Chapter 13.08 CABLE TELEVISION AND OPEN VIDEO SYSTEMS—AWARD OF FRANCHISES BY THE CITY COUNCIL*

* Code reviser’s note: Ord. 569, Section 8 states: “When the date set forth in Section 13.08.600C of the Atherton Municipal Code occurs, Chapter 13.08 of Title 13 of the Atherton Municipal Code shall be repealed in its entirety.”

13.08.010 Definitions.

For the purposes of this chapter, the following words, terms, phrases, and abbreviations and their similar formulations shall have the meanings given them in this chapter, unless the context indicates otherwise. Words not defined in this chapter or other chapters of the Atherton Municipal Code shall have the same meaning as established in Title VI of Title 47 of the United States Code, and, if not defined therein, their common and ordinary meaning. References to governmental entities (whether persons or entities) shall refer to those entities or their successors in authority. If a specific provision of law referred to in this chapter should be renumbered, then the reference shall be read to refer to the renumbered provision. References to any law shall be interpreted broadly to cover government actions, however nominated, including any law now in force or subsequently enacted or amended.

“Access,” “PEG access,” or “PEG use” means the availability of a cable system or open video system for public, educational or governmental use (including institutional network use) by various agencies, institutions, organizations, groups, and individuals, including the city and its designated access providers, to acquire, create and distribute programming not under a franchisee’s editorial control, including, but not limited to:

1. “Public access” or “public use” means access where organizations, groups or individual members of the general public, on a nondiscriminatory basis, are the primary or designated programmers or users having editorial control over their programming;

2. “Educational access” or “educational use” means access where accredited educational institutions are the primary or designated programmers or users having editorial control over their programming; and

3. “Governmental access” or “governmental use” means access where government institutions or their designees are the primary or designated programmers or users having editorial control over their programming.

“Affiliate” means a person that, directly or indirectly, owns or controls, is owned or controlled by, or is under common ownership or control with, another person.

“Basic service” means any service tier regularly provided to all subscribers, which includes the retransmission of one or more local television broadcast signals.

“Cable Act” means the Cable Communications Policy Act of 1984, 47 U.S.C. §§ 521 et seq., as amended by the Cable Television Consumer Protection and Competition Act of 1992, Pub. L. No. 102-385, 106 Stat. 1460, and as further amended by the Telecommunications Act of 1996, Pub. L. No. 104—104, 110 Stat. 56.

“Cable communications system” or “system” means both open video systems and cable systems.

“Cable coordinator” means the individual or individuals designated by the city to administer a cable communications system franchise. Unless otherwise provided by resolution of the council, the city manager shall act as cable coordinator.

“Cable system” means a facility, consisting of a set of closed transmission paths and associated signal generation, reception, and control equipment that is designed to provide cable service, including video programming, that is provided to multiple subscribers within a community, but such term does not include:

1. A facility that serves only to retransmit the television signals of one or more television broadcast stations;

2. A facility that serves subscribers without using, or connecting to a facility that uses, any portion of the public rights-of-way within the city;

3. A facility of a common carrier which is subject, in whole or in part, to the provisions of Title II (Common Carriers) of the Communications Act of 1934, except that such facility shall be considered a cable system to the extent such facility is used in the transmission of video programming directly to subscribers, unless the extent of such use is solely to provide interactive on-demand services;

4. Any facility of an electric utility used solely for operating its electric utility systems; or

5. An OVS that is certified by the FCC.

Any reference to a cable system includes the cable system as a whole or any part thereof, including, but not limited to, pedestals, equipment cabinets, electronic equipment, amplifiers, power guards, nodes, cables, fiber optics and other equipment necessary or useful to operate the system and devices appurtenant to the cable system.

“Cable service” means:

1. The one-way transmission to subscribers of (i) video programming, or (ii) other programming service; and

2. Subscriber interaction, if any, which is required for the selection or use of such video programming or other programming service.

“Cable modem” means a device used to transmit data over a cable communications system.

“Cable modem service” means Internet access service provided by an operator or its affiliates over a cable communications system. “Cable modem services” does not include “dial-up” access to the Internet services of the operator or its affiliates.

“Channel” means a portion of the electromagnetic frequency spectrum which is used in a cable system or an open video system and which is capable of delivering a television signal whether in an analog or digital format. The definition does not restrict the use of any channel to the transmission of analog television signals.

“City” means the government of the town, a general law city and a municipal corporation duly organized and validly existing under the laws of the state, and all departments, divisions, and offices thereof.

“City attorney” means the individual who is designated as the city attorney of the city under Chapter 2.16 of Title 2 of the Atherton Municipal Code, and any individual who is designated as the representative of the city attorney.

“City clerk” means the individual who is designated by the council as the city clerk of the city, and any individual who is designated as the representative of the city clerk.

“City manager” means the individual who is designated by the council as the city manager of the city, and any individual who is designated as the representative of the city manager.

“Construction, operation, maintenance or repair” or “construction, operation, maintenance and repair” or words of similar import means the named actions interpreted broadly, encompassing, among other things, installation, extension, maintenance, replacement of components, relocation, undergrounding, grading, site preparation, adjusting, testing, make-ready, and excavation.

“Council” means the council of the town exercising all powers necessary and appropriate pursuant to Chapter 2.04 of Title 2 of the Atherton Municipal Code.

“Director of public works” means the individual who is designated by the council as the director of public works of the city, and any individual who is designated as the representative of the director of public works.

“Director of utilities” means the individual who is designated by the council as the director of utilities of the city, and any individual who is designated as the representative of the director of utilities. In the absence any other designation by the city council, the city manager shall act as director of utilities.

“Downstream channel” means a channel designed and activated to carry a transmission from the headend to other points on a cable communications system, including interconnections.

“FCC” means the Federal Communications Commission.

“Franchise” means an authorization granted by the city to the operator of a cable communications system giving the operator the nonexclusive right to occupy the space, or use facilities upon, across, beneath, or over public rights-of-way in the city to provide cable communications services therein.

“Franchise area” means the area of the city that a franchisee is authorized to serve by the terms of its franchise or by operation of law.

“Franchisee” means a person holding a cable communications system franchise granted by the city.

“Gross revenues” mean any and all revenue of a “cable operator” (as defined in the Cable Act), of any kind, nature or form, without deduction, derived from the operation of a cable communications system to provide cable service. “Gross revenues” shall be construed as broadly as permitted by the Cable Act and any other applicable law. By way of example and not limitation, “gross revenues” include, but are not limited to, revenues from basic service, cable programming services, any per-channel or per-program services, equipment sales and rentals, cable modem services, installation services, disconnection services, reconnection services, late fees and other subscriber charges, and revenues from the carriage of programming, advertising, and shopping services. “Gross revenues” are construed to include revenues of affiliates (other than those revenues which are already treated as the revenues of the franchisee), to the full extent necessary to prevent the avoidance of any and all fees owed on gross revenues. “Gross revenues” do not include: (1) the revenue of any person, including, without limitation, an affiliate or a provider of videoprogramming services to a cable communications system operator, to the extent that the revenue is included in the gross revenue of that operator; (2) taxes imposed by law on subscribers by a taxing authority, which taxes a cable communication system operator is obligated to collect and remit to the taxing authority, provided, however, that neither the fees imposed by Sections 13.08.250 and 13.08.350 of the Atherton Municipal Code, nor any tax or fee imposed on the operator (as opposed to the subscriber) shall be deemed to be such a tax; (3) any gains realized on the sale or disposition of capital assets and other tangible property of the operator; and (4) bad debts, provided, however, that the recovery of bad debts are included in gross revenues to the extent that such bad debts are subsequently collected.

“Headend” means a combination of equipment at a location within a cable communications system where signals are received and processed for distribution to other points on the cable communications system.

“Hertz” means a measure of the electromagnetic frequency spectrum.

“Internet” means the myriad of facilities, including, but not limited to, computer equipment and software, comprising the interconnected networks that employ the TCP/IP, or any predecessor or successor protocols to TCP/IP, to communicate information.

“Internet service provider” means a person, including, but not limited to, an operator of a cable communications system, who provides access to the Internet, or who otherwise furnishes a service that enables users to gain access to other services or offerings over the Internet.

“Law” means any administrative, legislative or judicial act, decision, bill, certificate, charter, code, constitution, opinion, order, ordinance, policy, procedure, rate, regulation, resolution, rule, schedule, specification, statute, tariff, or other requirement of any federal, California, state, regional, county, municipal, local, or joint powers agency, or any other agency having joint or several jurisdiction over the city, a franchisee or an operator, including, but not limited to, any regulation or order of an official or quasi-official entity or body, now in force or hereinafter amended from time to time.

