Chapter 24
TELEVISION ANTENNAS1

Sections:

ARTICLE I. IN GENERAL

24.1—

24.20    Reserved.

ARTICLE II. CABLE COMMUNICATIONS REGULATIONS

24.21    General provisions.

24.22    Definitions and word usage.

24.23    The franchise.

24.24    Applications for grant, renewal or modification of franchises.

24.25    System capability and construction provisions.

24.26    Minimum access requirements.

24.27    Operation and reporting provisions.

24.28    Performance evaluation.

24.29    Rate regulation.

24.30    Franchise fee.

24.31    Insurance; indemnification.

24.32    Performance guarantees.

24.33    Remedies and penalties.

24.34    Transfers.

24.35    Rights of individuals protected.

24.36    Special rules for open video systems.

24.37    Miscellaneous provisions.

ARTICLE III. STATE VIDEO SERVICE FRANCHISES

24.38    General provisions.

24.39    Definitions.

24.40    Franchise fees.

24.41    Customer service.

24.42    Permits and construction.

24.43    Emergency alert system.

24.44    Public, educational, and government access channel capacity, support, interconnection, and signal carriage.

24.45    Notices.

ARTICLE I. IN GENERAL

24.1—24.20 Reserved.

ARTICLE II. CABLE COMMUNICATIONS REGULATIONS

24.21 General provisions.

(a) Short Title. This article shall be known and may be cited as “Cable Communications Regulatory Code.”

(b) Authorization. This article is enacted pursuant to the authorization of Article XIII, Section 1300 et. seq., of the Charter of the City of Gilroy governing the City of Gilroy, a municipal corporation.

(c) General Findings. The City of Gilroy (hereinafter called the “city”) finds that cable communication systems have the potential of benefiting its residents if properly regulated. The city further finds that the public convenience, safety, and general welfare are served through a franchising process that specifies certain conditions for review but allows for future flexibility to meet cable-related needs and interests.

(d) Purpose. It is the city’s purpose to promote the public health, safety, and general welfare by granting one or more franchises for the construction, upgrade, operation, and repair of cable communication systems within the city; to regulate (to the extent not expressly prohibited by law) each cable communication system within the city; to require each franchisee to pay a franchise fee to the city for the use of streets; to promote availability of quality cable service to city residents, businesses, the city, and other public institutions; to encourage the development of and to improve local programming including public, educational, and governmental access programming; to promote competitive cable rates and services; to provide safe and efficient use of streets and rights-of-way; to optimize the use of public property; to provide a diversity of information to the community; to provide a wide range of programming services which individually may not be desired by all subscribers, but collectively improve the overall value of a cable communication system; to maximize channel capacity, facilities, and programming access for governmental and educational agencies, as well as other groups and individual members of the general public, so as to promote open government, educational opportunity, and a diversity of community information and opinion; and to allow flexibility to respond to changes in technology, subscriber interests, and competitive factors within the cable communication service market and the larger market for entertainment and information. (Ord. No. 97-1, 1-6-97)

24.22 Definitions and word usage.

General. For the purposes of this article, the following terms, phrases, words, and abbreviations shall have the meanings given herein, unless otherwise expressly stated. When not inconsistent with the context, words used in the present tense include the future tense; words in the plural number include the singular number; and words in the singular number include the plural number; and the masculine gender includes the feminine gender. The words “shall” and “will” are mandatory, and “may” is permissive. Unless otherwise expressly stated, words not defined herein shall be given the meaning set forth in Title 47 of the United States Code, Chapter 5, Subchapter V-A, 47 U.S.C. 521 et seq., as amended, and, if not defined therein, their common and ordinary meaning. References to governmental entities (whether persons or entities) refer to those entities or their successors in authority. If specific provisions of law referred to herein are renumbered, then the reference shall be read to refer to the renumbered provision.

“Access” means the availability of the cable system(s) (as it relates to PEG access) for use by various agencies, institutions, organizations, groups, and individuals in the community, including the city and its designees, to acquire, create, and distribute programming not under a franchisee’s editorial control, including, but not limited to:

(1) “Public access” 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” means access where accredited educational institutions are the primary or designated programmers or users having editorial control over their programming;

(3) “Governmental access” means access where governmental institutions or their designees are the primary or designated programmers or users having editorial control over their programming; and

(4) “PEG access” means public access, educational access, and governmental access, collectively.

“Access channel” means any channel capacity on a cable system set aside by a franchisee for public, educational, or governmental use.

“Affiliate” means any person who owns or controls, is owned or controlled by, or is under common ownership or control with a franchisee.

“Applicant” means any person submitting an application within the meaning of this article.

“Application” means any proposal, submission or request to (i) construct and/or operate a cable system within the city; (ii) transfer a franchise; (iii) renew a franchise; (iv) modify a franchise; or (v) seek any other relief from the city pursuant to this article or a franchise agreement. An application includes an applicant’s initial proposal, submission or request, as well as any and all subsequent amendments or supplements to the proposal and relevant correspondence.

“Applicable law” means all duly enacted and applicable federal, state, and city laws, ordinances, codes, rules, regulations and orders as the same may be amended from time to time.

“Basic cable service” or “basic service” means any service tier that includes the retransmission of local television broadcast signals or such other definition as may be adopted by federal law. It shall include all PEG access channels.

“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, and the Telecommunications Act of 1996, and as further amended from time to time.

“Cable ordinance” shall refer to this city enabling ordinance.

“Cable service” means (i) the one-way transmission to subscribers of video programming or other programming services; and (ii) subscriber interaction, if any, which is required for the selection or use of such video programming or other programming service.

“Cable system” or “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 television service which includes video programming and which is provided to multiple customers within the city, but such term does not include (i) a facility that serves only to retransmit the television signals of one or more television broadcast stations; (ii) a facility that serves subscribers without using any public right-of-way, including streets or easements; (iii) a facility of a common carrier which is subject, in whole or in part, to the provisions of Title II of the Communications Act of 1934, except that such facility shall be considered a Cable System (other than for purposes of 47 U.S.C. 541(c)) if 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; or (iv) any facilities of any electric utility used solely for operating its electric utility systems. Notwithstanding the above, the term cable system also includes any facility that is a community antenna television system under California law, and the term cable system shall only apply to open video systems that comply with 47 U.S.C. 573 as specifically provided herein. A reference to a cable system refers to any part thereof, including, without limitation, converters.

“City” means the City of Gilroy. Any act that may be taken by the city may be taken by the city council or any agency, department, agent or other entity now or hereafter authorized to act on the city’s behalf.

“City council” means the governing body of the City of Gilroy.

“City administrator” means the city administrator of the city. Any act that may be taken by the city administrator may be taken by any agency, department, agent or other entity now or hereafter authorized to act on behalf of the city administrator.

“Construction, operation or repair” and similar formulations of those terms mean the named actions interpreted broadly, encompassing, among other things, installation, extension, maintenance, replacement of components, relocation, undergrounding, grading, site preparation, adjusting, testing, make-ready, excavation and tree trimming.

“Designated access provider” means the entity or entities designated by the city under subsection 24.26(c).

“Document” or “record” means those materials normally generated, used and retained in the operation and management of a cable system, in whatever form stored, including but not limited to computerized records and programs, paper records, and video or audio-taped records.

“Downstream channel” means a channel capable of carrying a transmission from the headend to remote points on the cable system or to interconnection points on the cable system.

“Equitable price” means fair market value adjusted downward for the harm to the city or subscribers, if any, resulting from a franchisee’s breach of its franchise agreement or violation of this article and as further adjusted to account for other equitable factors that may be considered consistent with 47 U.S.C. 547.

“Fair market value” means the price for the cable system valued as a going concern but with no value allocated to the franchise itself.

“FCC” means the Federal Communications Commission or its designee.

“Franchise” means a nonexclusive authorization granted in accordance with this article to install cables, wires, lines, optical fiber, underground conduit, and other devices necessary and appurtenant to the construction, rebuilding, operation, and maintenance of a cable system along the public rights-of-way within all or a specified area of the city. Any such authorization, in whatever form granted, shall not mean or include: (i) any other permit or authorization required for the privilege of transacting and carrying on a business within the city required by the ordinances and laws of the city; (ii) any permit or authorization required in connection with operations on public streets or property including, without limitation, permits for attaching devices to poles or other structures, whether owned by the city or a private entity, or for excavating or performing other work in or along public rights-of-way; (iii) agreements required for the use of conduits and poles, whether publicly or privately owned; or (iv) express or implicit authorization to provide service to, or install a cable system on, private property without owner consent (except for use of compatible easements pursuant to Section 621 (a)(2) of the Cable Act, 47 U.S.C. 541 (a)(2)).

“Franchise agreement” means a contract entered into in accordance with the provisions of this article between the city and a franchisee that sets forth, subject to this article, the terms and conditions under which a franchise will be exercised.

“Franchise area” means the geographic area of the city that a franchisee is authorized to serve by its franchise agreement. The franchise area may be specified to authorize provision of service not only in areas within the existing city limits, but also in other areas, as those areas are annexed in the future.

“Franchisee” means a natural person, partnership, domestic or foreign corporation, association, joint venture, or organization of any kind that has been granted a cable television franchise by the city.

“Gross revenues” means any and all cash, credits, property or other consideration of any kind or nature received directly or indirectly by a franchisee, its affiliates, or by any other entity that is a cable operator of a system, arising from, attributable to, or in any way derived from the operation of a franchisee’s cable system to provide cable services, including the studios and other facilities associated therewith. Gross revenues include, by way of illustration and not limitation, monthly fees charged subscribers for any basic, optional, premium, per-channel, or per-program service; installation, disconnection, reconnection, and change-in-service fees; leased channel fees; late fees and administrative fees; fees, payments, or other consideration received from programmers for carriage of programming on the cable system; revenues from rentals or sales of converters or other equipment; studio rental, production equipment, and personnel fees; advertising revenues including a per capita share of advertising revenues for advertising carried on more than one cable system; barter; revenues from sales of and/or program guides; revenues from the sale or carriage of non-cable services, including information services and bypass services; and revenues from home shopping and bank-at-home channels and such other revenue as may now exist or hereafter develop. Gross revenues shall be the basis for computing the franchise fee under any franchise and shall be interpreted in a manner which permits the city to collect the maximum franchise fee permitted by law, irrespective of the source of revenue. Gross revenues shall not include: (i) any taxes on services furnished by a franchisee which are imposed directly on any subscriber or user by the state, city, or other governmental unit and which are collected by a franchisee on behalf of said governmental unit (the franchise fee is not such a tax); (ii) any bad debt (defined as unpaid subscriber or advertiser accounts) and (iii) programming revenues of any affiliate of a franchisee whose programming is carried on the cable system where such revenues are paid to said affiliate by the franchisee and recovered by the franchisee through charges to subscribers that are included in gross revenues. A franchise fee is not a tax. The amount paid as a franchise fee shall not be deducted from gross revenues unless required to be deducted under federal law.

“Headend” means a facility for signal reception and dissemination on the cable system, including cable, antennas, wires, fibers, satellite dishes, monitors, switchers, modulators, laser transmitters, laser receivers, processors for television broadcast signals, equipment for the interconnection of the cable system with adjacent cable systems, and interconnection of any separate networks which are part of the cable system, and all other related equipment and facilities.

“Interconnect” or “interconnection” means the provision by a franchisee of technical, engineering, physical, and all other necessary components to accomplish, complete, and adequately maintain a physical linking of a franchisee’s cable system and cable services or any designated channel or signal pathway thereof, with any other designated cable system so that cable services of technically adequate quality may be sent to and received from such other systems.

“Open video system” means a facility consisting of a set of transmission paths and associated signal generation, reception, and control equipment that is designed to provide cable service which includes video programming and which is provided to multiple subscribers within a community, provided that the Federal Communication Commission (FCC) has certified that such system complies with applicable FCC rules and regulations.

“Overbuild” means a cable system constructed to serve subscribers in an area of the city served by an existing cable system.

“Person” means an individual, sole proprietorship, partnership, association, joint stock company, organization, corporation, or any other form of organization authorized to do business in the State of California, and including any natural person, or any lawful successor thereto or transferee thereof, but such term does not include the city.

“Programming” means the process of causing television programs or other patterns of signals in video, voice, or data formats to be transmitted on the cable system either upstream or downstream, and includes all programs or patterns of signals transmitted or capable of being transmitted on the cable system.

“Public property” means any real property owned by the city or any other governmental unit that is not otherwise defined herein as a public rights-of-way.

“Public rights-of-way” means the surface, the air space above the surface, and the area below the surface of any public street, road, highway, freeway, lane, path, alley, court, sidewalk, boulevard, drive, bridge, tunnel, park, parkway, waterway, easement, rights-of-way or other public way, or similar property in which the city now or hereafter holds any property interest, now or hereafter existing which, consistent with the purposes for which it was dedicated, may be used for the purpose of installing, maintaining and operating a cable system. No reference herein, or in any franchise agreement, to a “public right-of-way” shall be deemed to be a representation or guarantee by the city that its interest or other right to control the use of such property is sufficient to permit its use for such purposes, and a franchisee shall be deemed to gain only those rights to use as are properly in the city and as the city may have the undisputed right and power to give.

“Rebuild” means to alter a cable system through the replacement of cable, amplifiers, passive devices, and headend electronics as necessary so as to increase the channel capacity of the system by at least twenty channels.

“Sale” means any sale, exchange, or barter transaction.

