. Fee for Support of Local Cable Usage. A fee paid to the City is hereby
established for the support of PEG channel facilities consistent with state and federal law.
This fee shall be the maximum amount allowed by law, which is currently one percent
(1%) of a state video franchise holder's gross revenues, as defined in California Public
Utilities Code Section 5860 (the "PEG Fee"). The PEG Fee shall be remitted quarterly to
the City Treasurer and must be received not later than 45 days after the end of the
preceding quarter. The PEG Fee payment shall be accompanied by a summary that
explains the basis for the calculation of the PEG Fee for local cable usage. This PEG Fee
shall commence on July 1, 2012. The City Council may decrease or increase the amount
of the PEG Fee, up to the maximum amount allowed by law, by resolution.
5.53.050. Franchise Fee.
In addition to the PEG Fee in section 5.53.040.B., above, a State video franchise
holder operating in the City shall pay to the City a franchise fee that is equal to five
percent (5%) of the gross revenues of that State video franchise holder. The term "gross
revenues" shall be defined as set forth in Public Utilities Code section 5860. This fee
shall be remitted quarterly to the City Treasurer and must be received not later than 45
days after the end of the preceding calendar quarter. The fee payment shall be
accompanied by a summary that explains the basis for the calculation of the franchise fee.
Unless construed otherwise by applicable law, the phrase "summary that explains the
basis for the calculations," as used herein and above in section 5.53.040.B., means the
identification of the sources of revenue upon which the fee is based.
5.53.060 Late Fee.
In the event a state video franchise holder does not pay the fees required by this
chapter when due, the 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 1 percent.
5.53.070 Authority to Examine Records.
Not more than once annually, the appropriate City department may examine the
business records of a holder of a state video franchise to ensure compliance with Sections
5.53.040 and 5.53.050.
5.53.080 Customer Service Penalties Under State Video Franchises.
A. The holder of a state video franchise shall comply with the provisions of
California Government Code sections 53055, 53055.1, 53055.2 and 53088.2; 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 California Penal Code
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section 637.5; the privacy standards of United States Code, Title 47, section 551; and all
other applicable State and Federal customer service and protection standards pertaining to
the provision of video service.
B. The City shall enforce, in the manner set forth in DIVCA, all customer
service and protection standazds contained in DIVCA section 5900, as may be amended
from time to time.
C. The City Manager, or designee, will provide to the State video franchise
holder written notice of any material breaches of applicable customer service and
protection standards, pursuant to DIVCA section 5900. The City will allow the State
video franchise holder 30 days from receipt of the notice to remedy the specified material
breach. Material breaches not remedied within the 30-day time period will be subject to
monetary penalties to be imposed by the City and assessed by the City Manager, or
designee, up to the amounts set forth below:
1. For the first occurrence of a material breach, a monetazy penalty up to $500 shall
be imposed for each day of each material breach, not to exceed $1,500 for each
material breach.
2. For a second material breach of the same nature within twelve months for which
the City previously provided notice, a monetary penalty up to $1,000 shall be
imposed for each day of each material breach, not to exceed $3,000 for each
material breach.
3. For a third or further material breach of the same nature within twelve months, a
monetazy penalty up to $2,500 shall be imposed for each day of each material
breach, not to exceed $7,500 for each material breach.
D. A State video franchise holder may appeal a penalty assessed by the City
Manager to the City Council. An appeal must be submitted in writing to the City Clerk
within 60 days after notice of the penalty is sent to the assessed franchise holder, or the
right to appeal shall be deemed waived. An appeal must detail the reasons why the
appellant believes the imposition of penalties is inconsistent with DIVCA. 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.
5.53.90 City Response to State Video Franchise Applications.
A. Applicants for state video franchises within the boundaries of the City
must concurrently provide to the City complete copies of any application or amendments
to applications filed with the California Public Utilities Commission. One complete copy
must be provided to the City Clerk for distribution to the City Manager and City
Attorney.
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B. The City will provide any appropriate comments to the Califomia Public
Utilities Commission regarding an application or an amendment to an application for a
state video franchise.
5.53.100 Interconnection. Where technically feasible, a state video franchise holder and an
incumbent cable operator shall negotiate in good faith to interconnect their networks for
the purpose of providing PEG access channel programming. Interconnection may be
accomplished by direct cable, microwave link, satellite, or other reasonable method of
connection. State video franchise holders and incumbent cable operators shall provide
interconnection of the PEG access cannels on reasonable terms and conditions and may
not withhold the interconnection. If a state video franchise holder and an incumbent
cable operator cannot reach a mutually acceptable interconnection agreement, the City
may require the incumbent cable operator to allow the state video franchise holder to
interconnect its network with the incumbent's network at a technically feasible point on
the holder's network as identified by the holder. If no technically-feasible point for
interconnection is available, the state video franchise holder shall make an
interconnection available to the channel originator and shall provide the facilities
necessary for the interconnection. The cost of any interconnection shall be borne by the
state video franchise holder requesting the interconnection unless otherwise agreed to by
the parties.
5.53.110 Emergency Alert System and Emergency Overrides. A state video franchise
holder must comply with the Emergency Alert System requirements of the Federal
Communications Commission in order that emergency messages may be distributed over
the holder's network.
5.53.120 Encroachment Permits.
A. As provided in DIVCA section 5885, the City shall either approve or deny an
application from a state video service franchise holder for an encroachment permit within
sixty days of receiving a completed permit application. An application will not be
considered complete until the applicant has complied with all statutory requirements,
including California Public Utilities Code sections 21000, et seq. (the California
Environmental Quality Act), the Chula Vista Municipal Code, and other applicable City
ordinances.
B. For purposes of this section, "encroachment permit" means any permit issued by
the City for construction or operation of facilities pursuant to DIVCA.
C. If the City denies an application for an encroachment permit, it will provide the
applicant a detailed explanation of the reason for the denial. The applicant may appeal the
denial in the manner established in section 15.04.260 of this Municipal Code.
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Section 3. Severability. If any section, subsection, sentence, clause, phrase or word of this
ordinance is for any reason held to be invalid of unconstitutional by a court of competent
jurisdiction, such decision shall not affect the validity of the remaining portions of the ordinance.
Section 4. Effective Date This ordinance will take effect and be in force thirty days after its
final passage.
Presented by
Approved as to form by
~~
v
Michael T. Meacham, Director Glen R: Qioogin~~it'y Attorney
Economic Development Director ity Atkodney
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