“MHz” means one million Hertz.

“Node” means a point of communication in a network where signals carried on cable are converted to electrical signals for carriage on other cable.

“Operator”, when used with reference to a system, means a person (1) who directly or through one or more affiliates provides cable service over a cable communications system and directly or through one or more affiliates owns a significant interest in such facility, or (2) who otherwise controls or is responsible for, through any arrangement, the management and operation of a cable communications system.

“Open video system” or “OVS” means a facility, consisting of a set of closed transmission paths and associated signal generation, reception, and control equipment that is designed to provide cable service, including video programming, that is provided to multiple subscribers within a community, including, but not limited to, pedestals, equipment enclosures (such as equipment cabinets), amplifiers, power guards, nodes, cables, fiber optics and other equipment necessary to operate the OVS, or installed in conjunction with the OVS, the operator of which has been certified by the FCC as an OVS in the city.

“OVS franchise” means a contract entered into in accordance with this chapter between the city and an OVS franchisee setting forth the terms and conditions under which the OVS franchise will be exercised.

“Person” means and includes any individual, corporation, partnership, association, joint stock company, trust, or any other legal entity, but not the city.

“Public rights-of-way” means the surface of and the space above and below any street, road, highway, bridge, lane, path, alley, court, sidewalk, parkway, drive, or right-of-way or easement primarily dedicated to travel, now or hereafter existing within the city which may be properly used for the purpose of installing, constructing, operating, maintaining, and repairing a cable communications system; and any other property that a franchisee is entitled by California or federal law or use by virtue of the grant of a franchise.

“Public property” means any property that is owned or under the control of the city that is not located in the public rights-of-way, including, for purposes of this chapter, but not limited to, buildings, parks, and pole structures, such as utility poles and light poles, or similar facilities or property owned by or leased to the city.

“School” means any accredited primary school, secondary school, college, and university.

“SEC” means the Securities and Exchange Commission.

“Subscriber” or “customer” means the city or any person who is lawfully receiving, for any purpose or reason, any cable service by means of a cable communications system, whether or not a fee is paid for such service.

“TCP/IP” means the Transmission Control Protocol/Internet Protocol, a set of protocols to link computer and/or other networks.

“Upstream channel” means a channel designed and activated to carry transmissions from a point on the cable system, other than the headend, to the headend or another point on the cable system.

“User” means the city or a person using a channel, capacity or equipment and facilities for purposes of producing or transmitting material, as contrasted with the receipt thereof in the capacity of a subscriber. (Ord. 515 § 1 (part), 2000)

13.08.020 Nature of franchise.

A. The council may grant one or more nonexclusive, revocable franchises to construct, operate, maintain and repair a cable communications system in the city. A franchise granted by the council pursuant to this chapter shall authorize and permit a franchisee to construct, operate, maintain and repair a cable system, or an OVS, as applicable, to provide cable service in the franchise area, and for that purpose to erect, install, construct, repair, replace, reconstruct, and maintain facilities appurtenant to such system in, on, over, under, upon, across, and along those public rights-of-way that the city may authorize a franchisee to use.

B. No person may construct, operate, maintain or repair a cable communications system in the city without first obtaining a franchise therefor.

C. A franchise shall not convey rights other than as specified in this chapter, or in a franchise agreement; no rights shall pass by implication.

D. A franchise shall not include, or be a substitute for:

1. Compliance with requirements for the privilege of transacting and carrying on a business within the city, including, but not limited to, compliance with the conditions that the city may establish before facilities may be constructed for, or providing noncable services;

2. Any permit, agreement or authorization, other than the authorization required by Section 13.08.020A, required in connection with operations on or in public rights-of-way or public property, including, but not limited to, encroachment permits, pole attachment permits and street cut permits; and

3. Any permit, agreement or authorization for occupying any other property of the city or private entities to which access is not specifically granted by the franchise.

E. A franchise shall not relieve a franchisee of its duty to comply with all laws, including laws of the city, and every franchisee shall comply with the same. The rights granted under a franchise are subject to the exercise of police and other powers the city now has or may later obtain, including, but not limited to, the power of eminent domain. Every franchise issued by the city shall be deemed to incorporate the requirements of the Charter.

F. A franchise shall not convey title, equitable or legal, in the public rights-of-way, and the rights granted therein may not be subdivided or subleased.

G. No franchise shall be exclusive, or prevent the city from issuing other franchises or authorizations, or prevent the city from itself constructing, operating, maintaining or repairing its own cable communications system, with or without a franchise.

H. Every franchise shall be for a term of years, which term shall be not less than five years, unless a franchise specifies otherwise.

I. Unless specifically stated otherwise in a franchise or required by law, all acts, which a franchisee is required to perform under a franchise or applicable law, shall be performed at the franchisee’s expanse.

J. If an operator of a cable communications system fails to perform work that it is required to perform within the time provided for performance, the city may perform or cause the performance of the work and bill the operator therefor. The operator shall pay the amounts billed within thirty days, unless a franchise specifies otherwise.

K. Every franchise shall be issued and adopted by the council in the form of a separate ordinance or resolution and a franchise agreement entered into by the city and the franchisee, who shall accept the franchise. (Ord. 515 § 1 (part), 2000)

13.08.030 Administration and regulations.

A. The city may from time to time adopt rules and regulations to implement the provisions of this chapter. This chapter, and any rules and regulations adopted pursuant thereto, are not contracts with any franchisee, and may be amended at any time.

B. The cable coordinator is authorized to administer this chapter and any franchise issued pursuant thereto, 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 chapter or a franchise, or under applicable law.

C. The failure of the city, upon one or more occasions, to exercise a right or to require compliance or performance under a franchise 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.

D. The city may designate one or more entities, including itself, to control and manage the use of public, educational and governmental access channels, facilities and equipment. (Ord. 515 § 1 (part), 2000)

13.08.040 Transfers.

A. Every franchise shall be deemed to be held in trust, and to be personal to the franchisee. Any transfer that is made without the prior written approval of the city shall be deemed to impair that trust. A transfer is any transaction pursuant to which:

1. A cable communications system, or any part thereof, is sold or assigned, directly or indirectly, to any person other than the franchisee holding a franchise for that system (except the term does not include the sale of portions of a cable communications system that are removed);

2. Any change, acquisition, or transfer of control of a franchisee or its direct or indirect parents, whether by merger, consolidation, a sale of assets or ownership interests, or by any other means, occurs. A transfer occurs whenever there is a change, acquisition or transfer of control of more than a ten percent ownership in the outstanding voting securities or more than a twenty percent ownership in the outstanding non-voting securities of the franchisee or its direct or indirect parents by any entity, or a group of entities acting in concert. However, a transfer also occurs whenever there is a change in actual working control, in whatever manner exercised, over the affairs of a franchisee or its direct or indirect parents. Without limiting the above, any change in the general partners of a franchisee will be presumed a change in control; or

3. The rights or obligations held by the franchisee under its franchise are transferred, sold, assigned, or leased, in whole or in part, directly or indirectly, to another party.

B. Notwithstanding any other provision of this chapter, pledges in trust, hypothecations, encumbrances, leases, or mortgages of the assets of a cable communications system to secure indebtedness may be made without application and without the city’s prior written consent, unless a franchise specifies otherwise. However, no such arrangement may be made if it would in any respect under any condition: (1) prevent the cable communications system or any successor from complying with the franchise or applicable law; or (2) permit a third party to succeed to the interest of the franchisee, or to own or control the system, without the prior written consent of the city. Any mortgage, pledge, hypothecation, encumbrance or lease shall be subject to and subordinate to the rights of the city, as appropriate, under any franchise, this chapter, or other applicable law.

C. The successors and assigns of the franchisee shall be fully bound by the terms and conditions of the franchise. (Ord. 515 § 1 (part), 2000)

13.08.050 Construction, operation, maintenance and repair.

A. The construction, operation, maintenance and repair of cable communications systems shall be performed in compliance with all laws and practices affecting such system. This shall include, but not be limited to, zoning and safety codes, construction standards, regulations for providing notice to persons that may be affected by such system construction, and such directives governing the time, place and manner in which facilities may be installed in the public rights-of-way. Any person engaged in the construction, operation, maintenance or repair of communications facilities shall exercise reasonable care in the performance of all of its activities and shall use commonly accepted methods and devices for preventing failures and accidents that are likely to cause damage, injury, or nuisance to the public or to property.