“Service tier” means a package of two (2) or more cable services for which a separate charge is made by the franchisee, other than a package of premium and pay-per-view services that is not subject to rate regulation under the Cable Act and applicable FCC regulations because those services are also sold on a true a la carte basis.

“Subscriber” means any person who legally receives for any purpose or reason any service delivered by a franchisee by means of or in connection with cable system whether or not a fee is paid for such service.

Transfer. (1) “Transfer” means any transaction in which: (i) all or substantially all of the cable system is sold or assigned; or (ii) there is any change, acquisition, or transfer of control of the franchisee; (iii) the rights and/or obligations held by the franchisee under the franchise are transferred, sold, assigned, or leased, in whole or in part, directly or indirectly, to another party.

(2) “Control of the franchisee” for purposes of this section means the ability to exert actual working control, in whatever manner exercised, over the affairs of a franchisee or a cable operator of a cable system, either directly or indirectly. Without limiting the above, any change in the managing general partners of the franchisee shall be presumed a change in control.

“Upgrade” means an improvement in channel capacity or other technical aspect of cable system capacity which may be accomplished without a rebuild of the cable system.

“Upstream channel” means a channel capable of carrying a transmission to the headend from remote points on the cable system or from interconnection points on the cable system.

“User” means a person or organization utilizing 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.

Other Terms. Words not defined herein shall be given the meaning set forth in the Cable Communications Policy Act of 1984, 47 U.S.C. 521 et seq., as amended. (Ord. No. 97-1, 1-6-97)

24.23 The franchise.

(a) Grant of Franchise. The city may grant one (1) or more cable system franchises, and each such franchise shall be awarded in accordance with and subject to the provisions of this article. In no event shall this article be considered a contract between the city and a franchisee such that the city would be prohibited from amending any provision hereof.

(b) Scope of Franchise. A franchise shall, by its terms, authorize the construction, operation and maintenance of a cable system to provide cable services. A franchisee may at any time (as part of an application for a franchise under this chapter, or separately) apply to expand the scope of its franchise, subject to appropriate conditions, or may apply for a separate authorization to provide services other than cable services, pursuant to such procedures as the city may lawfully establish from time to time.

(c) Franchise Required. Except as federal law may otherwise provide, no person may construct or operate a cable system without a franchise granted by the city. No person may be granted a franchise without having entered into a franchise agreement with the city pursuant to this article, having received the city’s approval of the franchise agreement and having filed an unconditional acceptance of the franchise in a form acceptable to the city attorney.

(d) Length of Franchise. No franchise shall be granted for a period of more than ten (10) years, except that a franchisee may apply for renewal or extension pursuant to section 24.24.

(e) Nonexclusive Franchises. A franchise is non-exclusive and will not explicitly or implicitly preclude the issuance of other franchises to operate cable systems within the city; affect the city’s right to authorize use of public rights-of-way by other persons to operate cable systems or for other purposes as it determines appropriate; or affect the city’s right to itself construct, operate, or maintain a cable system, with or without a franchise.

(f) Franchise Agreement. Once a franchise agreement has been accepted and executed by the city and a franchisee, such franchise agreement shall constitute a contract between the franchisee and the city, and the terms, conditions, and provisions of such franchise agreement, subject to this article and all other duly enacted and applicable law, shall define the rights and obligations of the franchisee and tile city relating to the franchise. In addition to other matters that may or must be addressed therein consistent with the Cable Act, the franchise agreement shall specify:

(1) The franchise area for which the franchise is awarded, and the terms and conditions under which the franchisee must extend service to persons within that franchise area;

(2) The term of the franchise;

(3) Requirements for cable system design and performance;

(4) Equipment and facilities requirements; and

(5) Requirements related to channels, facilities, and equipment for PEG access and community use (including institutional uses).

The franchise area may be larger, smaller, or the same as the franchise area identified by the applicant.

(g) Prior Lawful Occupancy Prevails. All privileges prescribed by a franchise shall be subordinate to any prior lawful occupancy of the public rights-of-way, and the city reserves the right to reasonably designate where a franchisee’s facilities are to be placed within the public rights-of-way.

(h) Exclusive Contracts for Cable Service Prohibited. 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 exclusive arrangement with a building owner or manager of a multiple dwelling unit or commercial subscriber.

(i) Franchisee Subject to Other Laws, Police Power. A franchisee shall at all times be subject to and shall comply with all applicable federal, state, and local laws. Without limiting the foregoing, a franchisee shall at all times be subject to all lawful exercise of the police power of the city, including all rights the city may have under 47 U.S.C. 552 and laws governing permitting, zoning and control of streets and public rights-of-way.

(j) No Waiver, Express Waivers. No course of dealing between a franchisee and the city, or any delay on the part of the city in exercising any rights under this article, shall operate as a waiver of any such rights or powers of the city, including the right of the city to acquire the property of the franchisee through the exercise of the right of eminent domain. Nor shall the city’s acquiescence in the actions of a franchisee in contravention of rights or powers operate as a waiver except to the extent expressly waived by the city or expressly provided for in a franchise agreement. Nothing herein contained shall be construed to contract away or to waive, modify or abridge, either for a term or in perpetuity, the city’s right of eminent domain with respect to any entity, including but not limited to any public utility.

(k) Reserved Rights. The city shall have the maximum plenary authority to regulate cable systems, franchisees, and franchises as may now or hereafter be lawfully permissible. Except where rights are expressly waived by the city in a franchise agreement, this article or by any ordinance or resolution of the city, the rights are reserved, whether expressly enumerated or not, and a franchisee, by its acceptance of a franchise, agrees to be bound thereby and to comply with any action or requirements of the city in its exercise of any of its rights or powers.

(l) Interpretation of Franchise Terms, Applicable Law.

(1) Conflict. In the event of a conflict between this article and a franchise agreement, the provision that the city determines is to its greatest benefit shall control, except where it is otherwise expressly provided to the contrary in a franchise agreement.

(2) Controlling Law. Except as to matters that are governed solely by federal law or regulation, a franchise agreement will be governed by and construed in accordance with the laws of the State of California.

(3) Operation of a Cable System without a Franchise. Any person who occupies public rights-of-way for the purpose of operating or constructing a cable system and who does not hold a valid franchise from the city shall be, to the extent permitted by applicable law, subject to all provisions of this article including, without limitation, section 24.25 regarding construction standards; section 24.26 regarding access requirements, except that to the extent that the most recent franchise granted by the city contains access requirements that are different than those contained herein, such person will be required to match the provisions contained in such recent franchise; section 24.30 regarding franchise fees, which providing that the amount paid shall be in lieu of franchise fees for use of the right-of-way to provide cable service but not in lieu of any other fees, such as fees for use of the public rights-of-way to provide telecommunication services that may be imposed under state or local law; section 24.31 regarding insurance and indemnification, such proof of insurance in the amounts provided therein to be submitted to the city and such indemnification being provided in accordance with terms provided in section 24.31(h) and contained in an agreement which is executed by and enforceable against such person and submitted to the city prior to the commencement of construction of such cable system; section 24.32 regarding performance guarantees to be provided in the same amounts and under the same terms as provided thereunder; and section 24.33 regarding violation of this article or applicable law.

In its discretion, the city at any time may require such person to enter into a franchise agreement within thirty (30) days of receipt of a written notice by the city that a franchise agreement is required; require such person to remove its property and restore the area to a condition satisfactory to the city within such time period; remove the property itself and restore the area to a satisfactory condition and charge the person the costs therefor; and/or take any other action it is entitled to take under applicable law, including filing for and seeking damages for trespass. In no event shall a franchise be created unless it is issued by action of the city and is memorialized in a written franchise agreement.

(m) Acts at Franchisee’s Expense. Any act that a franchisee is or may be required to perform under this article, a franchise agreement, or applicable law shall be performed at the franchisee’s expense, unless expressly provided to the contrary in this article, the franchise agreement, or applicable law. (Ord. No. 97-1, 1-6-97)

24.24 Applications for grant, renewal or modification of franchises.

(a) Written Application. A written application shall be filed with the city for:

(1) Grant of an initial franchise;

(2) Renewal of a franchise under 47 U.S.C. 546(a)—(g); or

(3) Modification of a franchise agreement pursuant to this article or a franchise agreement.

(b) Filing Requirements. To be acceptable for filing, a signed original of the application shall be submitted together with an initial filing of fifteen (15) copies. The application must conform to any applicable request for proposals and contain all required information. All applications shall include the names and addresses of persons authorized to act on behalf of the applicant with respect to the application.

(c) Public Inspection. All applications accepted for filing shall be made available by the city for public inspection.

(d) Contents of Applications. A request for proposals (“RFP”) for the grant of a franchise, including for a renewal franchise under 47 U.S.C. 546(c), shall require, and any application submitted (other than an application submitted pursuant to 47 U.S.C. 546(h) or to subsection 24.24(d) contained herein) shall contain, at a minimum, the following information:

(1) Applicant Information. Name and address of the applicant and identification of the ownership and control of the applicant including: the names and addresses of the ten (10) largest holders of an ownership interest in the applicant and in all persons in the applicant’s direct ownership chain; the names and addresses of all persons with ten (10) percent (10) or more ownership interest in the applicant and in persons in the applicant’s direct ownership chain; the persons who control the applicant and persons in the applicant’s direct ownership chain; and all officers and directors of the applicant and persons in the applicant’s direct ownership chain;

(2) Interest in Applicant. A list of all city employees, officials, or appointees that have any interest, direct or indirect, in the applicant or any affiliate;

(3) Technical Ability. A demonstration of the applicants technical ability to construct and/or operate the proposed cable system, including identification of key personnel;

(4) Legal Qualifications. A demonstration of the applicant’s legal qualifications to construct and/or operate the proposed cable system, including but not limited to providing information that shows that the applicant meets the following criteria:

a. The applicant must be willing to comply with the provisions of this article and applicable laws; and to comply with such requirements of a franchise agreement as the city may lawfully require;

b. The applicant must not have submitted an application for an initial or renewal franchise to the city, which was denied on the ground that the applicant failed to propose a cable system meeting the cable-related needs and interests of the community, or as to which any challenges to such franchising decision were finally resolved (including any appeals) adversely to the applicant, within three (3) years preceding the submission of the application;

c. The applicant must not have had any cable television franchise validly revoked (including any appeals) by any franchising authority within three (3) years preceding the submission of the application;

d. The applicant must have the necessary authority under California law to operate a cable system;

e. The applicant shall not be issued a franchise if it may not hold the franchise as a matter of applicable law. An applicant must have, or show that it is qualified to obtain, any necessary federal or state authorizations or waivers required to operate the cable system proposed;

f. The applicant shall not be issued a franchise if, at any time during the five (5) years preceding the submission of the application, the applicant was convicted of any act or omission of such character that the applicant cannot be relied upon to deal truthfully with the city and the subscribers of the cable system, or to substantially comply with its lawful obligations under applicable law, including obligations under consumer protection laws and laws prohibiting anticompetitive acts, fraud, racketeering, or other similar conduct;

g. 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; and

h. The applicant shall not be issued a franchise if an elected official of the city holds a controlling interest in the applicant or an affiliate of the applicant.

(5) Other Circumstances. Notwithstanding the foregoing, the city shall provide an opportunity to an applicant to show that it would be inappropriate to deny it a franchise under subsection 24.24.(d)(4)c. or f., by virtue of the particular 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 cable systems. Nothing in this section prevents an applicant from raising other issues with the city relevant to the consideration of the applicant’s legal qualifications under subsection 24.24.(d)(4)c. or f.

(6) Accountant Statement. A statement prepared by a certified public accountant regarding the applicant’s financial ability to complete the construction and operation of the cable system proposed;

(7) Prior Cable Experience. A description of the applicant’s prior experience in cable system ownership, construction, and operation, and identification of cities and counties in California in which the applicant or any of its principals have a cable franchise or any interest therein, provided that an applicant that holds a franchise for the city and is seeking renewal of that franchise need only provide this information for other cities and counties in California where its franchise is scheduled to expire in the two (2) calendar years prior to or after its application is submitted to the city. If an applicant has no other franchise in California, it shall provide the information for its operations in other states.

(8) Proposed Franchise Area. Identification of the area of the city to be served by the proposed cable system, including a description of the proposed franchise area’s boundaries;

(9) Facilities Description. A detailed description of the physical facilities proposed, including channel capacity, technical design, performance characteristics, institutional network, headend, and PEG access facilities;

(10) Construction Description. Where applicable, a description of the construction of the proposed cable system, including an estimate of plant mileage and its location; the proposed construction schedule; a description, where appropriate, of how services will be converted from existing facilities to new facilities; and information on the availability of space in conduits including, where appropriate, an estimate of the cost of any necessary rearrangement of existing facilities;

(11) Rate Structure. The proposed rate structure, including projected charges for each service tier, installation, converters, and all other proposed equipment or services;

(12) Community Needs. A demonstration of how the applicant will reasonably meet the future cable-related needs and interests of the community, including descriptions of the capacity, facilities and support for public, educational, and governmental use of the cable system (including institutional networks) applicant proposes to provide and why applicant believes that the proposal is adequate to meet the future cable-related needs and interests of the community;

(13) Pro Formas. Pro forma financial projections for the proposed franchise term, including a statement of projected income, and a schedule of planned capital additions, with all significant assumptions explained in notes or supporting schedules;

(14) Existing Cable Franchise. If the applicant proposes to provide cable service to an area already served by an existing cable franchisee, the identification of the area where the overbuild would occur, the potential subscriber density in the area that would encompass the overbuild, and the ability of the public rights-of-way and other property that would be used by the applicant to accommodate an additional system;

(15) Information Regarding Compliance. Any other information as may be reasonably necessary to demonstrate compliance with the requirements of this article;

(16) Additional Information. Information that the city may request of the applicant that is relevant to the city’s consideration of the application; and

(17) Affidavit. An affidavit or declaration of the applicant or authorized officer thereof certifying the truth and accuracy of the information in the application, acknowledging the enforceability of application commitments, and certifying that the application meets all requirements of applicable law.