B. A franchise shall be required before a permit may be issued for work associated with the construction of a cable communications system. Any permit issued for such work to a person that does not hold a franchise shall vest no rights in the permittee; the permit may be revoked at will, and the permittee shall remove all facilities installed under the permit upon demand of the city.

C. The construction, operation, maintenance and repair of a cable communications system shall not commence until the required permits have been obtained from the proper city officials and the required fees have been paid. All work will be performed in strict accordance with the conditions of the permits. Upon the receipt of written notice of the director of public works or the director of utilities, as applicable, any work and/or construction undertaken that is not completed in compliance with the city’s requirements and other applicable laws, or which is installed without obtaining necessary permits and approvals, shall be removed or caused to be removed by the franchisee.

D. Interference with the use of the public rights-of-way by others, including others that may be installing cable communications systems, must be minimized. The city may require a person using the public rights-of-way to cooperate with others through joint trenching and other arrangements to minimize adverse impacts on the public rights-of-way and public property.

E. Unless it is impracticable, operators of cable communications systems shall use existing poles and conduit. Any person in the public rights-of-way may not install additional poles, nor may vertical or horizontal extenders be used to increase pole capacity, without the permission of the director of public works and the director of utilities and/or any other individual(s) authorized by law to grant such permission.

F. Whenever the facilities of all existing utilities are located or are required to be relocated underground in an area in the city, every franchisee and every operator of a cable communications system in the same area shall locate their respective facilities underground in accordance with the requirements of Chapter 13.04 of the Atherton Municipal Code.

G. Any and all public rights-of-way, other public property, or private property that is disturbed or damaged during the construction, operation, maintenance or repair of a cable communications system by or on behalf of a franchisee shall be promptly repaired by the franchisee at its expense. Public property and public rights-of-way shall be restored to the satisfaction of the city or to a condition as good or better than before the disturbance or damage occurred.

H. A franchisee shall, by a time specified by the director of public works or the director of utilities, as applicable, protect, support, temporarily disconnect, relocate, or remove any of its property when required by the city in the exercise of its governmental or proprietary powers by reason of traffic conditions; public safety; public rights-of-way construction and repair (including, but not limited to, regrading, resurfacing or widening); public rights-of-way vacation; construction, installation or repair of sewers, drains, water pipes, power lines, signal lines, tracks, or any other type of government-owned system or utility, public work, public facility, or improvement; or for any other purpose where the work involved would be aided by the removal or relocation of the cable communications system. Collectively, such matters are referred to below as the “public work.”

1. The director of public works or the director of utilities, as applicable, shall provide written notice describing where the public work is to be performed at least one week prior to the deadline by which a franchisee must protect, support, temporarily disconnect, relocate or remove its facilities.

2. In an emergency, or where a cable communications system creates or is contributing to an imminent danger to health, safety, or property, the city may protect, support, temporarily disconnect, remove, or relocate any and all parts of the cable communications system without prior notice, and charge the franchisee for costs incurred.

I. To accommodate the construction, operation, maintenance or repair of the facilities of another person authorized to use the public rights-of-way or public property, a franchisee shall, by a time specified by such person, protect, support, temporarily disconnect, relocate or remove its facilities. The franchisee must be given written notice describing where the construction, operation, maintenance or repair is to be performed at least fifteen days prior to the time by which its work must be completed. The director of public works and/or the director of utilities, as applicable, may resolve disputes as to responsibility for costs associated with removal, relaying, or relocation of facilities among entities authorized to install facilities in the public rights-of-way or on public property if such entities are unable to do so themselves.

J. A franchisee shall, on the request of any person holding a valid permit issued by a governmental authority, temporarily raise or lower its wires by a time specified to permit the moving of buildings or other objects. A franchisee shall be given not less than seven days’ advance written notice to arrange for such temporary wire changes. The expense of such temporary removal or the raising or lowering of wires shall be paid by the person requesting the same.

K. A franchisee shall remove its property in the public rights-of-way that it intends to abandon within ninety days after it gives written notice to the city of its intention to abandon. However, if, within ninety days of the receipt of written notice of abandonment, the city determines, that the safety, appearance, function or use of public rights-of-way and facilities in public rights-of-way will be adversely affected, the franchisee may abandon its property after receipt of appropriate notice from the city. A franchisee that abandons its property must, upon request, transfer ownership of the property to the city at no cost, and execute necessary quitclaim deeds and indemnify the city against future costs associated with the mitigation or elimination of any environmental hazard associated with the abandoned property.

L. Every cable communications system shall be subject to inspection and testing by the city or its designated representatives. Each franchisee shall respond to requests for information regarding its system and plans for the system as the city may from time to time issue, including, but not limited to, a request for information regarding its plans for the construction, operation, maintenance and repair and the purposes for which the system is being constructed, operated, maintained or repaired.

M. Each franchisee that places facilities underground shall be a member of the regional notification center for subsurface installations (Underground Services Alert) as may be required by California Government Code Sections 4216 et seq., and shall field mark the locations of its underground communications facilities upon request. A franchisee shall locate its facilities for the city at no charge.

N. Each franchisee shall provide to the city a plan for any initial system construction, or for any substantial rebuild, upgrade or extension of its facility, which shall show its timetable for construction of each phase of the project, and the areas of the city that will be affected. (Ord. 515 § 1 (part), 2000)

13.08.060 Indemnity, insurance, bonds and security fund.

A. No franchise shall be valid or effective until and unless the city obtains an adequate indemnity from the franchisee. The indemnity shall:

1. Release the city from and against any and all liability and responsibility in or arising out of the construction, operation, maintenance or repair of the cable communications system. Each franchisee must further agree not to sue or seek any money or damages from the city in connection with the grant of that franchisee’s franchise and also agree to abide by the city’s laws.

2. Indemnify and hold harmless the city, its elected and appointed officers, agents, and employees, from and against any and all claims, demands, or causes of action of any kind or nature, and the resulting losses, costs, expenses, reasonable attorneys’ fees, liabilities, damages, orders, judgments, or decrees sustained by the city or any third party arising out of, or by reason of, or resulting from or of the acts, errors, or omissions of the franchisee, or its agents, contractors, subcontractors or employees related to or in any way arising out of the construction, operation, maintenance or repair of the system.

B. A franchisee (or those acting on its behalf) shall not commence or cause the commencement of the construction, operation, maintenance or repair of the system without obtaining and maintaining insurance in amounts and of a type satisfactory to the city. The required insurance must be obtained and maintained for the entire period the franchisee owns, controls or manages facilities in the public rights-of-way. If the franchisee, its agents, contractors, and subcontractors do not have the required insurance, the cable coordinator may order such entities to stop operations until the insurance is obtained and approved.

C. Certificates of insurance, reflecting evidence of the required insurance and naming the city as an additional insured, and other proofs as the city may find necessary, shall be filed with the city clerk. For any person issued a franchise after the effective date of the ordinance codified in this chapter, the certificates and other required proofs shall be filed within thirty days of the issuance of a franchise, once a year thereafter, and whenever there is any change in coverage. For entities that have facilities in the public rights-of-way as of the effective date of the ordinance codified in this chapter, the certificates shall be filed within sixty days of the effective date of the ordinance codified in this chapter, annually thereafter, and whenever there is any change in coverage, unless a pre-existing franchise provides for the filing of certificates in a different manner.

D. Certificates shall contain a provision that coverage afforded under these policies will not be canceled until at least thirty days’ prior written notice has been given to the city. Only companies authorized to provide insurance coverage under the laws of the state must issue policies. Financial ratings must be no less than “A: VII” in the latest edition of “Best’s Key Rating Guide,” published by A.M. Best Guide.

E. A franchisee (and those acting on its behalf to construct or operate the system) shall obtain and maintain the following minimum insurance. The city shall be named as an additional insured on the general liability and automotive policies. Those insurance policies shall be primary and contain a cross-liability clause.

1. Commercial General Liability Insurance. Commercial general liability insurance to cover liability bodily injury and property damage. Exposures to be covered are premises, operations, products/completed operations, and certain contracts. Coverage must be written on an occurrence basis, with the following limits of liability:

Bodily Injury
1. Each occurrence	$1,000,000
2. Annual aggregate	3,000,000

Property Damage
1. Each occurrence	1,000,000
2. Annual aggregate	3,000,000

Personal Injury
1. Annual aggregate	3,000,000

Completed operations and products liability shall be maintained for two years after the termination of the franchise or completion of the work for the cable communications system owner or operator (in the case of a contractor or subcontractor).

Property damage liability insurance shall include coverage for the following hazards: X—explosion, C—collapse, U—underground.

2. Workers’ Compensation Insurance. Workers’ compensation insurance shall be obtained and maintained during the life of the franchise to comply with statutory limits for all employees, and in the case any work is sublet, each franchisee shall require its contractors and subcontractors similarly to provide workers’ compensation insurance for all of the latter’s employees unless such employees are covered by the protection afforded by the franchisee. Each franchisee and its agents, contractors and subcontractors shall obtain and maintain during the life of this policy employers liability insurance. The following minimum limits must be maintained:


Workers’ Compensation	Statutory
Employer’s Liability	$500,000 per occurrence

3. Comprehensive Auto Liability.

Bodily Injury
1. Each occurrence	$l,000,000
2. Annual aggregate	3,000,000

Property Damage
1. Each Occurrence	1,000,000
2. Annual Aggregate	3,000,000

Coverage shall include owned, hired, and nonowned vehicles.

F. Every franchisee shall obtain and maintain a performance bond to ensure the faithful performance of its responsibilities under this chapter and any franchise. The amount of the performance and payment bonds shall be set by the cable coordinator or may be set in a franchise ordinance in light of the nature of the work to be performed, but shall not be less than ten percent of the estimated cost of constructing or (in the case of existing systems) upgrading the system. The bonds are not in lieu of any additional bonds that may be required through the permitting process. The bond shall be in a form acceptable to the city attorney. Bonds must be obtained prior to the effective date of any franchise, transfer or franchise renewal, unless a franchise specifically provides otherwise.

G. Every franchisee shall establish and maintain a security fund in cash or provide the city an irrevocable letter of credit in the amount of one hundred thousand dollars to secure the payment of fees owed, to secure any other performance promised in a franchise, and to pay any taxes, fees or liens owed to the city. The letter of credit shall be in a form and with an institution acceptable to the city manager and in a form acceptable to the city attorney. If the city should draw upon the security fund or the letter of credit, the franchisee shall, within fourteen days, restore the security fund or the letter of credit to the required full amount. This security fund or letter of credit may be waived or reduced by the city for a franchisee where the city determines in its discretion that a particular franchisee’s operations are sufficiently limited that a security fund or a letter of credit is not necessary to secure the required performance. The city may from time to time require a franchisee to change the amount of the required security fund and letter of credit to reflect changed risks to the city and to the public, including delinquencies in taxes or other payments to the city. The security fund or the letter of credit must be obtained prior to the effective date of any franchise, transfer or franchise renewal, unless a franchise specifically provides otherwise. (Ord. 515 § 1 (part), 2000)

13.08.070 Enforcement and remedies.

A. The city council may revoke a franchise or reduce the term of a franchise if it finds, after a hearing, that a franchisee has violated its franchise or this chapter; has defrauded or attempted to defraud the city or subscribers; or has attempted to evade the requirements of its franchise or this chapter. Except as to violations that are impossible to cure, and as provided in Sections 13.08.070B and C, the franchise may be revoked only if the franchisee is given written notice of the default and thirty days to cure the default, and the franchisee fails to cure the default, or to propose a written schedule for curing the default acceptable to the city, where it is impracticable to cure the default within thirty days.

B. No opportunity to cure is required for repeated violations, and fraud and attempted fraud shall be deemed incurable. The city may declare a franchise forfeited without an opportunity to cure where a franchisee voluntarily ceases providing service that it is required to provide or transfers the franchise without the prior written consent of the city.

C. A franchise will terminate automatically by operation of law one hundred twenty days after an assignment for the benefit of creditors or the appointment of a receiver or trustee to take over the business of the franchisee, whether in a receivership, reorganization, bankruptcy, assignment for the benefit of creditors, or other action or proceeding. However, the franchise may be reinstated within that one hundred twenty-day period, if: (1) such assignment, receivership or trusteeship has been vacated; or (2) such assignee, receiver or trustee has fully complied with the terms and conditions of this chapter and the franchise, and has executed an agreement, approved by any court of competent jurisdiction, assuming and agreeing to be bound by the terms and conditions of this chapter and the franchise. In the event of foreclosure or other judicial sale of any of the facilities, equipment or property of a franchisee, the city may revoke the franchise following a public hearing before the council. The city shall serve notice upon the franchisee and the successful bidder at the sale, in which event the franchise and all rights and privileges thereunder will be revoked and will terminate thirty days after serving such notice, unless the city has approved the transfer of the franchise to the successful bidder, and the successful bidder has promised and agreed with the city to assume and be bound by the terms and conditions of the franchise and this chapter.

D. Upon the termination or forfeiture of a franchise, whether by action of the city as provided above, or by passage of time, a franchisee must stop using its cable communications system for the purposes authorized by the franchise. The city may take possession of some or all of franchisee’s facilities, or require the franchisee or its bonding company to remove some or all of the franchisee’s facilities from the areas of the city, and restore the affected property and the public rights-of-way to their same or better condition. This provision shall not permit the city to remove facilities that are used to provide another service for which the franchisee holds a valid franchise or other authorization issued by the city or other governmental authority, as applicable.

E. The remedies provided for under this chapter, or under a franchise, shall be cumulative. The recovery by the city of any amounts under insurance, the performance bond, the security fund or the letter of credit, shall not limit a franchisee’s duty to indemnify the city, or relieve a franchisee of its franchise obligations or limit the amounts owed to the city. (Ord. 515 § 1 (part), 2000)

13.08.080 Books and records.

A. Each franchisee shall provide the city access to books and records related, in whole or in part, to the construction, operation, maintenance or repair of the cable communications system, or a group of systems of which the system is a part, so that the city may inspect and copy these books and records, including those that relate to the monitoring or enforcement of a franchisee’s compliance with this chapter or a franchisee’s franchise. The records shall include, but are not limited to, revenue records, and other records related to compliance with any provision of this chapter or a franchise. A franchisee shall be responsible for obtaining and maintaining the necessary possession or control of all such books and records, so that it can produce the documents upon request. Books and records shall be maintained for a period of five years, except that a franchise may specify a shorter period for certain categories of voluminous books and records where the information contained therein can be derived simply from other materials. The phrase “books and records” shall be read expansively to include information in whatever formats the same may be stored.

B. Books and records requested shall be produced to the city by a time and at a location in the city designated by the cable coordinator. However, if the requested books and records are too voluminous, or for security reasons cannot be copied and moved, then the franchisee may request that the inspection take place at some other location mutually agreed to by the city and the franchisee, provided that (1) the franchisee shall make necessary arrangements for copying documents selected by the city after its review; and (2) the franchisee shall pay all travel and additional copying expenses incurred by the city (above those that would have been incurred had the documents been produced in the city) in inspecting those documents or having those documents inspected by its designee. (Ord. 515 § 1 (part), 2000)

13.08.090 Reports.

A. The cable coordinator may from time to time direct a franchisee to prepare reports and to submit those reports by a date certain, in a format prescribed by the city manager, in addition to those required by this chapter.

B. Unless the cable coordinator grants an exemption, within forty-five days of the end of each quarter, a franchisee shall submit a report to the city containing the following information:

1. The number of service calls (calls requiring a truck roll) received during the prior quarter and the percentage of service calls compared to the subscriber base; and

2. The total estimated hours of known outages as a percentage of total hours of operation. The term “outage” means a loss of sound or video on any signal, or a significant deterioration of any signal affecting two or more subscribers.

C. Unless the cable coordinator grants an exemption, no later than ninety days after the end of its fiscal year, a franchisee shall submit the following information:

1. A fully audited or certified revenue report from the preceding calendar year for the cable communications system, and a certified statement setting forth the computation of gross revenues used to calculate the franchise fee for the preceding year and a detailed explanation of the method of computation showing: (a) gross revenues by category (including, but not limited to, basic, pay, pay-per-view, advertising, installation, equipment, late charges, miscellaneous, other); and (b) the deductions, if any, that were made from gross revenues in calculating the franchise fee (including, but not limited to, bad debt, credits and refunds), and the amount of each deduction;

2. A report showing, for each applicable customer service standard, the franchisee’s performance with respect to that standard for each quarter of the preceding year. In each case where the franchisee or the cable coordinator concludes that the franchisee did not comply fully, the franchisee will describe the corrective actions it is taking to assure future compliance. In addition, the report should identify the number and nature of the customer service complaints received and an explanation of their dispositions;

3. A report showing the number of linear feet of public rights-of-way occupied by the franchisee’s system, the total number of the franchisee’s subscribers, and the total number of the franchisee’s basic service subscribers and subscribers for each tier of cable programming service offered; and

4. An ownership report, indicating the number and names of all persons who at the time of filing control or own an interest in the franchisee of ten percent or more of the outstanding voting securities of the franchisee.