(e) Application for Grant of a Franchise, Other Than a Cable Act Renewal Franchise.

(1) RFP Request. A person may apply for a franchise by submitting a request for issuance of a request for proposals (RFP) and requesting an evaluation of its application pursuant to subsection 24.24(e)(3). Upon receipt of a request for an RFP, the city shall, if necessary, commence a proceeding to identify the future cable-related needs and interests of the community and, upon completion of that proceeding, shall promptly issue an RFP and proposed franchise agreement along with an invitation to comment on such proposed franchise agreement, which shall be mailed to the person requesting its issuance, and any existing cable system franchisee, and made available to any other interested party. The applicant shall respond within the time directed by the city, providing the information and material set forth in subsection 24.24(d). The procedures, instructions, and requirements set forth in the RFP shall be followed by each applicant as if set forth and required herein. The city or its designee may seek additional information from any applicant and establish deadlines for the submission of such information (which deadlines shall be not less than twenty (20) days from issuance of a request for additional information). An existing franchisee shall have the right to file comments regarding any applicant and their application, which comments shall be treated as part of the record before the city.

(2) Unsolicited Applications. Notwithstanding the provisions of subsection 24.24(e)(1), a person may apply for an initial franchise by submitting an unsolicited application containing the information required in subsection 24.24(d) and requesting an evaluation of that application pursuant to subsection 24.24.(e)(3). Prior to evaluating that application, the city may conduct such investigations as are necessary to determine whether the application satisfies the standards set forth in subsection 24.24(e)(3) and may seek additional applications.

(3) Evaluation. In evaluating an application or a franchise, the city shall consider, among other things, the following factors:

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

b. Whether the quality of the applicant’s service under any existing franchise in the city, including signal quality, response to customer complaints, billing practices, and the like, has been reasonable in light of the needs and interests of the communities served;

c. Whether the applicant has the financial, technical, and legal qualifications to hold a cable franchise;

d. Whether the application satisfies any minimum requirements established by the city and is otherwise reasonable to meet the future cable-related needs and interests of the community, taking into account the cost of meeting such needs and interests;

e. Whether, to the extent not considered as part of subsection 24.24(e)(3)d., the applicant will provide adequate public, educational, and governmental access use capacity, facilities, or financial support;

f. Whether issuance of a franchise is in the public interest considering the immediate and future effect on the public rights-of-way and private property that would be used by the cable system, including the extent to which installation or maintenance as planned would require replacement of property or involve disruption of property, public services, or use of the public rights-of-way; the effect of granting an overbuild franchise on the ability of any existing franchisee to meet the cable-related needs and interests of the community; and the comparative superiority or inferiority of competing applications; and

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

(4) Approval or Denial; No Standing. If the city finds that it is in the public interest to issue a franchise considering the factors set forth above, and subject to the applicant’s entry into an appropriate franchise agreement, it shall issue a franchise. If the city denies a franchise, it will issue a written decision explaining why the franchise was denied. The city also may grant or deny a request for a franchise based on its review of an application without further proceedings and may reject any application that is incomplete or fails to respond to an RFP. This article is not intended and shall not be interpreted to grant any applicant or existing franchisee standing to challenge the issuance of a franchise to another.

(f) Application for Grant of a Cable Act Renewal Franchise. Applications for renewal under the Cable Act shall be received and reviewed in a manner consistent with Section 626 of the Cable Act, 47 U.S.C. 546. It is the proposal submitted by a franchisee under 47 U.S.C 546(b), and not the request for commencement of the renewal proceedings submitted under 47 U.S.C. 546(a), that must contain the information required under subsection 24.24(d). If neither a franchisee nor the city activates in a timely manner, or can activate the renewal process set forth in 47 U.S.C. 546(a)-(g) (including, for example, if the provisions are repealed), and except as to applications submitted pursuant to 47 U.S.C. 546(h), the provisions of subsection 24.24(e) shall apply and a renewal request shall be evaluated using the same criteria as any other request for a franchise. The following requirements shall apply to renewal requests properly submitted pursuant to the Cable Act:

(1) If the provisions of 47 U.S.C. 546(a)—(g) are properly invoked, the city shall issue an RFP after conducting a proceeding to review the franchisee’s past performance and to identify future cable-related community needs and interests. The city shall make available for review by a franchisee the results of the city’s review and ascertainment proceedings. The city shall establish deadlines and procedures for responding to the RFP (which deadlines shall not be less than thirty (30) days after issuance of the RFP), may seek additional information from the franchisee related to the city’s evaluation of the proposal given the standards for review of that proposal under applicable law, and shall establish deadlines for the submission of that additional information (which deadlines shall not be less than twenty (20) days after issuance of the request). Following receipt of the application responding to that RFP (and such additional information as may be provided in response to requests), the city council will determine that the franchise should be renewed, or make a preliminary assessment that the franchise should not be renewed in accordance with the provisions of the Cable Act applicable to that preliminary decision. The preliminary determination shall be made by resolution. If the city council determines that the franchise should not be renewed, and the franchisee notifies the city, either in its RFP response or within thirty (30) business days of the preliminary assessment, that it wishes to pursue any rights to an administrative proceeding it has under the Cable Act, then the city shall commence an administrative proceeding after providing prompt public notice thereof, in accordance with the Cable Act. If the city council decides preliminarily to grant renewal, it shall prepare a final franchise agreement that incorporates, as appropriate, the commitments made by the franchisee in the application. If the franchisee accepts the franchise agreement, and the final agreement is ratified by the city council, the franchise shall be renewed. If the franchise agreement is not so accepted and ratified within the time limits established by 47 U.S.C. 546(c)(1), renewal shall be deemed preliminarily denied, and an administrative proceeding commenced if the franchisee requests it within thirty (30) business days of the expiration of the time limit established by 47 U.S.C. 546(c)(1), unless the time limit is extended by mutual agreement of the city and the franchisee.

(2) Administrative Hearing. If an administrative hearing is commenced pursuant to 47 U.S.C. 546(c), the applicant’s renewal application shall be evaluated considering such matters as may be considered consistent with federal law. The following procedures shall apply:

a. The city council shall appoint an administrative hearing officer or officers (referred to hereafter as “hearing officer”). The city council may appoint itself as hearing officer.

b. The proceeding shall be timely conducted in accordance with such lawful procedures as established by the city.

c. The hearing officer shall establish a schedule for proceeding. The hearing officer shall have the authority to require the production of evidence from any person as the interests of justice may require. Any order regarding the production of evidence may be enforced by a court of competent jurisdiction or by imposing appropriate sanctions in the administrative hearing.

d. The hearing officer may conduct a prehearing conference and establish appropriate prehearing orders. Intervention by non-parties is not authorized except to the extent required by the Cable Act.

e. The hearing officer shall require the city and the franchisee to submit prepared testimony prior to the hearing. Unless the parties agree otherwise, the franchisee shall present evidence first, and the city shall present evidence second.

f. Any reports or the transcript or summary of any proceedings conducted pursuant to 47 U.S.C. 546(a) shall be, for purposes of the administrative hearing, regarded no differently than any other evidence. The city and the franchisee shall be afforded fair opportunity for full participation in the proceeding, including the right to introduce evidence (including evidence related to issues raised in the proceeding under subsection 47 U.S.C. 546(a)), to require the production of evidence, and to question witnesses.

g. Following completion of any hearing, the hearing officer may require the parties to submit, and any party may submit, proposed findings of fact with respect to the matters that the city is entitled to consider in determining whether renewal ought to be granted. Based on the entire record of the administrative hearing, the hearing officer shall then prepare written findings, and submit those findings to the city council and to the parties (unless the hearing officer is the city council, in which case the written findings shall constitute the final decision of the city).

h. If the hearing officer is not the city council, the parties shall have thirty (30) days from the date the findings are submitted to the city council to file exceptions to those findings. The city council shall thereafter issue a written decision granting or denying the application for renewal, consistent with the requirements of the Cable Act and based on the record of such proceeding. A copy of the final decision of the city council shall be provided promptly to the applicant.

(3) Informal Renewal Application. This section does not prohibit any franchisee from submitting an informal renewal application pursuant to 47 U.S.C. 546(h), which application may be granted or denied in accordance with the provisions of 47 U.S.C. 546(h). If such an informal renewal application is granted, then the steps specified in subsections. 4.5.A and 4.5.C(1)—(8) of this section need not be taken, notwithstanding the provisions of those subsections.

(g) Application for Modification of a Franchise. An application for modification of a franchise agreement shall include, at minimum, the following information:

(1) The specific modification requested;

(2) The justification for the requested modification, including the impact of the requested modification on subscribers and others, and the financial impact on the applicant if the modification is approved or disapproved, demonstrated through, inter alia, submission of pro forma financial statements;

(3) A statement indicating whether the modification is sought pursuant to Section 625 of the Cable Act, 47 U.S.C. 545, and, if so, a demonstration that the requested modification meets the standards set forth in 47 U.S.C. 545;

(4) Any other information that the applicant believes is necessary for the city to make an informed determination on the application for modification; and

(5) An affidavit or declaration of the applicant or applicant’s authorized officer certifying the truth and accuracy of the information in the application, and certifying that the application is consistent with the requirements of applicable law.

(h) Filing Fees. To be acceptable for filing, an application submitted after the effective date of this article shall be accompanied by all filing fees required by and in such amounts as shall be set by resolution adopted by the city council from time to time.

(i) Notice and Public Hearings. The city shall provide reasonable public notice of an application, including information on filing protests to the granting of the franchise and shall hold one or more public hearings prior to a decision on the franchise. An applicant shall be notified of any public hearings held in connection with the evaluation of its application, and all persons shall be given an opportunity to be heard.

(j) Consistent with Cable Act. The provisions of this section 24.24 shall be read and applied so that they are consistent with Sections 625 and 626 of the Cable Act, 47 U.S.C. 545 - 47 U.S.C. 546. (Ord. No. 97-1, 1-6-97)

24.25 System capability and construction provisions.

(a) General. Based upon studies of this community, a review of other communities, comments received at a public hearing, meetings, interviews, surveys, a detailed analysis of cable television systems serving the area, and the experience of other communities in the development of cable television systems as well as general developments in the cable industry, the city has determined that the following system capacity requirements are necessary to provide the most basic cable system necessary to meet the cable needs of the city. In any specific franchise grants or renewals, system channel capacity may be required to accommodate cable needs of the city.

(b) Initial System Capacity. A franchisee shall provide a cable system which uses at least 550-MHz equipment of high quality and reliability. At minimum, a franchisee shall integrate optical fiber or other network facilities and equipment providing equivalent or greater functionality, performance and capacity into any cable system construction and design in a manner which permits it to take full advantage of the benefits of that technology.

(c) Subscriber Upstream Activation. At minimum, franchisee shall install and activate the return portion of the cable system in the sub-low frequency spectrum of five (5) MHz to thirty (30) MHz.

(d) Headend C Access Center Link. A franchisee shall install, maintain, and replace as necessary equipment and facilities to transmit and receive all access channels between the primary access center and the headend.

(e) Public Agencies. A franchisee shall install, maintain, and replace as necessary activated two-way cable plant and all equipment and facilities required to make it operable so that city government buildings, buildings of accredited educational institutions, 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).

(f) Other. A franchisee shall initially include a sufficient number of downstream and upstream channels with sufficient capability and technical quality to enable the implementation and performance of all the requirements of this article, including but not limited to, remote access transmissions and transmissions to and from access centers and interconnection points, as set forth in, in but not limited to, this article.

(g) System Construction Schedule.

(1) Construction Schedule and Plan. Every franchise agreement shall specify the construction schedule that will apply to any required construction, upgrade, or rebuild of the cable system. The schedule shall provide for prompt completion of the project, considering the amount and type of construction required. The franchise agreement shall require the franchisee to include a plan for the rebuild, containing at least the following information: a concise description of the cable system proposed to be erected or installed, including engineering drawings, if required by the city, together with an electronic map and plans indicating the proposed location of all such facilities. The franchise agreement shall further provide that the construction schedule and plan shall be subject to city review and approval.

(2) Failure to Comply. Failure on the part of a franchisee to commence and diligently pursue each of the requirements and complete each of the matters set forth in its franchise agreement or to comply with the cable system design and construction plan approved by the city, including the failure to provide the equipment specified (or its equivalent) and the failure to follow the distribution system design plan, construction plan and installation practices manual (except insofar as those plans or practices, if carried out, would result in construction of a system which could not meet requirements of federal, state or local law; and except for such minor modifications as are typical in the industry), shall be grounds for termination of its franchise under and pursuant to the terms of subsection 24.33(b); provided, however, that the city in its discretion may extend the time for the completion of construction and installation for additional periods in the event a franchisee, acting in good faith, experiences delays by reason of circumstances beyond its control. A franchisee’s failure to comply with provisions of the construction plan approved by the city shall be subject to penalties pursuant to subsection 24.33(i).

(h) Construction Procedures.

(1) Compliance with Laws. A franchisee shall construct, operate and maintain the cable system subject to the supervision of all of the authorities of the city who have jurisdiction in such matters, and in strict compliance with all laws, ordinances, departmental rules and regulations affecting the cable system.

(2) Periodic Inspection. The cable system shall be subject to the right of periodic inspection by the city.

(3) Permits. No construction, reconstruction or relocation of the cable system within the public rights-of-way shall be commenced until written permits have been obtained from the proper city officials. In any permit so issued, such officials may impose such conditions and regulations as a condition of the granting of the permit as are necessary for the purpose of protecting any structures in the public rights-of-way, for the proper restoration of such public rights-of-way and structures, and for the protection of the public and the continuity of pedestrian and vehicular traffic, including the requirement that franchisee bore rather than open trench in connection with work performed by franchisee, and may levy appropriate fees for the issuance of the permits.

(4) Regulation. The city council may, from time to time, issue such reasonable rules and regulations concerning the construction, operation and maintenance of the cable system as are consistent with the provisions of this article and the franchise issued pursuant to this article.

(i) Construction Standards.

(1) Compliance with Applicable Standards and Laws. The construction, operation, maintenance, and repair of a cable system shall be in accordance with all applicable sections of the Occupational Safety and Health Act of 1970, as amended, the National Electrical Safety Code, the National Electric Code, National Cable Television Association Standards of Good Engineering Practices; Obstruction Marking and Lighting, AC 70/7460 i.e., Federal Aviation Administration; Construction, Marking and Lighting of Antenna Structures, Federal Communications Commission Rules Part 17; AT&T Manual of Construction Procedures (Blue Book); California Public Utility Commission Construction Requirements applicable to cable systems; Franchising Construction Procedures Manual; other applicable federal, state, or local laws and regulations that may apply to the operation, construction, maintenance, or repair of a cable system, including, without limitation, local zoning and construction codes, and laws and accepted industry practices, all as hereafter may be amended or adopted. In the event of a conflict among codes and standards, the most stringent code or standard shall apply (except insofar as that standard, if followed, would result in a system that could not meet requirements of federal, state or local law). The city may adopt additional standards as required to ensure that work continues to be performed in an orderly and workmanlike manner, or to reflect changes in standards which may occur over the franchise term.

(2) Minimum Interference. All wires, cable lines, and other transmission lines, equipment, and structures shall be installed and located to cause minimum interference with the rights and convenience of property owners.

(3) Electronic Equipment. All installation of electronic equipment shall be of a permanent nature, using durable components.

(4) Antennas. Without limiting the foregoing, antennas and their supporting structures (towers) shall be designed in accordance with the Uniform Building Code as amended, and shall be painted, lighted, erected, and maintained in accordance with all applicable rules and regulations of the Federal Aviation Administration and all other applicable law, all as hereafter may be amended or adopted.

(5) Placement of Facilities. Without limiting the foregoing, all of a franchisee’s plant and equipment, including, but not limited to, the antenna sites, headend and distribution system, towers, house connections, structures, poles, wires, cable, coaxial cable, fiber optic cable, fixtures, and apparatuses shall be installed, located, erected, constructed, reconstructed, replaced, removed, repaired, maintained, and operated in accordance with good engineering practices, performed by experienced and properly trained maintenance and construction personnel so as not to endanger or interfere with improvements the city shall deem appropriate to make or to interfere in any manner with the public rights-of-way or any gas, electric, telephone, telecommunications, water, sewer, or other utility facilities, or obstruct or hinder in any manner such entities’ use of any public rights-of-way, or legal rights of any property owner or to unnecessarily hinder or obstruct pedestrian or vehicular traffic.

(6) Safety. All safety practices required by law shall be used during construction, maintenance, and repair of a cable system. A franchisee shall at all times employ reasonable care and shall install and maintain in use commonly accepted methods and devices preventing failures and accidents that are likely to cause damage, injury, or nuisance to the public.

(7) Prompt Repairs. Any and all public rights-of-way, public property, or private property that is disturbed or damaged during the construction, repair, replacement, relocation, operation, maintenance, or construction of a cable system shall be promptly repaired or restored by the franchisee within ten (10) days of the date of damage, at its expense, to as good condition as before said work was commenced as is possible to the reasonable satisfaction of the city (in the case of public rights-of-way) or the owner (in the case of private property).

(8) Tree Trimming. A franchisee shall have the authority to trim trees that overhang a public right-of-way of the city so as to prevent the branches of such trees from coming in contact with the wires and cables of the franchisee, and shall comply with the relevant provisions of Gilroy City Code Chapter 26. Notwithstanding that grant of authority, if the franchisee performs the work, it shall be fully liable for any damages caused thereby, and shall be responsible for replacing damaged trees and shrubs. At the option of the city, such trimming may be done by the city, at franchisee’s expense.

(9) Undergrounding.

a. Except in underground utility districts, franchisee’s cable system may be constructed overhead where poles now exist and electric and telephone lines are now overhead, but where either electric or telephone lines are underground, or are being initially placed underground, the cable system shall be constructed underground in accordance with existing city ordinances, regulations and practices at the time the cable system is constructed subject to any waivers that may be granted. Whenever and wherever the owner of the poles moves its plant from overhead to underground placement in an area, all cable system facilities and plant in that area shall be similarly moved underground by the franchisee as directed by the city administrator in accordance with then-existing city practices, subject to any waivers that may be granted.

b. A franchisee is expected to use, with the owner’s permission, existing underground conduits or overhead utility facilities whenever feasible. Copies of agreements for use of conduits or other facilities shall be filed with the city as required by a franchise agreement or upon request by the city. No poles or conduits shall be erected or installed without the prior permission of the city. If the city grants permission to place poles or conduits in the public rights-of-way, the city shall have the right to install and maintain free of charge upon any poles or in any conduit owned by a franchisee any wire and pole fixtures that do not unreasonably interfere with the cable system operations of the franchisee. Franchisee shall notify the city when it enters into an agreement with a third party for use of its poles and conduits. Copies of agreements for use of franchisee’s conduits or poles in the public rights-of-way or on other public property shall be available for review upon the city’s request.

c. Franchisee shall cooperate in the planning, locating and construction of its cable system in utility joint trenches or common duct banks with other telecommunications providers. The city will provide advance notice to any franchisee when it plans to open a trench and each franchisee shall provide advance notice to the city when it plans to open a trench and obtain any applicable city or other public agency permits. The franchisee and the city will offer to make space available to the other, and to other persons who participate in joint trenching, on reasonable terms.

(10) Contractors. Any contractor or subcontractor used for work or construction, installation, operation, maintenance, or repair of cable system equipment must be properly licensed under laws of the state and all applicable local ordinances, and each contractor or subcontractor shall have the same obligations with respect to its work as franchisee would have under this article and applicable law if the work were performed by franchisee. The franchisee shall be responsible for ensuring that the work of contractors and subcontractors is performed consistent with its franchise agreement and applicable law, shall be fully responsible for all acts or omissions of contractors or subcontractors, shall be responsible for promptly correcting acts or omissions by any contractor or subcontractor, and shall implement a quality control program to ensure that the work is properly performed. This section is not meant to alter tort liability of franchisee to third parties.

(11) Publicizing Proposed Construction Work. A franchisee shall publicize proposed construction work at least one (1) week prior to commencement of that work by causing written notice of such construction work to be delivered to the city and by notifying those persons most likely to be affected by the work in at least two (2) of the following ways: by telephone, in person, by mail, by distribution of flyers to residences, by publication in local newspapers, or in any other manner reasonably calculated to provide adequate notice. In addition, before entering onto any person’s property to construct or repair the cable system, a franchisee shall provide written notice to the property owner and the tenant, or in the case of residential property, the resident at least one (1) day in advance. If a franchisee must enter premises, it must schedule an appointment at the convenience of the owner or resident.

(12) Location of Facilities. A franchisee shall perform all tasks of an “operator” under California Government Code 42.16 (“Underground Service Alert”) and shall be a member of Underground Service Alert of Northern California and Nevada. A franchisee shall maintain current records of the location of its cable system for both underground and aerial cables. A franchisee shall provide information regarding the location of its cable system, including current “as-built” maps, upon request of the city or any authorized governmental body as soon as possible but in no event later than one (1) business day from date of request.

(j) Relocation Requirements.

(1) Relocation—Governmental Bodies. A franchisee shall, by a time specified by the city, protect, support, temporarily disconnect, relocate, or remove any of its property when required by the city or any other governmental entity, without expense to the city or governmental entity, by reason of traffic conditions; public safety; public right-of-way construction (including extension or widening of existing right-of-way or creation of new right-of-way); public right-of-way maintenance or repair (including resurfacing or widening); change of public right-of-way grade; construction, installation or repair of sewers, drains, water pipes, power lines, signal lines, tracks, or any other type of government-owned communications system, public work or improvement or any government-owned utility; public right-of-way vacation; or for any other purpose where the convenience of the city or such entity would be served thereby; provided, however, that the franchisee shall, in all such cases, have the privilege of abandoning any property in place.

(2) Relocation—Other Authorized Entities. If any removal, relaying, or relocation is required to accommodate the construction, operation, or repair of the facilities of another person that is authorized to use the public rights-of-way, a franchisee shall, after thirty (30) days advance written notice, take action to effect the necessary changes requested by the responsible entity. The city may resolve disputes as to responsibility for costs associated with the removal, relaying, or relocation of facilities as among entities authorized to install facilities in the public rights-of-way if the parties are unable to do so themselves, and if the matter is not governed by a valid contract between the parties or a state or federal law or regulation.

(3) Relocation—Emergency. In the event of an emergency, or where a cable system creates or is contributing to an imminent danger to health, safety, or property, the city may remove, relay, or relocate any or all parts of that cable system without prior notice.

(4) Relocation—Third Persons. A franchisee shall, on the request of any person holding a valid permit issued by a governmental authority, temporarily raise or lower its wires to permit the moving of buildings or other structures. The expense of such temporary removal or raising or lowering of wires shall be paid by the person requesting same, and the franchisee shall have the authority to require such payment in advance. The franchisee shall be given not less than forty-eight (48) hours advance notice to arrange for such temporary wire changes.

(k) Provision of Service/Quality of Service. In addition to satisfying such requirements as may be established through the franchise, every cable system shall be subject to the following conditions, except as prohibited by federal law:

(1) Provision of Service. Unless standards are otherwise specified in a franchise agreement, after cable service has been established by activating trunk distribution cable for an area specified in a franchise agreement, a franchisee shall provide cable service to any household or commercial establishment requesting cable service within that area, including each multiple dwelling unit in that area, except for multiple dwelling units to which it cannot legally obtain access, provided that, a franchise agreement 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 must be provided within time limits specified in subsection 24.25(k)(2).

(2) Time for Extension of Service. A franchisee must extend service to any person who requests it (i) within five (5) days of the request, where service can be provided by activating or installing a drop; (ii) within thirty (30) days of the request where an extension of one-half (1/2) mile or less is required; or (iii) within six months for areas where an extension of one-half (1/2) mile or more is required. Provided that, in cases where a franchise agreement permits a franchisee to require a potential subscriber to bear a share of extension or installation costs, and franchisee requires the potential subscriber to bear such costs, the time for extension shall be measured from the date the potential subscriber agrees to bear such costs or, if a franchisee requires prepayment of a portion of the estimated costs, from the date the prepayment is made. A franchisee that requires a potential subscriber to bear a portion of installation or extension costs must prepare and deliver to the requesting potential subscriber a written estimate of extension costs within seven days of a request for an installation or extension that would be subject to cost-sharing.

(3) Technical Standards. Any cable system within the city shall meet or exceed the technical standards set forth in 47 C.F.R. 76.601 and any other applicable technical standards.

(4) Tests. A franchisee shall perform all tests necessary to demonstrate compliance with the requirements of the franchise and other performance standards established by applicable law. Unless a franchise agreement or applicable law provides otherwise, all tests shall be conducted in accordance with federal rules and in accordance with the most recent edition of National Cable Television Association’s “Recommended Practices for Measurements on Cable Television Systems,” or if no recent edition exists, such other appropriate manual as the parties may designate. A franchisee shall notify the city on an annual basis of its testing schedule. A written report of any test results shall be filed with the city within seven (7) days of a request by the city. If the location fails to meet performance specifications, within a reasonable time the franchisee, without requirement of additional notice or request from city, shall take corrective action, retest the locations and advise the city of the action taken and results achieved.

(5) Inspections. The city may conduct inspections of the cable system including, without limitation, the headend, construction areas and subscriber installations to assess, among other things, the franchisee’s compliance with its franchise agreement and applicable law. If the franchisee is notified of any violations found during course of inspections, the franchisee must bring violations into compliance within thirty (30) days of the date notice of violation is given, and must submit a report to the city describing the steps taken to bring itself into compliance. Inspection does not relieve the franchisee of its obligation to build a cable system in compliance with all provisions of its franchise agreement and applicable law.

(l) System Maintenance.

(1) Interruptions to Be Minimized. A franchisee shall schedule maintenance so that activities likely to result in an interruption of service are performed during periods of minimum subscriber use of the cable system.

(2) Maintenance Practices. Each franchise agreement shall provide that the franchisee will be obligated to follow maintenance practices that will ensure that its cable system is maintained in accordance with the highest industry standards.

(m) Continuity of Service. Each franchise agreement shall provide that subscribers are able to receive continuous service and that, in the event the franchise is revoked or terminated, the franchisee shall be obligated to continue to provide service for a reasonable period to assure an orderly transition of service from the franchisee to another entity. (Ord. No. 97-1, 1-6-97)

24.26 Minimum access requirements.

(a) Franchisee Compliance. A franchisee shall meet or exceed the minimum access requirements set forth in this article.