D. Within ten days of their receipt or (in the case of documents created by the franchisee or its affiliate) filing, a franchisee shall provide the city:

1. Any notices of deficiency or forfeiture related to the operation of the system; and

2. Any requests for protection under bankruptcy laws, or any judgment related to a declaration of bankruptcy by the franchisee or by any partnership or corporation that owns or controls, directly or indirectly, the franchisee. (Ord. 515 § 1 (part), 2000)

13.08.100 Maps and improvement plans.

Each franchisee shall maintain accurate maps and improvement plans which show the location, size, and a general description of all facilities installed in the public rights-of-way and any power supply sources (including voltages and connections). Maps and improvement plans shall be based upon post-construction inspection to verify location. Each franchisee shall provide a map to the director of public works and/or the director of utilities, as applicable, showing the location of its facilities, in such detail and scale as may be directed by the director of public works and/or the director of utilities, as applicable, and update the map at least annually, and whenever the facility expands or is relocated. Copies of maps and improvement plans shall be provided in three mil Mylar format and on disk, in a commercially available electronic format specified by the director of public works and/or the director of utilities, as applicable. (Ord. 515 § 1 (part), 2000)

13.08.110 Other records.

Unless the cable coordinator waives the requirement, a franchisee shall at all times maintain:

A. Records of all complaints received, their nature and resolution. The term “complaints” refers to complaints about any aspect of the franchisee’s operations;

B. Records of outages known to the franchisee, their cause and duration;

C. Records of service calls for repair and maintenance indicating the date and time service was requested, the date of acknowledgment and date and time service was scheduled (if it was scheduled), and the date and time service was provided (whether or not a resolution of the complaint was achieved), and (if different) the date and time the problem was solved;

D. Records of installation and reconnection and requests for service extension, indicating the date of request, the date of acknowledgment, and the date and time that service was extended; and

E. Records sufficient to show whether the franchisee has complied with each customer service standard that applies to it. (Ord. 515 § 1 (part), 2000)

13.08.120 Exemptions.

The cable coordinator may temporarily exempt any franchisee from its obligations under Sections 13.08.080, 13.08.090, 13.08.100, and 13.08.110 if the city manager determines that the requirement would be unduly burdensome or unnecessary, and that the city and subscriber interests may be adequately protected in some other manner. (Ord. 515 § 1 (part), 2000)

13.08.130 Privacy.

A franchisee shall take all reasonable steps required so that it is able to provide reports, books and records to the cable coordinator, including by providing appropriate subscriber privacy notices. Each franchisee shall be responsible for redacting data that applicable law prevents it from providing to the city. Nothing in this section shall be read to require a franchisee to violate California or federal subscriber privacy laws. (Ord. 515 § 1 (part), 2000)

13.08.140 Procedures for payment.

A. The franchise fee paid pursuant to Section 13.08.250, or fee in lieu of franchise fee paid pursuant to Section 13.08.350, shall be paid quarterly unless specified otherwise in a franchise. Payment for each quarter shall be made to the city not later than forty-five days after the end of each calendar quarter.

B. Unless a franchise provides otherwise, a franchisee or other entity subject to a fee under Section 13.08.250 or Section 13.08.350 shall file with the cable coordinator within forty-five days of the end of each calendar quarter a statement showing gross revenues during the preceding quarter and the number of subscribers served.

C. No acceptance by the city of any payment shall be construed as an accord and satisfaction that the amount paid is in fact the correct amount, nor shall such acceptance of such payment be construed as a waiver or release of any claim the city may have for additional sums payable.

D. Neither the franchise fee under Section 13.08.250, nor the fee paid in lieu of the franchise fee under Section 13.08.350, is a payment in lieu of any tax, fee or other assessment of general applicability (including any such tax, fee or assessment imposed on utilities, cable and OVS operators or their services, but not including a tax, fee, or assessment which is unduly discriminatory against cable and OVS system operators or cable subscribers).

E. In the event that a fee payment is not received by the city on or before the due date set forth in this section or in a franchise, or the fee owed is not fully paid, the person subject to the fee will be charged interest from the due date at the highest interest rate allowed by California law.

F. Within ninety days of the date a franchisee ceases operations under a franchise (whether because of franchise termination, transfer, bankruptcy or for any other reason), the franchisee shall file a final statement of revenues covering the period from the beginning of the calendar year in which the operations ceased to the date operations ceased. The statement shall contain the information and shall be certified as required by Section 13.08.090C(1). (Ord. 515 § 1 (part), 2000)

13.08.200 Cable system franchise application.

A. A written application must be filed for an initial and a renewal cable system franchise, or for approval of a transfer with the city. A request for renewal filed under 47 U.S.C. Section 546(h) need not contain the information required by Section 13.08.200B.

B. The cable coordinator may specify the information that must be provided in connection with an application, and the form in which the information is to be provided.

1. At a minimum each application must identify the applicant, show that the applicant is financially, technically and legally qualified to construct, operate, maintain and repair the cable system, contain a pro forma showing capital expenditures and expected income and expenses for the first five years the applicant is to hold the franchise, and show that the applicant is ready, willing and able to comply unconditionally with this chapter and its franchise obligations.

2. Any application for an initial or a renewal franchise must describe in detail the cable system that the applicant proposes to build, show where it will be located, set out the system construction schedule, and show that the applicant will provide adequate channels, facilities and other support for public, educational and governmental use (including institutional network use) of the cable system.

3. To be accepted for filing, not less than one original and two copies of a complete application must be submitted. All applications shall include the names and addresses of individuals authorized to act on behalf of the applicant with respect to the application.

4. An applicant (and the transferor and transferee, in the case of a transfer) shall respond to any request for information from the city, by the time specified by the city.

C. If the city finds that it is in the public interest to issue a franchise considering the factors above, and such other matters as it is required or entitled to consider, and subject to the applicant’s entry into an appropriate franchise agreement, it shall issue a franchise. Prior to deciding whether or not to issue a franchise, the city may hold one or more public hearings or implement other procedures under which comments from the public on an application may be received.

D. An application may be rejected if it is incomplete, or if the response to requests for information is not timely and complete. An applicant shall not be precluded from filing another application. (Ord. 515 § 1 (part), 2000)

13.08.210 Initial and renewal franchise applications.

A. This section establishes additional provisions that apply to an application for an initial franchise, or a renewal franchise application that is not governed by 47 U.S.C. Section 546(a)-(g).

B. Any person may apply for an initial or a renewal franchise by submitting an application therefor on that person’s own initiative, or in response to a request for proposals issued by the city. If the city receives an unsolicited application, it may choose to issue a request for additional proposals, and require the applicant to amend its proposal to respond thereto. The city shall promptly conduct such investigations as are necessary to act on an application.