(b) PEG Access. Based upon studies of this community, a review of other communities, comments received at a public hearing, meetings, interviews, surveys, and the experience of other communities in the development of such cable television systems as well as general developments in the cable industry, the city has determined that a minimum number of channels should be designated for public, educational and governmental access, and that additional channels should be available as channel use grows. It further concludes that, to facilitate the reception and efficient use of available resources, there must be guarantees: (i) that ensure each franchisee shall bear a fair share of the cost associated with public, educational and governmental access; (ii) that require such connections so that programming might be simultaneously transmitted over each cable system; and, (iii) to ensure that access facilities and equipment can continue to be used as cable system technology changes. In any specific franchise grants or renewals, different access requirements may be imposed to accommodate changes in access needs of the city, so long as the relative burden on any particular cable system compared to the burden on others is fair, considering other franchise differences, the time at which the franchise was issued, and the franchise term. Nothing in this section shall be read to impose obligations inconsistent with the requirements of 47 U.S.C. 546.

(c) Designated PEG Access Providers.

(1) The city may designate PEG access providers, including itself for governmental access purposes, to control and manage the use of any or all access facilities provided by a franchisee under this article. To the extent authorized by the city, the designated access provider shall have sole responsibility for operating and managing such access facilities.

(2) A franchisee shall cooperate with designated access providers in the use of the cable system and access facilities for the provision of PEG access. A franchisee may enter into operating agreements with designated access providers under which the designated access providers will facilitate and coordinate the provision of PEG access services.

(d) PEG Channel Capacity.

(1) A franchisee shall provide a minimum of four (4) downstream and upstream channels for PEG access.

(2) If PEG access channels are not being used for access purposes, a franchisee may request the city to establish rules and procedures to permit the franchisee to use such channel capacity for other services, together with rules and procedures providing for such use to cease when the channel capacity is required for access purposes.

(e) Access Interconnections. A 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 franchisee’s cable system and with other cable systems throughout the duration of this article.

(f) Change in Technology. 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 the acquisition of all necessary equipment, to ensure that the capabilities of access programmers are not diminished or adversely affected by such change.

(g) Technical Quality. 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 required by this article and all other applicable laws, rules, and regulations for subscriber channels. (Ord. No. 97-1, 1-6-97)

24.27 Operation and reporting provisions.

(a) Open Books and Records.

(1) Inspection. The city shall have the right upon thirty (30) days advance written notice to inspect and copy at any time during normal business hours all books and records reasonably necessary to monitor compliance with the terms of this ordinance, a franchise agreement, or applicable law; or reasonably necessary for the exercise of any right or duty of the city under the same. This right includes the right to inspect not only the books and records of a franchisee, but any such books and records held by an affiliate regardless of who holds them, a cable operator of the cable system, or any contractor, subcontractor or any person holding any form of management contract for the cable system. Each franchisee shall be responsible for collecting the information and producing it. For purposes of this article, the terms “books and records” shall be read expansively to include information in whatever format stored. Books and records requested shall be produced to the city at City Hall, except by agreement or pursuant to subsection 24.27(e) and subject to subsection 24.27(a)(2). Books and records shall be maintained in accordance with generally accepted accounting principles.

(2) Proprietary Information. Access to a franchisee’s books and records shall not be denied by the franchisee on the basis that said books and records contain proprietary information. However, all proprietary information received by the city from a franchisee and clearly marked as such shall not be publicly disclosed insofar as permitted by the California Public Records Act, Government Code 6254, et seq., and other applicable law. The city will notify franchisee if any third party seeks release of any document marked confidential and the city will withhold release for the maximum period permitted by law to provide the franchisee the opportunity to seek court protection against the release of the requested documents.

(3) Public Inspection. The franchisee shall maintain a file of records open to public inspection in accordance with applicable FCC rules and regulations.

(b) Production of Documents upon Request.

(1) Agency Reports. Upon request, and except as provided under subsection 24.27(c), a franchisee shall file with the city all reports required by the FCC including, without limitation, any proof of performance tests and results, Equal Employment Opportunity (“EEO”) reports, and all petitions, applications, and communications of all types directly related to the cable system, or a group of cable systems of which the franchisee’s cable system is a part, submitted or received by the franchisee, an affiliate, or any other person on the behalf of the franchisee, either to or from the FCC, the Security and Exchange Commission, or any other federal or state regulatory commission or agency having jurisdiction over any matter affecting operation of the franchisee’s cable system. Provided that, nothing herein requires the franchisee to produce regulatory or court filings that are treated by the agency or court as confidential, such as Hart-Scott-Rodino Act filings. Nothing in this subsection 24.27(b)(1) affects any rights the city may have to obtain books and records under subsection 24.27(a).

(2) Automatic Delivery of Certain Documents. Franchisee shall also deliver to the city the following:

a. Notices of deficiency or forfeiture related to the operation of the cable system; and

b. Copies of any request 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 the franchisee directly or indirectly. This material shall be submitted to the city at the time it is filed or within ten (10) days of the date it is received.

(c) Reports.

(1) Quarterly Reports. Within forty-five (45) days of the end of each calendar quarter, a franchisee shall submit a report to the city containing the following information:

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

b. The number and type of outages known by the franchisee for the prior quarter, identifying separately the following: each planned outage, the time it occurred, its duration, and the estimated area and number of subscribers affected; each known unplanned outage, the time it occurred, its estimated duration and the estimated area and the number of subscribers affected, and if known, the cause; the total estimated hours of known outages as a percentage of total hours of cable system operation. An outage is a loss of sound or video on any signal, or a significant deterioration of any signal affecting two (2) or more subscribers; and other information a franchisee is required to submit to the city on a quarterly basis pursuant to this article.

(2) Annual Reports. No later than ninety (90) days after the end of its fiscal year, a franchisee shall submit a written report to the city administrator in a form directed by the city administrator, which shall include:

a. A summary of the previous year’s activities in the development of the cable system, including but not limited to descriptions of services begun or discontinued, the number of subscribers gained or lost for each category of service;

b. A summary of complaints for which records are required under subsection 24.27(d)(1), identifying both the number and nature of the complaints received and an explanation of their dispositions;

c. A balance sheet as of the last day of the fiscal year and the related statement of revenues, expenses and charges in retained earnings, and statement of cash flows for the year then ended, all of which shall be fully audited or shall be certified;

d. An ownership report, indicating all persons who at the time of the filing control or own an interest in the franchisee of ten (10) percent or more

e. A list of officers and members of the board of directors of the franchisee and any affiliates directly involved in the operation or the maintenance of the cable system;

f. An organizational chart showing all corporations or partnerships with more than a ten (10) percent interest ownership in the franchisee, and the nature of that ownership interest (limited partner, general partner, preferred shareholder, etc.); and showing the same information for each corporation or partnership that holds such an interest in the corporations or partnerships so identified and so on until the ultimate corporate and partnership interests are identified;

g. An annual report of each entity identified in subsection 24.27(c)(2)d. which issues an annual report;

h. A report on the cable system’s technical tests and measurements;

i. A complete report on its plant, which shall state the physical miles of plant construction and plant in operation during the fiscal year, including any revisions to the cable system “as built” maps filed with the city, and which shall report the results of appropriate electronic measurements conducted in conformance with applicable law;

j. A proposed schedule of plant construction for the upcoming fiscal year; and

k. Such other information as the city administrator or the city council may direct. If, as of January first of any year, the information required by subsections 24.27(c)(2)d.—f. is the same as was reported to the city in the prior year, the franchisee need only so state.

(3) Presentation of Report. The annual report shall be presented at a regular public meeting of the city council to be held no earlier than ten (10) days following submission of the report.

(4) Special Reports. Upon the city’s request, each franchisee shall submit construction reports and make available for review updated as-built system design maps for its cable system for any construction undertaken during the term of the franchise. The maps shall be developed on the basis of post-construction inspection by the franchisee and construction personnel to assess compliance with system design. Any material departures from design must be indicated.

(5) General Reports. Each franchisee shall prepare and furnish to the city, at the times and in the form prescribed by the city, such reports with respect to its operation, affairs, transactions or property, as may be reasonably necessary or appropriate to the performance of any of the rights, functions or duties of the city in connection with this article or a franchise agreement.

(d) Records Required. A franchisee shall at all times maintain:

(1) Complaints. Records of all complaints received with information sufficient to allow the franchisee to prepare the reports required in this section 24.27. The term “complaints” as used herein and throughout this article refers to complaints about any aspect of the cable system or franchisee’s operations, including, without limitation, complaints requiring service calls, and complaints about employee courtesy, billing, prices, programming, outages and signal quality;

(2) Plans. A full and complete set of plans, records, and “as built” maps showing the exact location of all system equipment installed or in use in the city, including subscriber service drops;

(3) Outages. Records of outages, indicating date, duration, area, and the estimated number of subscribers affected, type of outage, and cause;

(4) Service Calls. Records of service calls for repair and maintenance indicating the date and time service was required, the date of acknowledgment and date and time service was scheduled (if it was scheduled), and the date and time service was provided, and (if different) the date and time the problem was solved;

(5) Installations. Records of installation/reconnection and requests for service extension, indicating date of request, date of acknowledgment, and the date and time service was extended; and

(6) Public File. A public file showing its plan and timetable for construction of the cable system.

(e) Voluminous Materials. If any books, records, plans, or other documents requested under this article are too voluminous, or for security reasons cannot be copied and moved, then a franchisee may request that the inspection take place at some other location, provided that (i) the franchisee must make necessary arrangements for copying documents selected by the city after review; and (ii) the franchisee must pay all travel and copying expenses incurred by the city in inspecting those documents or having those documents inspected by its designee.

(f) Retention of Records; Relation to Privacy Rights. Franchisee shall ensure that it is able to provide the city all information which must be provided or may be requested under this article or a franchise agreement, including providing appropriate subscriber privacy notices. Nothing in this section shall be read to require a franchisee to violate 47 U.S.C. 551. Franchisee shall be responsible for preserving the confidentiality of any data that federal law prevents it from providing to the city. Records shall be kept for at least five (5) years. (Ord. No. 97-1, 1-6-97)

24.28 Performance evaluation.

(a) Performance Evaluation Sessions. The city may, at its discretion, hold performance evaluation sessions. All such evaluation sessions shall be open to the public, and announced in a newspaper of general circulation.

(1) Evaluation Topics. Topics that may be discussed at any evaluation session may include, but are not limited to, system construction and performance, franchisee compliance with this article and the franchise agreement, customer service and complaint response, subscriber privacy, services provided, programming offered, service rate structures, franchise fees, penalties, free or discounted services, applications of new technologies, judicial and FCC filings, and line extensions.

(2) Full Cooperation. During the review and evaluation by the city, a franchisee shall fully cooperate with the city and shall provide such information and documents as the city may need to reasonably perform its review. (Ord. No. 97-1, 1-6-97)

24.29 Rate regulation.

(a) Scope and Applicability. The city reserves all rights to implement and impose regulation of a franchisee’s rates and charges to the maximum extent permitted by law, and may do so by amendment to this article, by separate ordinance, by amendment to a franchise agreement, or in any other lawful manner. Nothing in this article shall prohibit the city from regulating a franchisee’s rates and charges.

(b) Changes of Rates and Charges by Franchisee. Except as federal law may otherwise expressly provide, a franchisee may not change its rates and charges unless it has first given a minimum thirty (30) calendar days prior written notice of such change to the city and to all subscribers.

(c) Regulation of Rates for Basic Cable Service. The city regulates rates for basic cable service and equipment within the city to the extent permitted under applicable law. City of Gilroy Resolution 93-69 and 47 C.F.R., Part 76, Subpart N govern the regulation of rates for basic cable service and equipment within the city for any franchisee which has been notified that (i) the city has been certified to regulate its basic service and equipment rates; and (ii) the city has adopted regulations governing regulation of basic service and equipment rates. (Ord. No. 97-1, 1-6-97)

24.30 Franchise fee.

(a) Amount of Franchise Fee. A franchisee, as compensation for the privilege granted under a franchise for the use of the public rights-of-way to construct and operate a cable system to provide cable service, shall pay to the city a franchise fee in an amount up to a maximum of either (1) five (5) percent of gross revenues; or (2) if a greater amount than that specified in (1) above, the maximum amount permitted by the Cable Act, as amended. The amount of compensation is based upon the nature of the services to be provided. If a franchise, either specifically or as a matter of law, permits a franchisee to provide services in addition to cable service, then the city may require the franchisee to pay additional compensation.

(b) Payment of Franchise Fee. Unless otherwise specified in a franchise agreement, a franchisee shall pay the franchise fee due to the city on a quarterly basis. Payment for each quarter shall be made to the city not later than thirty (30) days after the end of each calendar quarter.

(c) Quarterly Statement of Gross Revenues. Unless a franchise agreement provides otherwise, a franchisee or other entity subject to a fee under this provision shall file with the city within thirty (30) days of the end of each calendar quarter a financial statement showing the franchisee’s or such entity’s gross revenues during the preceding quarter and the number of subscribers served.

(d) Acceptance of Payment Not a Release. No acceptance by the city of any franchise fee payment shall be construed as an accord that the amount paid is in fact the correct amount, nor shall such acceptance of payment be construed as a release of any claim the city may have for additional sums payable.

(e) Franchise Fee Not in Lieu of Taxes. The franchise fee payment is not a payment in lieu of any tax, fee or other assessment (including but not limited to, business license fees).