C. In determining whether to grant a franchise, the city may consider:

1. The extent to which an applicant for a renewal franchise has substantially complied with applicable law and the material terms of any existing cable franchise;

2. Whether an applicant for a renewal franchise’s quality of service under its existing franchise, including, but not limited to, signal quality, response to customer complaints, billing practices, and the like has been reasonable in light of the needs of the community;

3. Where the applicant has not previously held a cable system franchise in the city, whether the applicant’s record in other communities indicates that it can be relied upon to provide high-quality service throughout any franchise term;

4. Whether the applicant has the financial, legal, and technical ability to provide the services, facilities, and equipment set forth in an application, and to satisfy any minimum requirements established by the city;

5. Whether the applicant’s application is reasonable to meet the future cable-related needs and interests of the city, taking into account the cost of meeting such needs and interests;

6. Whether the issuance of a franchise is warranted in the public interest considering the immediate and future effect on public rights-of-way, public property, and private property that will be used by the applicant’s cable system;

7. Whether the issuance of the franchise would reduce competition in the provision of cable service in the city; and

8. Such other matters as the city is authorized or required to consider.

D. If the city determines that the issuance of a franchise would be in the public interest considering the factors described above, it may proffer a franchise agreement to the applicant. No franchise shall become effective until the franchise is unconditionally accepted by the applicant, and the franchise agreement is signed. (Ord. 515 § 1 (part), 2000)

13.08.220 Renewal franchise under 47 U.S.C. Section 546.

A. This section establishes additional provisions that apply to renewal franchise applications governed by 47 U.S.C. Section 546(a)-(g)

B. A franchisee which intends to exercise rights under 47 U.S.C. Section 546(a)-(g) shall submit a notice in writing to the city manager in a timely manner clearly stating that it is activating the procedures set forth in those sections. The city shall thereafter commence any proceedings that may be required under federal law, and upon completion of those proceedings, the city may issue a request for proposals and an application may be submitted for renewal. The city may preliminarily deny the application by ordinance or resolution, and if the application is preliminarily denied, the city may conduct such proceedings and by ordinance or resolution establish such procedures and appoint such individuals as may be necessary to conduct any proceedings to review the application, consistent with 47 U.S.C. Section 546(a)-(g). (Ord. 515 § 1 (part), 2000)

13.08.230 Cable system transfer application.

A. This section establishes additional provisions that apply to applications for transfer approval.

B. An application for transfer must contain all the information required by the cable coordinator, by Section 13.08.200 et seq., and all information required by any FCC transfer form, including Form 394.

C. In determining whether a transfer application should be granted, denied, or granted subject to conditions, the city may consider to the extent permitted by law the legal, financial, and technical qualifications of the transferee to operate the cable system; any potential impact of the transfer on subscriber rates or services; whether the incumbent cable operator is in compliance with its franchise and, if not, whether the incumbent or the transferee furnishes adequate cure or assurance of cure; whether the transferee owns or controls any other cable communications system in the city, whether operation by the transferee may eliminate or reduce competition in the delivery of cable service in the city; and whether transfer of the system to the transferee or approval of the transfer would otherwise adversely affect subscribers, the public, or the city’s interests under this chapter, the franchise, or other applicable law. The proposed transferee shall pay all reasonable costs incurred by the city in reviewing and evaluating an application for a transfer.

D. In order to obtain approval of a transfer, an applicant must show, at a minimum that: the transferee is qualified; the transfer will not adversely affect the interests of subscribers, the public, or the city; and that franchise and chapter noncompliance issues have been resolved. No application shall be granted unless the transferee agrees in writing that it will abide by and accept all terms of this chapter and the franchise, and that it will assume the obligations, liabilities, and responsibility for all acts and omissions, known and unknown, of the previous franchisee for all purposes. (Ord. 515 § 1 (part), 2000)

13.08.240 Legal qualifications.

A. The applicant shall comply with the provisions of this chapter and applicable laws, and it shall comply with the requirements of a franchise as the city may lawfully require.

1. The applicant must not have had any cable system or OVS franchise validly revoked, and the revocation is no longer subject to appeal, by the city within three years preceding the submission of the application.

2. The applicant may not have had an application to the city for an initial or a renewal cable system franchise denied on the ground that the applicant failed to propose a cable system meeting the cable-related needs and interests of the community (or, in the case of a franchise renewal, denied on the ground that the franchisee failed substantially to comply with the material terms of its franchise), or as to which any challenges to such franchising decision were finally resolved (including any appeals) adversely to the applicant, within three years preceding the submission of the application; and may not have had an application for an initial or a renewal OVS franchise denied on any ground within three years of the application.

3. The applicant shall not be issued a franchise if, at any time during the ten years preceding the submission of the application, the applicant or any of its officers or directors was convicted of fraud, racketeering, anticompetitive actions, unfair trade practices or other conduct of such character that the applicant cannot be relied upon to deal truthfully with the city and the subscribers, or to substantially comply with its obligations.

4. The applicant must have the necessary authority under California and federal law to operate a cable system and to conduct business in the state and the city, or show that it is in a position to obtain that authority.

5. The applicant shall not be issued a franchise if it files materially misleading information in its application or intentionally withholds information that the applicant lawfully is required to provide.

6. For the purposes of Section 13.08.240A(1)-(3), the term “applicant” includes any affiliate of the applicant.

B. Notwithstanding Section 13.08.240A, an applicant shall be provided a reasonable opportunity to show that a franchise should issue even if the requirements of Section 13.08.240A(1)-(3) are not satisfied, by virtue of the circumstances surrounding the matter and the steps taken by the applicant to cure all harms flowing therefrom and prevent their recurrence, the lack of involvement of the applicant’s principals, or the remoteness of the matter from the operation of a cable system. (Ord. 515 § 1 (part), 2000)

13.08.250 Franchise fee.

An operator of a cable system shall pay to the city a franchise fee in an amount equal to five percent of gross revenues, or such other amount as may be specified in the franchise; provided, however, that if the franchise specifies an amount, that amount shall be subject to increase should federal limits on fee payments be eliminated or changed and other operators are subject to a higher fee. (Ord. 515 § 1 (part), 2000)

13.08.260 No exclusivity.

A franchisee may not require a subscriber or a building owner or manager to enter into an exclusive contract as a condition of providing or continuing service. However, nothing herein prevents a franchisee from entering into an otherwise lawful, mutually desired exclusive arrangement with a building owner or manager of a multiple dwelling unit or commercial subscriber. (Ord. 515 § 1 (part), 2000)

13.08.270 Minimum franchise conditions.

A. In addition to satisfying such additional or stricter conditions as the city finds necessary based on its investigations, the following elements shall be required, subject to the requirements of 47 U.S.C. Section 546, in the case of every franchisee serving more than one thousand subscribers:

1. Each franchisee shall provide a cable system that uses at least two-way seven hundred fifty MHz equipment of high quality and reliability.

2. Each franchisee shall install and activate the return portion of the cable system in the sub-low transmission frequency (split) spectrum of five MHz to thirty or forty MHz.

B. A franchisee shall provide a minimum of five channels for PEG access to each subscriber.

1. Each franchisee shall install, maintain, and replace as necessary, a dedicated, bi-directional fiber optic link between its headend and a location designated by the city as the primary access center. Each franchisee shall install, maintain, and replace activated two-way cable plant and all headend, cable plant, and node equipment required to make it operable so that the city, schools, and all designated PEG access centers and access facilities located within the franchise area will be able to send and receive signals (video, audio, and data) using the activated two-way cable plant. Each franchisee shall ensure that technically adequate signal quality, routing systems, and switching and/or processing equipment are initially and continuously provided for all access interconnections both within the franchisee’s cable system and with other cable communications systems throughout the duration of its franchise.

2. In the event a franchisee makes any change in the cable system and related equipment and facilities or in the franchisee’s signal delivery technology which directly or indirectly substantially affects the signal quality or transmission of access programming, the franchisee shall at its expense take necessary steps or provide necessary technical assistance, including, but not limited to, the acquisition of all necessary equipment, to ensure that the capabilities of access programmers are not diminished or adversely affected by such change.

3. A franchisee shall maintain all access channels (both upstream channels and downstream channels) and all interconnections of access channels at the same level of technical quality and reliability as the best commercial channels carried on the system.

C. Every franchisee shall provide service in its franchise area upon request to any person or any government building. Each franchisee shall extend service upon request within its franchise area, provided that, a franchise may permit a franchisee to require a potential subscriber to contribute a fair share of the capital costs of installation or extension as a condition of extension or installation in cases where such extension or installation may be unduly expensive. Service shall be provided within the time limits specified in Section 13.08.270D.

D. Except as a franchise provides otherwise, service must be extended upon request to any person or to any government building in a franchisee’s franchise area: (1) within seven days of the request, where service can be provided by activating or installing a drop; (2) within ninety days of the request where an extension of one-half mile or less is required; or (3) within six months where an extension of one-half mile or more is required.

E. A cable system within the city shall meet or exceed the technical standards set forth in 47 C.F.R. Section 76.601 and any other applicable technical standards.

F. Each franchisee shall perform at its expense such tests as may be necessary to show whether or not the franchisee is in compliance with its obligations under applicable FCC standards, this chapter or a franchise.

G. Upon request of the city, every cable communications system shall be required to interconnect with every other cable communications system within the city on fair and reasonable terms for purposes of providing PEG and institutional network services.