(f) Annual Statement of Gross Revenue. A franchisee or other entity subject to a fee under this provision shall file within ninety (90) days following the end of each of its fiscal years a 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 including, without limitation, a detailed analysis of franchise fee payments made by the franchisee, or any affiliate, during the life of the franchise, showing (i) total gross revenues, by category (e.g., basic, pay, pay-per-view, advertising, installation, equipment, late charges, miscellaneous, other); (ii) what revenues, by category, were included in the calculation of the franchise fee, so that it is clear what, if any, revenues were not included and the dollar value of those exclusions; (iii) the value of any non-cash compensation received (e.g., trades for advertising spots), showing what amounts of non-cash compensation were included in the franchise fee calculation; (iv) what, if any, deductions were made from revenues in calculating the franchise fee (e.g., bad debt), and the amount of each deduction; (v) if an outside agency was used to collect revenue (e.g., a collection agency, an advertising agency paid on the basis of percentage of sales), how much revenue was received by these agencies; and (vi) the total amount of revenues included for purposes of the franchise fee calculation. The statement shall be certified by a certified public accountant or the chief financial officer of the person or persons paying the fee. The franchisee will bear the cost of the preparation of such financial statements. To the extent that franchisee submits financial statements that are prepared by other than an independent certified public accountant or which are not audited, the city shall require franchisee to submit to the city, but no more than once in a three-year period, an audited report of an independent certified public accountant which verifies the accuracy of the financial statements submitted by the franchisee during the previous three-year period, which audit shall be performed by an independent certified public accountant in good standing with the California State Board of Accountancy. The audit shall be conducted in accordance with generally accepted auditing standards. If an audited report discloses that additional amounts are owing to city, the statutes of limitations as to the additional amounts owed shall not begin to accrue until the audited report is delivered to city.

(g) City’s Right to Audit Books and Records. The city may, from time to time, and upon reasonable notice, inspect and audit any and all books and records relevant to the determination of gross revenues and the computation of franchise fees due, and may recompute any amounts determined to be payable. If, as a result of the audit, the city determines that the franchisee has underpaid the franchise fees owed in an amount exceeding three (3) percent of the franchise fees actually paid, the cost of the audit shall be borne by the person responsible to pay the fee. The audit shall be performed in the city, and it shall be the responsibility of the person subject to the fee to have all books and records necessary to satisfactorily perform the audit readily available to the auditors.

(h) Failure to Pay Franchise Fee. In the event that a franchise fee payment is not received by the city on or before the due date set forth in subsection 24.30(b) above, or is underpaid, the person subject to the fee will be charged interest from the due date at an interest rate equal to three (3) percent above the rate for three-month federal treasury bills at the most recent United States Treasury Department sale of such treasury bills occurring prior to the due date of the franchise fee payment. In addition, the person subject to the fee will pay a late charge of five (5) percent of the amount of the unpaid or underpaid franchise fee payment.

(i) Final Statement of Gross Revenues. When a franchise terminates for whatever reason, the franchisee shall file with the city within ninety (90) calendar days of the date its operations in the city cease a financial statement, certified by a certified public accountant or the franchisee’s chief financial officer, showing the gross revenues received by the franchisee since the end of the previous fiscal year. Adjustments will be made at that time for franchise fees due to the date that the franchisee’s operations ceased. (Ord. No. 97-1, 1-6-97)

24.31 Insurance; indemnification.

(a) Insurance Required. Throughout the entire term of the franchise, a franchisee shall maintain, and by its acceptance of a franchise specifically agrees that it will maintain, at least the following liability insurance coverage insuring the city and the franchisee, all at franchisee’s sole cost: worker’s compensation and employer liability insurance to meet all requirements of California law and comprehensive general liability insurance with respect to the construction, operation, and maintenance of the cable system and the conduct of the franchisee’s business in the city, in the minimum amounts of:

(1) One million dollars ($1,000,000.00) for property damage resulting from any one accident;

(2) Five million dollars ($5,000,000.00) for personal bodily injury or death resulting from any one accident; and

(3) Two million dollars ($2,000,000.00) for all other types of liability.

Such insurance shall be written on an occurrence basis and not on a claims made basis.

(b) Business Automobile Insurance. Franchisee shall, during the entire term of the franchise and at no expense to city, maintain business automobile insurance, in the amount of one million dollars ($1,000,000.00) per occurrence on account of bodily or personal injuries, including death, and on account of property damage, arising from or caused directly or indirectly, by the conduct of franchisee’s business in the city. This insurance shall be a per occurrence policy and shall not be written on a claims made basis.

(c) Additional Insurance. Franchisee, in addition to all other insurance requirements herein, shall maintain insurance in the type and amount as may be required in any license, permit or agreement obtained in connection with the construction, operation, or repair of its cable system or which is necessary to complete any construction, operation, or repair (e.g., highway permit, railroad crossing agreement, Corps of Engineers permit), regardless of who secured the license, permit, or agreement.

(d) Qualifications of Insurers. All insurance policies shall be with insurers qualified to do business in the State of California, with an A-1 or better rating of insurance by Best’s Key Rating Guide, Property/Casualty Edition, and in a form approved by the city.

(e) Policies Available for Review. All insurance policies shall be available for review by the city at city’s offices within two (2) days after request by city, and a franchisee shall keep on file with the city certificates of insurance executed by the insurance company or companies involved and submitted to the city before or at the time franchisee executed a franchise agreement. Not later than thirty (30) days before expiration of a policy, new certificates of insurance shall be filed with city evidencing extension of the policy term. All insurance amounts shall be subject to increase from time to time by resolution of the city council, provided increase shall occur not more than once per year.

(f) Additional Insureds; Prior Notice of Policy Cancellation. All general liability insurance policies shall name the city, its officers, boards, commissions, commissioners, agents, and employees as additional insureds, and all policies shall further provide that any cancellation or reduction in coverage shall not be effective unless thirty (30) days prior written notice thereof has been given to the city. A franchisee shall not cancel any required insurance policy without submission of proof that the franchisee has obtained alternative insurance satisfactory to the city which complies with this article.

(g) Failure Constitutes Material Violation. Failure to comply with the insurance requirements set forth in this section shall constitute a material violation of a franchise.

(h) Indemnification.

(1) Each franchise agreement shall contain an indemnification provision which shall provide that the franchisee shall, at its sole cost and expense, indemnify, hold harmless, and defend the city, its officials, boards, commissions, commissioners, agents, and employees, against any and all claims, suits, causes of action, actions, proceedings, judgments, damages, equitable relief, costs, fees, losses, liabilities and expenses arising out of the construction, maintenance, or operation of its cable system; copyright infringements or a failure by the franchisee to secure consents from the owners, authorized distributors, or franchisees of programs to be delivered by the cable system; the conduct of the franchisee’s business in the city; or in any way arising out of the franchisee’s enjoyment or exercise of a franchise granted hereunder, regardless of whether the act or omission complained of is authorized, allowed, or prohibited by applicable law or a franchise agreement.

(2) Without limiting the foregoing, the franchisee shall, at its sole cost and expense, fully indemnify, defend, and hold harmless the city, and city’s officials, boards, commissions, commissioners, agents, and employees from and against any and all claims, suits, actions, proceedings, judgments, damages, equitable relief, costs, fees, liabilities and expenses subject to Section 638 of the Cable Act, 47 U.S.C. 558, arising out of or alleged to arise out of the installation, construction, operation, or maintenance of its system, including but not limited to any claim against the franchisee for invasion of the right of privacy, defamation of any person, firm or corporation, or the violation or infringement of any copyright, trade mark, trade name, service mark, or patent, or of any other right of any person, firm, or corporation. This indemnity does not apply to programming carried on any channel set aside for public, educational, or governmental access use, or channels leased pursuant to 47 U.S.C. 532, unless the franchisee was in any respect engaged in determining the editorial content of the program, or adopts a policy of prescreening programming for the purported purpose of banning or regulating indecent or obscene programming.

(3) The indemnity provision includes, but is not limited to, the city’s reasonable attorneys’ fees incurred in defending against any such claim, suit, or proceeding.

(4) The city shall notify the franchisee in writing of its duty to indemnify in any case subject to the indemnity in which the franchisee is not named defendant or plaintiff. The franchisee shall employ competent counsel, reasonably acceptable to the city attorney.

(i) No Limit of Liability. The provisions of this section 24.31. shall not be construed to limit the liability of a franchisee for damages under any franchise issued hereunder. (Ord. No. 97-1, 1-6-97)

24.32 Performance guarantees.

(a) Security Fund.

(1) Security Fund Deposit. Prior to a franchise becoming effective, the franchisee shall post with the city and maintain a cash security deposit to be used as a security fund to ensure the franchisee’s faithful performance of and compliance with all provisions of this article, the franchise agreement, and other applicable law, and compliance with all orders, permits, and directions of the city, and the payment by the franchisee of any claims, liens, fees, or taxes due the city which arise by reason of the construction, operation, or maintenance of the cable system. The amount of the security fund shall be set forth in the franchise agreement in an amount not less than fifty thousand dollars ($50,000.00) except that a franchise agreement may provide for a smaller security fund for cable systems franchised to serve less than the entire city where the city determines that the size of the cable system justifies a smaller security fund.

(2) Letter of Credit. In lieu of a cash security fund, a franchisee may file and maintain with the city an irrevocable letter of credit with an acceptable surety in the amount specified in the preceding paragraph to serve the same purposes as set forth therein. Said letter of credit shall remain in effect for the full term of the franchise plus an additional six (6) months thereafter. The franchisee and its surety shall be jointly and severally liable under the terms of the letter of credit for the franchisee’s failure to faithfully perform and comply with all provisions of this article, the franchise agreement, and other applicable law, and to comply with all orders, permits, and directions of the city, and to pay any claims, liens, fees, or taxes due the city which arise by reason of the construction, operation, or maintenance of the cable system. The letter of credit shall provide for thirty (30) days prior written notice to the city of any intention on the part of the franchisee to fail to renew or otherwise materially alter its terms. Neither the filing of a letter of credit with the city, nor the receipt of any damages recovered by the city thereunder, shall be construed to excuse faithful performance by the franchisee or limit the liability of the franchisee under the terms of its franchise for damages, either to the full amount of the letter of credit or otherwise.

(3) Reserved Rights. The rights reserved to the city with respect to the security fund are in addition to all other rights of the city, whether reserved by this article or authorized by other law or a franchise agreement, and no action, proceeding, or exercise of a right with respect to such security fund or letter of credit will affect any other right the city may have.

(4) Procedures. The franchise agreement shall set forth the procedures for drawing on the security fund and letter of credit.

(b) Performance Bond.

(1) Performance Bond. Prior to any cable system construction, upgrade, or other work in the public rights-of-way required by the franchise agreement, a franchisee shall establish in the city’s favor a performance bond in an amount, and subject to such terms, established by the city consistent with its normal practices, and said bond shall state that it ensures the franchisee’s faithful performance of the construction, upgrade, or other work.

(2) Recovery. In the event a franchisee subject to such a performance bond fails to complete the cable system construction, upgrade, or other work in the public rights-of-way in a safe, timely, and competent manner in accord with the provisions of a franchise agreement, there shall be recoverable, jointly and severally from the principal and surety of the bond, any damages or loss suffered by the city as a result, including the full amount of any compensation, indemnification, or cost of removal or abandonment of any property of the franchisee, or the cost of completing or repairing the cable system construction, upgrade, or other work in the public rights-of-way, plus a reasonable attorneys’ fee. The city may also recover against the bond any amount recoverable against the security fund where such amount exceeds that available under the security fund, and said bond shall so state.

(3) Elimination of Bond. Upon completion of the cable system construction, upgrade, or other work in the public rights-of-way and payment of all construction obligations of the cable system to the satisfaction of the city, the city shall eliminate the bond or reduce its amount after a time appropriate to determine whether the work performed was satisfactory, which time shall be established considering the nature of the work performed. The city may subsequently require a new bond or an increase in the bond amount for any subsequent construction, upgrade, or other work in the public rights-of-way.

(4) Bond Rating. The performance bond shall be issued by a surety with an A-1 or better rating of insurance in Best’s Key Rating Guide, Property/Casualty Edition; shall be subject to the approval of the city; and shall contain the following endorsement:

This bond may not be canceled, or allowed to lapse, until sixty (60) days after receipt by the city, by certified mail, return receipt requested, of a written notice from the issuer of the bond of intent to cancel or not to renew.

(c) Failure Constitutes Material Violation. Failure to maintain the security fund, letter of credit, or performance bond shall constitute a material violation of a franchise. (Ord. No. 97-1, 1-6-97)

24.33 Remedies and penalties.

(a) Remedies. In addition to any other remedies available at law or equity, the city may apply any one or a combination of the following remedies in the event a franchisee violates this article, its franchise agreement, or applicable law:

(1) Revocation/Shortened Term. Revoke the franchise or shorten the term thereof pursuant to the procedures specified in this article.

(2) Penalties. Impose any penalties or remedies available under applicable state or local laws for violation of city ordinances.

(3) Other Relief. In addition to or instead of any other remedy, seek legal or equitable relief from any court of competent jurisdiction.

(4) Franchise Agreement Remedies. Apply any remedy provided for in a franchise agreement, including liquidated damages and/or enforcement provisions, if any.

(b) Revocation or Termination of Franchise.