H. Each franchisee shall, during the term of the franchise, ensure that subscribers are able to receive continuous service. In the event the franchise is revoked or terminated, the franchisee may be required to continue to provide service for a reasonable period of time to assure an orderly transition of service from the franchisee to another entity. A franchise may establish more particular requirements under which these obligations will be satisfied. (Ord. 515 § 1 (part), 2000)

13.08.275 Penalties for customer service standards violations.

A. Each franchisee must satisfy FCC, California and city cable customer service standards or consumer protection standards. In the case of a conflict among standards, the stricter standard shall apply.

B. For violation of cable customer service standards, penalties will be imposed in accordance with the administrative penalties provisions of the Atherton Municipal Code, or, if none, as follows:

1. Two hundred dollars for each day of each material breach, not to exceed six hundred dollars for each occurrence of material breach;

2. If there is a subsequent material breach of the same provision within twelve months, four hundred dollars for each day of each material breach, not to exceed one thousand, two hundred dollars for each occurrence of the material breach; and

3. If there is a third or additional material breach of the same provision within twelve months of the first, one thousand dollars for each day of each material breach, not to exceed three thousand dollars for each occurrence of the material breach.

C. Any penalty assessed under this Section 13.08.275 will be reduced dollar-for-dollar to the extent any liquidated damage provision of a franchisee’s franchise imposes a monetary obligation on that franchisee for the same customer service failures, and no other monetary damages may be assessed. The city will provide notice, and impose penalties, under this section pursuant to the procedures established by California Government Code Section 53088.2(r). (Ord. 515 § 1 (part), 2000)

13.08.280 Rate regulation.

A. The city may regulate any of a franchisee’s rates and charges to the full extent permitted by law. The city will regulate rates in accordance with FCC rules and regulations, where applicable. Except to the extent FCC rules provide otherwise, all rates and charges that are subject to regulation, and changes in those rates or charges must be approved in advance. The cable coordinator may take any required steps to file complaints, toll rates, issue accounting orders or take any other steps required to comply with FCC regulations. The council shall be responsible for issuing rate orders that establish rates or order refunds.

B. Except to the extent the city may not enforce such a requirement, a franchisee is prohibited from discriminating in its rates, charges, services, or terms of services, and from granting undue preferences to any subscriber, potential subscriber, group of subscribers or potential group of subscribers; provided, however, that a franchisee may offer temporary, bona fide promotional discounts in order to attract or maintain subscribers, so long as such discounts are offered on a nondiscriminatory basis to similar classes of subscribers throughout the franchise area; and a franchisee may offer discounts for the elderly, the disabled, or the economically disadvantaged, and such other discounts as it is expressly entitled to provide under federal law, if such discounts are applied in a uniform and consistent manner.

C. A franchisee shall not deny access or charge different rates to any group of subscribers or potential subscribers because of the income of the residents of the local area in which such group resides. (Ord. 515 § 1 (part), 2000)

13.08.300 Initial and renewal OVS applications.

A. A written application for grant of an initial or a renewal franchise shall be filed with the city. To be acceptable for filing, not less than an original of the application shall be submitted together with two copies. The application must conform to any applicable request for proposals, and contain all information required under Section 13.08.300B. All applications shall include the names and addresses of individuals authorized to act on behalf of the applicant with respect to the application.

B. The cable coordinator may specify the information that must be provided in connection with a request for proposals or an application for an initial or renewal franchise. At a minimum, each application must: identify the applicant; show where it plans to construct its system, and the system construction schedule; show that the applicant will provide adequate channels, facilities and other support for public, educational and governmental use (including institutional network use) of the OVS; and show that the applicant is financially, technically and legally qualified to construct, operate, maintain and repair the OVS.

C. A person may apply for an initial or a renewal franchise on its own initiative or in response to a request for proposals.

1. Upon receipt of an application the city shall proffer the applicant a proposed OVS agreement, which shall be mailed to the individual requesting its issuance and made available to any other interested party. The city may request such other information, as it deems appropriate.

2. An applicant shall respond to requests for information completely, and within the time directed by the cable coordinator, and must strictly comply with procedures, instructions, and requirements the city may establish.

3. An application may be rejected if it is incomplete, if the response to requests for information is not timely and complete, or the applicant fails to follow procedures or respond fully to information requests.

D. In evaluating a franchise application, the city may consider the following:

1. The extent to which the applicant has substantially complied with the applicable law and, in the case of a renewal franchise application, the material terms of any existing city OVS franchise;

2. Whether the applicant has the financial, technical, and legal qualifications to hold an OVS franchise;

3. Whether the application satisfies any minimum requirements established by the city for, or will provide otherwise, adequate public, educational, and governmental use capacity, facilities, or financial support (including with respect to institutional networks);

4. Whether the issuance of a franchise would require replacement of property or involve disruption of property, public services, or use of the public rights-of-way; and

5. Whether the approval of the application may eliminate or reduce competition in the delivery of cable service in the city.

E. If the city finds that it is in the public interest to issue a franchise considering the factors above, and such other matters as it is required or entitled to consider, and subject to the applicant’s entry into an appropriate OVS agreement, it shall issue a franchise. Prior to deciding whether or not to issue a franchise, the city may hold one or more public hearings or implement other procedures under which comments from the public on an application may be received.

F. In order to be legally qualified:

1. The applicant shall comply with the provisions of this chapter and applicable laws, and to comply with such requirements of an OVS agreement as the city may lawfully require;

2. The applicant must not hold a cable system franchise, or have pending an application for a cable system franchise;

3. The applicant must not have had any cable system or OVS franchise validly revoked, (including any appeals) by the city within three years preceding the submission of the application;

4. The applicant may not have had an application for an initial or a renewal cable system franchise to the city denied on the ground that the applicant failed to propose a cable system meeting the cable-related needs and interests of the community (or, in the case of a renewal franchise, denied on the ground that the franchisee failed substantially to comply with the material terms of its franchise), or as to which any challenges to such franchising decision were finally resolved (including any appeals) adversely to the applicant, within three years preceding the submission of the application;

5. The applicant may not have had an application for an initial or a renewal OVS franchise denied on any grounds within three years of the filing of the application;

6. The applicant shall not be issued a franchise if, at any time during the ten years preceding the submission of the application, the applicant or any of its officers or directors was convicted of fraud, racketeering, anticompetitive actions, unfair trade practices or other conduct of such character that the applicant cannot be relied upon to deal truthfully with the city and the subscribers, or to substantially comply with its obligations;

7. The applicant must have the necessary authority under California and federal law to operate an OVS, and must be certified by the FCC under 47 U.S.C. Section 573; and

8. The applicant shall not be issued a franchise if it files materially misleading information in its application or intentionally withholds information that the applicant lawfully is required to provide.

For purposes of Section 13.08.300A(2)-(5), the term “applicant” includes any affiliate of the applicant.

G. Notwithstanding Section 13.08.300F, an applicant shall be provided a reasonable opportunity to show that a franchise should issue, even if the requirements of Section 13.08.300A(4)-(5) are not satisfied, by virtue of the circumstances surrounding the matter and the steps taken by the applicant to cure all harms flowing therefrom and prevent their recurrence, the lack of involvement of the applicant’s principals, or the remoteness of the matter from the operation of a cable system. (Ord. 515 § 1 (part), 2000)

13.08.310 OVS transfer application.

A. No OVS transfer shall occur without prior written notice to and the approval of the council.

B. An OVS franchisee shall promptly notify the city of any proposed transfer, and submit an application for its approval.

1. The cable coordinator may specify information that must be provided in connection with a transfer application. At a minimum, an application must: describe the entities involved in the transaction and the entity that will hold the franchise; describe the chain of ownership before and after the proposed transaction; show that the entity that will hold the franchise will be legally, financially, and technically qualified to do so; attach complete information on the proposed transaction, including, but not limited to, the contracts or other documents that relate to the proposed transaction, and all documents, schedules, exhibits, or the like referred to therein; and attach any shareholder reports or filings with the SEC that discuss the transaction.

2. For the purposes of determining whether it shall consent to a transfer, the city or its agents may inquire into all qualifications of the prospective transferee and such other matters as the city may deem necessary to determine whether the transfer is in the public interest and should be approved, denied, or conditioned. If the transferee or OVS franchisee refuses to provide information, or provides incomplete information, the request for transfer may be denied.

C. In deciding whether a transfer application should be granted, denied or granted subject to conditions, the city may consider: the legal, financial, and technical qualifications of the transferee to operate the OVS; whether the incumbent OVS operator is in compliance with its OVS agreement and this chapter and, if not, the proposed transferee’s commitment to cure such noncompliance within the time required by applicable law; whether the transferee owns or controls any other OVS or cable system in the city, and whether operation by the transferee may eliminate or reduce competition in the delivery of cable service in the city; and whether operation by the transferee or approval of the transfer would adversely affect the interests of subscribers, the public, or the city under this chapter, the OVS agreement, or other applicable law.

D. In order to obtain approval of a transfer, an applicant must show, at a minimum, that: the transferee is qualified; the transfer will not adversely affect the interests of subscribers, the public, or the city; and chapter and franchise noncompliance issues have been resolved. No application shall be granted unless the transferee agrees in writing that it will abide by and accept all terms of this chapter and the OVS franchise, and that it will assume the obligations, liabilities, and responsibility for all acts and omissions, known and unknown, of the previous franchisee for all purposes. The proposed transferee shall pay all reasonable costs incurred by the city in reviewing and evaluating the applications. (Ord. 515 § 1 (part), 2000)

13.08.320 Minimum requirements.

A. No OVS operator shall be issued a franchise, and an OVS operator may not commence providing video services, including video programming services, until it: (1) agrees to match in all respects the highest PEG obligations borne by any cable system franchisee in the city; or (2) agrees to PEG obligations of a monetary value that is equivalent to the highest PEG obligations borne by any cable system operator or franchisee.

B. Any OVS operator that constructs an institutional network must match in all respects the highest institutional network obligations borne by any cable system operator or franchisee in the city, unless the OVS franchisee agrees to an alternative institutional network equivalent to the obligations of a cable system operator or franchisee in the city.

C. Every OVS agreement shall specify the construction schedule that will apply to any required construction, upgrade, or rebuild of the OVS. The schedule shall provide for prompt completion of the project, considering the amount and type of construction required.

D. Each OVS franchisee shall perform at its expense such tests as may be necessary to show whether or not the franchisee is in compliance with its obligations under this chapter or an OVS franchise.

E. Every OVS franchisee must satisfy FCC, California and city OVS customer service standards or consumer protection standards. In the case of a conflict among standards, the stricter standard shall apply. (Ord. 515 § 1 (part), 2000)

13.08.330 Special termination rules.

If an OVS franchisee’s FCC certification is revoked or terminates otherwise as a result of the passage of time or as a matter of law, the city may revoke the OVS franchise after a hearing. The OVS franchise also may be revoked if federal regulations or statutory provisions governing OVS are declared invalid or unenforceable, or are repealed. (Ord. 515 § 1 (part), 2000)

13.08.340 Rate regulation.

The city may regulate an OVS franchisee’s rates and charges except as prohibited by law, and may do so by amendment to this chapter, separate ordinance, by amendment to an OVS agreement, or in any other lawful manner. (Ord. 515 § 1 (part), 2000)

13.08.350 Fee in lieu of franchise fee.

A. In lieu of the franchise fee required by Section 13.08.250, an OVS franchisee shall pay a fee of five percent of the gross revenues of the OVS franchisee or its affiliates, or such other amount as may be specified in the franchise; provided, however, that if the franchise specifies an amount, that amount shall be subject to modification in the vent federal limits on fee payments are modified and other operators are subject to the same modified fee.

B. A person leasing capacity from an OVS operator other than a person whose revenues are included in the payment made under Section 13.08.350A shall pay the city a fee in lieu of the franchise fee required by Section 13.08.250 of five percent of the gross revenues of such person.

C. Notwithstanding the foregoing, where the OVS franchisee charges a person other than an affiliate, to use its OVS (the “use payments”); and that person recovers those use payments through charges to its subscribers that are included in that person’s gross revenues and that person fully recovers the use payments through the charges to its subscribers and pays a fee on those charges pursuant to Section 13.08.350B; then the OVS franchisee may deduct from its gross revenues the use payments it receives from that person. (Ord. 515 § 1 (part), 2000)

13.08.360 Exclusive contracts.

An OVS franchisee may not require a subscriber or a building owner or manager to enter into an exclusive contract as a condition of providing or continuing service, nor may an OVS franchisee enter into any arrangement that would effectively prevent other persons from using the OVS to compete in the delivery of cable services with a franchisee or its affiliates. (Ord. 515 § 1 (part), 2000)

13.08.400 Miscellaneous provisions.

A. The captions to sections throughout this chapter are intended solely to facilitate reading and reference to the sections and provisions of this chapter. Such captions shall not affect the meaning or interpretation of this chapter.

B. Unless otherwise indicated, when the performance or doing of any act, duty, matter, or payment is required under this chapter or any franchise, and a period of time or duration for the fulfillment of doing thereof is prescribed and is fixed herein, the time shall be computed so as to exclude the first and include the last day of the prescribed or fixed period of time.

C. If any term, condition, or provision of this chapter shall, to any extent, be held to be invalid or unenforceable by a valid order of any court or regulatory agency of competent jurisdiction, the remainder hereof shall be valid in all other respects and continue to be effective. In the event of a subsequent change in applicable law that renders valid the provision that had been held invalid, that provision shall thereupon return to full force and effect without further action by the city and shall thereafter be binding on the franchisee and the city.

D. To the extent consistent with federal law, subscribers shall have the right to attach videocassette recorders, receivers, and other terminal equipment to a franchisee’s cable system. Subscribers also shall have the right to use their own remote control devices and converters, and other similar equipment. A franchisee shall not, as a condition of providing service, require a subscriber or potential subscriber to remove any existing antenna, or disconnect any antenna except at the express direction of the subscriber or potential subscriber, or prohibit installation of a new antenna, provided that such antenna is connected with an appropriate device and complies with applicable law.

E. A franchisee shall not discriminate among persons or the city or take any retaliatory action against a person or the city because of that person’s or the city’s exercise of any right it may have under federal, California, or city law, nor may a franchisee require a person or the city to waive such rights as a condition of taking service.

F. A franchisee shall not refuse to employ, discharge from employment, or discriminate against any person in compensation or in terms, conditions, or privileges of employment because of race, color, creed, national origin, sex, age, disability, religion, ethnic background, or marital status. A franchisee shall comply with all federal, California, and local laws governing equal employment opportunities, and hiring practices.

G. The operator of any system installed as of the effective date of the ordinance codified in this chapter, for which a franchise is required under this chapter, shall have three months from the effective date of the ordinance codified in this chapter to file one or more applications for a franchise. Any operator timely filing such an application under this Section 13.08.400G shall not be subject to a penalty for failure to have such a franchise so long as such application remains pending; provided, however, nothing herein shall relieve any operator of a cable communications system of any liability for its failure to obtain any permit or other authorization required under other provisions of the Atherton Municipal Code, and nothing herein shall prevent the city from requiring removal of any facilities installed in violation of the Atherton Municipal Code.

H. Any person holding an existing franchise for a cable communications system as of the date of the ordinance codified in this chapter is adopted may continue to operate under the existing franchise to the conclusion of its present term (but not any renewal or extension thereof) with respect to those activities expressly authorized by the franchise; provided that, such person shall be subject to the other provisions of this chapter to the full extent permitted by law.

I. To the maximum extent permitted by law, pending applications shall be subject to this chapter. A person with a pending appli

cation shall have thirty days from the effective date of the ordinance codified in this chapter to submit additional information to comply with the requirements of this chapter governing applications. (Ord. 515 § 1 (part), 2000)

13.08.500 Customer service standards.

A. The customer service standards applicable to franchisees of cable communications systems are established in Appendix A to this chapter and are incorporated herein by reference.

B. The city manager may modify by relaxing or strengthening the customer service standards, or any part thereof, and the modified customer service standards shall take effect fourteen days after written notice of the same is given by the city manager to the council. (Ord. 515 § 1 (part), 2000)

13.08.600 Applicability and sunset.

A. This Chapter 13.08 shall apply to any person that was a franchisee in the town on January 1, 2007, through the later of (1) January 2, 2008, or (2) the date of the granting to that franchisee of a state franchise by the California Public Utilities Commission after one of the conditions in California Public Utilities Code Section 5840(o) has been satisfied.

B. This Chapter 13.08 shall apply to any person that was not a franchisee in the town on January 1, 2007, and that wishes to apply, on or before December 31, 2007, for a local franchise from the town. After December 31, 2007, this chapter shall not apply to any person that was not a franchisee in the town on January 1, 2007.

C. This Chapter 13.08 shall sunset in its entirety and no longer be effective on the date that all cable operators and video service providers operating in the town have state franchises granted by the California Public Utilities Commission. (Ord. 569 § 6, 2007)