(1) Material Breach. A franchise may be revoked or shortened by the city council for the franchisee’s failure to construct, operate or maintain the cable system as required by this article or the franchise agreement, or for any other material violation of this article or material breach of the franchise agreement. If within thirty (30) calendar days following written notice from the city to the franchisee that it is in material violation of this article or in material breach of the franchise agreement, the franchisee has not, to the city’s satisfaction, taken corrective action or corrective action is not being actively and expeditiously pursued, the city may give written notice to the franchisee of its intent to consider revocation or shortening of the franchise, stating its reasons.

(2) Public Hearing. Prior to revoking or shortening a franchise, the city council shall hold a public hearing, upon at least thirty (30) calendar days notice, at which time the franchisee and the public shall be given an opportunity to be heard. Following the public hearing the city council may determine whether to revoke or shorten the franchise based on the evidence presented at the hearing, and other evidence in the record. If the city council determines to revoke or shorten a franchise, it shall issue a written decision setting forth the reasons for its decision. A copy of such decision shall be transmitted to the franchisee.

(3) Bankruptcy, Receivership, etc. Any franchise may, at the option of the city following a public hearing before the city council, be revoked or shortened one hundred twenty (120) calendar 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, unless within that one hundred twenty (120) day period:

a. Such assignment, receivership or trusteeship has been vacated; or

b. Such assignee, receiver or trustee has fully complied with the terms and conditions of this article and the franchise agreement and has executed an agreement, approved by a court having jurisdiction, assuming and agreeing to be bound by the terms and conditions of this article and the franchise agreement.

(c) Foreclosure. In the event of foreclosure or other judicial sale of any of the facilities, equipment or property of a franchisee, the city may revoke or shorten the franchise, following a public hearing before the city council, by serving notice upon the franchisee and the successful bidder at the sale, in which event the franchise and all rights and privileges of the franchise will be revoked and will terminate thirty (30) calendar days after serving such notice, unless:

(1) Transfer Approval. The city council has approved the transfer of the franchise to the successful bidder; and

(2) Bidder Covenants. The successful bidder has covenanted and agreed with the city to assume and be bound by the terms and conditions of the franchise agreement and this article.

(d) Procedures upon Revocation or Abandonment of a Franchise. If the city revokes a franchise, or if for any other reason a franchisee abandons, or fails to operate or maintain service to its subscribers, the following procedures and rights are effective:

(1) Equipment and Removal. The city may require the former franchisee to remove its facilities and equipment at the former franchisee’s expense. If the former franchisee fails to do so within a reasonable period of time, the city may have the removal done at the former franchisee’s and/or surety’s expense;

(2) Acquisition or Transfer. The city, by resolution of the city council, may acquire ownership or effect a transfer of the cable system at an equitable price; or

(3) Abandonment. If a cable system is abandoned by a franchisee, the city may sell, assign or transfer at an equitable price all or part of the assets of the cable system.

(4) Continuity of Service. The provisions herein shall be subject to and be interpreted so that they are consistent with any provisions in a franchise agreement designed to ensure continuity of service in the event a franchise is revoked or terminated, or the cable system is abandoned.

(e) City’s Acquisition of a Cable System. The city may, upon resolution of the city council, acquire ownership of and operate a cable system, whether or not such ownership is acquired following revocation or forfeiture of a franchise.

(f) Forfeiture.

(1) Automatic Forfeiture. Where the city has issued a franchise specifically conditioned in the franchise agreement upon the completion of construction, system upgrade or other specific obligations by a specified date, failure of the franchisee to complete such construction or upgrade, or to comply with such other specific obligations as required will result in the automatic forfeiture of the franchise without further action by the city where it is so provided in the franchise agreement, unless the city, at its discretion and for good cause demonstrated by the franchisee, grants an extension of time.

(2) Public Hearing. No adverse action against a franchisee may be taken by the city pursuant to this subsection except after a noticed public hearing at which the franchisee is given an opportunity to participate.

(g) Remedies Cumulative. All remedies under this article and the franchise agreement are cumulative unless otherwise expressly stated. The exercise of one remedy shall not foreclose use of another, nor shall the exercise of a remedy or the payment of liquidated damages or penalties relieve a franchisee of its obligations to comply with its franchise. Remedies may be used singly or in combination; in addition, the city may exercise any rights it has at law or equity. Nothing herein shall be read to authorize the double-recovery of damages.

(h) Relation to Insurance and Indemnity Requirements. Recovery by the city of any amounts under insurance, the performance bond, the security fund or letter of credit, or otherwise does not limit a franchisee’s duty to indemnify the city in any way; nor shall such recovery relieve a franchisee of its obligations under a franchise, limit the amounts owed to the city, or in any respect prevent the city from exercising any other right or remedy it may have. Nothing herein shall be read to authorize the double-recovery of damages.

(i) Penalties. For violation of provisions of this article or a franchise granted pursuant to this article, penalties shall be chargeable as follows:

(1) Pursuant to the Charter of the City, section 1305, for exercising any privilege for which a franchise is required without possessing a valid and existing franchise: a misdemeanor punishable upon conviction by a fine not exceeding five hundred dollars ($500.00) or by imprisonment for a term not exceeding six (6) months or by both such fine and imprisonment. Each day such condition continues shall constitute a separate violation.

(2) Pursuant to California Government Code section 53088, for material breach, where the breach is out of the reasonable control of the franchisee, of consumer protection requirements and customer service standards adopted by the city or required by the franchise, this article, or by Federal Communications Commission (FCC) regulation: not more than two hundred dollars ($200.00) for each day of each material breach, not to exceed six hundred dollars ($600.00) for each occurrence of material breach. However, where the city has provided notice and a fine or penalty has been assessed, in a subsequent material breach of the same nature occurring within twelve (12) months, said penalties shall be increased to a maximum of four hundred dollars ($400.00) for each day of each material breach, not to exceed one thousand two hundred dollars ($1,200.00) for each occurrence of the material breach. Where a third or further material breach of the same nature occurs within those same twelve months, and the city has provided notice and a fine or penalty has been assessed, the penalties may be increased to a maximum of one thousand dollars ($1,000.00) for each day of each material breach, not to exceed three thousand dollars ($3,000.00) for each occurrence of the material breach. With respect to persons subject to a franchise or license, any monetary penalties assessed hereunder shall be reduced dollar-for-dollar to the extent any liquidated damage or penalty provision of a franchise agreement or license agreement imposes a monetary obligation upon a person for the same customer service failures, and no other monetary damages may be assessed.

The city shall give a person written notice of any alleged material breach of the customer service standards referred to herein and shall allow said person at least thirty (30) days from receipt of the notice to remedy the specified breach.

Material breach for the purposes of assessing penalties hereunder shall be deemed to have occurred for each day, following the expiration of the notice period, that any material breach has not been remedied by the person, irrespective of the number of customers affected.

(3) For failure to distribute the annual notice to subscribers as required by the city’s consumer protection standards for cable service subscribers: five hundred dollars ($500.00) for each year in which the notice is not distributed to all subscribers; provided, however, that city shall give written notice of any alleged failure to distribute to all customers the annual notice prior to imposing this penalty, and if the violation is cured within sixty (60) days after receipt of said notice, then no penalty shall be imposed.

(4) For failure to commence operations or to complete construction in accordance with the requirements of the franchise: one thousand dollars ($1,000.00) per day or part thereof for each day a violation continues.

(5) For transferring the franchise without approval: two thousand dollars ($2,000.00) per day or part thereof for each day a violation continues.

(6) For all other violations: two hundred and fifty dollars ($250.00) per day or part thereof for each day a violation continues. (Ord. No. 97-1, 1-6-97)

24.34 Transfers.

(a) City Approval Required. No transfer shall occur without prior written notice to and written approval of the city council, and only then upon such terms and conditions as the city deems necessary and proper. The franchisee’s obligations under the franchise involves personal services whose performance involves personal credit, trust, and confidence in the franchisee, and transfer without the prior written approval of the city shall be considered to impair the city’s assurance of due performance. The granting of approval for a transfer in one instance shall not render unnecessary approval of any subsequent transfer.

(b) Application.

(1) Prompt Notice. The franchisee shall promptly notify the city of any proposed transfer. If any transfer should take place without prior notice to the city, the franchisee will promptly notify the city that such a transfer has occurred.

(2) Application for Approval. At least one hundred twenty (120) calendar days prior to the contemplated effective date of a transfer, the franchisee shall submit to the city an application for approval of the transfer. Such an application shall provide complete information on the proposed transaction, including details on the legal, financial, technical, and other qualifications of the transferee, and on the potential impact of the transfer on subscriber rates and service. At a minimum, the following information must be included in the application; provided that, a franchisee is not required to duplicate information that it submits to the city to comply with its obligations under federal or state law:

a. All information and forms required under federal law or the equivalent of such forms if no longer required by federal law;

b. All information required in subsections 24.24(d)(6), (11), (13), (15) of this article;

c. A detailed statement of the corporate or other business entity organization of the proposed transferee, together with an explanation of how decisions regarding the cable system will be made if the proposed transaction is approved;

d. Any contracts or other documents that relate to the proposed transaction, and all documents, schedules, exhibits, or the like referred to therein;

e. Any shareholder reports or filings with the Securities and Exchange Commission (“SEC”) that discuss the transaction;

f. Any other information necessary to provide a complete and accurate understanding of the financial position of the cable system before and after the proposed transfer;

g. Complete information regarding any potential impact of the transfer on subscriber rates and service;

h. A brief summary of the proposed transferee’s plans for at least the next five (5) years regarding line extension, plant and equipment upgrades, channel capacity, expansion or elimination of services, and any other changes affecting or enhancing the performance of the cable system.

(3) City Inquiry. 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 under subsection 24.34(c). The franchisee and any prospective transferees shall assist the city in any such inquiry, and if they fail to do so, the request for transfer may be denied.

(c) Determination by City.

(1) Evaluation. In making a determination as to whether to grant, deny, or grant subject to conditions an application for a transfer of a franchise, the city shall consider 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 agreement and this article and, if not, the proposed transferee’s commitment to cure such noncompliance; whether the transferee owns or controls any other 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 subscribers, the city’s interest under this article, the franchise agreement, other applicable law, or the public interest, or make it less likely that the future cable-related needs and interests of the community would be satisfied at a reasonable cost.

(2) Ineffective Transfer. Any transfer without the city’s prior written approval shall be ineffective, and shall make this franchise subject to revocation and to any other remedies available under the franchise or other applicable law.

(d) Transferee’s Agreement. No application for a transfer of a franchise shall be granted unless the transferee agrees in writing that it will abide by and accept all terms of this article and the franchise agreement, and that it will assume the obligations, liabilities, and responsibility for all acts and omissions, known and unknown, of the previous franchisee under this article and the franchise agreement for all purposes, including renewal, unless the city, in its sole discretion, expressly waives this requirement in whole or in part.

(e) Approval Does Not Constitute Waiver. Approval by the city of a transfer of a franchise does not constitute a waiver or release of any of the rights of the city under this article or a franchise agreement, whether arising before or after the date of the transfer.

(f) Exceptions. Notwithstanding the foregoing, pledges in trust or mortgages of the assets of the system to secure the construction, operation or repair of the cable system may be made without the city’s prior consent; except that no such arrangement may be made which would in any respect under any condition prevent the franchisee or any successor from complying with the franchise and applicable law, nor may any such arrangement permit a third party to succeed to the interest of franchisee, or to own or control the cable system, without the prior consent of the city. Any mortgage, pledge or lease shall be subject and subordinate to the rights of the city under this article or other applicable law. (Ord. No. 97-1, 1-6-97)

24.35 Rights of individuals protected.

(a) Discriminatory Practices Prohibited.

(1) No Discrimination. A franchisee shall not deny service, deny access, or otherwise discriminate against subscribers, programmers, or residents of the city on the basis of race, color, religion, national origin, sex, or age.

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

(3) Uniform Access and Rates. A franchisee shall not deny access or levy different rates and charges on any group of potential residential cable subscribers because of the income of the residents of the local area in which such group resides.

(4) Permissible Discounts. Except to the extent the city may not enforce such a requirement, a franchisee is prohibited from discriminating in its rates or charges or from granting undue preferences to any subscriber, potential subscriber, or group of subscribers or potential 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 non-discriminatory basis to similar classes of subscribers throughout the city; and a franchisee may offer discounts for the elderly, the handicapped, 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. A franchisee shall comply at all times with all applicable federal, state, and city laws, and all executive and administrative orders relating to non-discrimination.

(5) Review of Initial Rates. All materials pertaining to the review of initial rates or any proposed rate increase, subject to the city’s regulatory authority, shall be submitted to the city for review and approval. Final determinations will be made by the city council and will take into consideration public comment as required by the Cable Act.

(b) Equal Employment Opportunity. 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, religion, national origin, sex, or age. A franchisee shall comply with all federal, state, and local laws and regulations governing equal employment opportunities, as the same may be from time to time amended.

(c) Nondiscrimination Requirements. A franchisee shall not discriminate against local businesses, including local minority-owned businesses, in contracting for or otherwise procuring goods or services.

(d) Subscriber Privacy. A franchisee shall at all times protect the privacy of all subscribers pursuant to the provisions of Section 631 of the Cable Act, 47 U.S.C. 551. A franchisee shall not condition subscriber service on the subscriber’s grant of permission to disclose information which, pursuant to federal or state law, cannot be disclosed without the subscriber’s explicit consent. A franchisee shall not place in the building, structure, or any facility of any subscriber any equipment capable of two-way communications without the written consent of the subscriber, revocable at the discretion of the subscriber, and shall not use the two-way communications capability of the cable system for unauthorized or illegal subscriber surveillance of any kind. (Ord. No. 97-1, 1-6-97)

24.36 Special rules for open video systems.

(a) Application for a Franchise.

(1) Franchise Required. Before constructing or operating an open video (“OVS”) system, an OVS operator must obtain an OVS franchise from the city. The grant of an OVS franchise does not obviate the obligation to obtain additional franchises and authorizations, as the city may require from time to time should the system provide other services; or obviate the obligation to pay such additional compensations the city may establish for use of the right-of-way to provide other services.

(2) Contents of Application for Initial or Renewal Franchise. In order to obtain an initial or renewal franchise, an operator of an OVS system must apply for a franchise. The application must contain the following information, and such information as the city may from time to time require. The franchise may not be transferred without the prior approval of the city.

a. Identity of the applicant; the persons who exercise working control over the applicant; and the persons who control those persons, to the ultimate parent.

b. A proposal for construction of the OVS system that sets forth at least the following:

1. A description of the services that are to be provided over the facility.

2. The location of proposed facility and facility design, including a description of the miles of plant to be installed, where it is to be located, and the size of facilities and equipment that will be located in, on, over, or above the rights-of-way.

3. Identification of the area of the city to be served by the proposed cable system, including a description of the proposed franchise area’s boundaries.

c. A description of the manner in which the system will be installed, and the time required to construct the system, and the expected effect on right-of-way usage, including information on the ability of the rights-of-way to accommodate the proposed system, including, as appropriate given the system proposed, an estimate of the availability of space in conduits and an estimate of the cost of any necessary rearrangement of existing facilities.

d. A description, where appropriate, of how services will be converted from existing facilities to new facilities, and what will be done with existing facilities.

e. Proof, attested to by a certified public accountant, that the applicant has the financial resources to complete the proposed project, and to construct, operate and repair the proposed facility over the franchise term. It is not the intent of the city to require an applicant to prove that the services it proposed to offer will succeed in the marketplace.

f. Proof that applicant is technically qualified to construct, operate and repair the proposed facility. At a minimum, the applicant must show that it has experience or resources to ensure that work is to be performed adequately, and can respond to emergencies during and after construction is complete.

g. Proof that the applicant is legally qualified, which proof must include a demonstration that the applicant:

1. Has received, or is in a position to receive, necessary authorizations from state and federal authorities;

2. Has not engaged in conduct (fraud, racketeering, violation of antitrust laws, consumer protection laws, or similar laws) that allows city to conclude the applicant cannot be relied upon to comply with requirements of franchise, or provisions of this title;

3. Is willing to enter into a franchise, to pay required compensation and to abide by the provisions of applicable law, including those relating to the construction, operation or maintenance of its facilities, and has not entered into any agreement that would prevent it from doing so;

h. An affidavit or declaration of the applicant or authorized officer thereof certifying the truth and accuracy of the information in the application, and certifying that the application meets all requirements of applicable law.

(3) Additional Information Regarding Affiliates; Presumptions. To the extent that the applicant is in any respect relying on the financial or technical resources of another person, including another affiliate, the proofs required under subsections 24.36(a)(2)e.—g. should be provided for that person. An applicant will be presumed to have the requisite financial, or technical or legal qualifications to the extent such qualifications have been reviewed and approved by a state agency of competent jurisdiction; or if applicant is a holder of a franchise in the city for a cable system, and conduct under other franchise provides no basis for additional investigation.

(4) Applications for Transfer. An application for a transfer of a franchise must contain same information required by subsection 24.36(a)(2) except that, if the transferor submitted an application under subsection 24.36(a)(2), to the extent information provided by the transferor under that section remains accurate, the transferee may simply cross-reference the earlier application.

(5) City Review. The city may request such additional information as it finds necessary, and require such modifications to the application as may be necessary in the exercise of the city’s authority over OVS facilities. Once the information required by the city has been provided, the application shall be promptly reviewed and shall be granted if the city finds that:

a. The applicant has the qualifications to construct, operate and maintain the system proposed in conformity with applicable law. The city shall provide a reasonable opportunity to an applicant to show that it would be inappropriate to deny it a franchise under subsection 24.36(a)(2)g.2., by virtue of the particular 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 telecommunications facilities. An application for a franchise area shall not be granted if the franchisee has no plans for constructing a system within the entire area for which the franchise is sought.

b. The applicant accepts the modifications required by the city to its proposed system. This section shall not be read to authorize the city to exercise authority it does not otherwise have under applicable law.

c. The applicant enters into a franchise agreement and complies with any conditions precedent to its effectiveness.

d. In the case of a transfer, the city must also determine that:

1. There will be no adverse effect on the public interest, or the city’s interest in the franchise;

2. Transferee agrees to be bound by all the conditions of the franchise and to assume all the obligations of its predecessor; and

3. Any outstanding compliance and compensation issues are resolved or preserved to the satisfaction of the city.

e. An applicant shall not be issued a franchise if it files or in the previous three (3) years: filed materially misleading information in a franchise application; or intentionally withheld information that the applicant lawfully is required to provide.

(6) Compensation. Every operator of an OVS system shall pay compensation to the city as follows:

a. To the extent that the system is used to provide cable services: a percentage of gross revenues each quarter equal to the gross revenue percentage paid by any cable operator for the same quarter. In addition, unless a franchise agreement provides otherwise, an OVS operator (1) shall pay to the city, at a time directed by the city, an amount equal to the highest amount contributed by any cable operator under its franchise for and in support of public, educational and government use (including institutional network use) of its cable system; and (2) to the extent that a cable operator is providing other support for public, educational or governmental use, the operator must duplicate that support within a time and in a manner directed by the city, or provide a cash equivalent acceptable to the city. In applying this section, the city shall ensure that the obligations borne by the OVS operator are no greater or lesser than the obligation imposed upon the cable operator providing the greatest benefits to the community. The compensation required under this section or specified in a franchise shall increase as the compensation that a cable operator is required to provide (in cash and in other forms) increases.

b. To the extent that the OVS system is used for the provision of telecommunications services, the OVS operator shall pay such fee as may be established from time to time by the city.

(7) Minimum Franchise Requirements. Every OVS franchise must require the applicant to comply with all provisions of the cable ordinance, as if the OVS system were a cable system, as may be permitted by applicable law; without limiting the foregoing, the franchise must ensure that the OVS system operator is obligated to comply with Sections 24.25, 24.30 (except as inconsistent with subsection 24.36(a)(5), compensation, above); section 24.31; section 24.32 and section 24.33 as if the OVS system were a cable system; and must preserve the cities’ rights to establish additional obligations from time to time and to regulate the system to the maximum extent permitted by law. Further, the franchise must ensure that the relevant books and records of the OVS system, no matter who may hold them, are available for inspection and copying; and that the OVS operator will prepare and submit such relevant reports as may be required by the city.

(8) Customer Service Standard Certification. An OVS system that enters into an agreement to comply with the customer service standards applicable to cable systems may be certified by the city for so long as it complies with those requirements and may advertise its compliance with those standards. (Ord. No. 97-1, 1-6-97)

24.37 Miscellaneous provisions.

(a) Compliance with Laws. Each franchisee shall comply with all applicable laws heretofore and hereafter adopted or established during the entire term of its franchise.

(b) Captions. The captions to sections throughout this article are intended solely to facilitate reading and reference to the sections and provisions of this article. Such captions shall not affect the meaning or interpretation of this article.

(c) No Recourse Against the City. Every franchise agreement shall provide that, without limiting such immunities as the city or other persons may have under applicable law, a franchisee shall have no recourse whatsoever against the city or its officials, boards, commissions, agents or employees for any loss, costs, expense or damage arising out of any provision or requirement of this article or because of the enforcement of this article or the city’s exercise of its authority pursuant to this article, a franchise agreement, or other applicable law.

(d) Connections to System; Use of Antennas.

(1) Subscriber Rights. To the extent consistent with federal law, subscribers shall have the right to attach VCRs, receivers, and other terminal equipment to a franchisee’s system. Subscribers also shall have the right to use their own remote control devices and converters, and other similar equipment.

(2) Franchisee Actions. A franchisee shall not, as a condition of providing service, require a subscriber or potential subscriber to remove any existing antenna, or disconnect an antenna except at the express direction of the subscriber or potential subscriber, provided that such antenna is connected with an appropriate device and complies with applicable law.

(3) Customer Service Standards. The city is hereby authorized to adopt customer service standards with which franchisee must comply. In addition, franchisee shall at all times satisfy any additional or stricter requirements established by applicable law including, without limitation, FCC customer service standards and consumer protection laws.

(e) Calculation of Time. Unless otherwise indicated, when the performance or doing of any act, duty, matter, or payment is required under this article or any franchise agreement, 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 duration time.

(f) Severability. If any term, condition, provision, section, subsection, subdivision, sentence, clause, phrase or word of this article shall, to any extent, be held to be invalid or unenforceable, the remainder hereof shall be valid in all other respects and continue to be effective. The city council hereby declares that it would have adopted this article and each and every provision herein, irrespective of the possibility that one or more provisions might be declared invalid. In the event of a subsequent change in applicable law so that any provision which had been held invalid is no longer invalid, said 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.

(g) Transitional Provisions.

(1) Persons Operating without a Franchise or License. The operator of any cable system, the operation of which is required to be franchised under this article, shall have three (3) months from the effective date of this article to file one (1) or more applications for a franchise under this ordinance. Any operator filing such an application shall not be subject to a penalty under applicable law for failure to have such a franchise as long as said application remains pending.

(2) Persons Holding Franchises. Any person holding an outstanding cable franchise from the city 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 the services authorized by the franchise; provided, however, that such franchisee may elect at any time to apply for a superseding franchise under this ordinance, and must seek additional franchises to provide additional services; and provided further that, such person shall be subject to the provisions of this article to the extent permitted by law. (Ord. No. 97-1, 1-6-97)

ARTICLE III. STATE VIDEO SERVICE FRANCHISES

24.38 General provisions.

(a) Purpose. This article is applicable to video service providers who have been awarded a state video franchise under the California Public Utilities Code section 5800 et seq. (the Digital Infrastructure and Video Competition Act of 2006 (“DIVCA”)), to provide cable or video services in any location(s) within the incorporated boundaries of the city. It is the purpose of this article to implement within the incorporated boundaries of the city the provisions of DIVCA and the rules of the California Public Utilities Commission promulgated thereunder that are applicable to a “local franchising entity” or a “local entity” as defined in DIVCA.

(b) Rights Reserved.

(1) The rights reserved to the city under this article are in addition to all other rights of the city, whether reserved by this article or authorized by law, and no action, proceeding or exercise of a right shall affect any other rights which may be held by the city.

(2) Except as otherwise provided by DIVCA, a state franchise shall not include, or be a substitute for:

a. Compliance with applicable 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, nonvideo services;

b. Any permit or authorization required in connection with operations on or in public rights-of-way or public property, including, but not limited to, encroachment permits, street work permits, pole attachment permits and street cut permits; and

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

(3) No permit issued by the city to a state franchise holder is itself a franchise, nor shall any permit create a vested right that would prohibit the city from revoking or amending the permit.

(c) Compliance with City Ordinances. Nothing contained in this article shall be construed so as to exempt a state franchise holder from compliance with all ordinances, rules or regulations of the city now in effect or which may be hereafter adopted which are consistent with this article or California Public Utilities Code section 5800 et seq., or any obligations under any franchise issued by the city insofar as those obligations may be enforced under California Public Utilities Code section 5800 et seq.

(d) Compliance with DIVCA. When a video service provider holding a state franchise provides notice to the city pursuant to California Public Utilities Code section 5840(m) that it is commencing to provide video service to the city, a holder of a local franchise is entitled to seek a state franchise pursuant to California Public Utilities Code section 5930(c) and upon the issuance of a state franchise by the California Public Utilities Commission for the franchise area, the local franchise shall terminate. (Ord No. 2009-06, § I, 12-7-09; Ord. No. 2010-01, § I, 1-11-10)

24.39 Definitions.

(a) Definitions Generally—Interpretation of Language. For purposes of this article the following terms, phrases, words, and their derivations shall have the meaning given in this article. Words not defined in this article shall have the same meaning as established in: (1) DIVCA and, if not defined therein, (2) California Public Utilities Commission rules implementing DIVCA and, if not defined therein, (3) Title VI of Title 47 of the Communications Act of 1934, as amended, 47 U.S.C. 521 et seq. and, if not defined therein, (4) their common and ordinary meaning. When not inconsistent with the context, words used in the present tense include the future, words in the plural number include the singular number, words in the singular number include the plural number, and “including” and “include” are not limiting. The words “shall” and “will” are always mandatory, but the use of those terms grants no private rights to any person with respect to the city. References to governmental entities (whether persons or entities) refer to those entities or their successors in authority. If specific provisions of law referred to herein are renumbered, then the reference shall be read to refer to the renumbered provision. References to laws, ordinances or regulations shall be interpreted broadly to cover government actions, however nominated, and include laws, ordinances and regulations now in force or hereinafter enacted or amended.

“Gross revenues” means all revenues actually received by the holder of a state franchise or its affiliates that are derived from the operation of the holder’s network to provide cable service or video service within the incorporated areas of the city.

“PEG access” or “PEG” means the availability of a cable or state franchise holder’s system for public, educational, or governmental use by various agencies, institutions, organizations, groups, and individuals, including organizations, groups, or individual members of the general public, educational institutions, and the city and its designated access providers, to acquire, create, and distribute programming not under a state franchise holder’s editorial control.

“State franchise holder” means a cable operator or video service provider that has been issued a franchise by the California Public Utilities Commission to provide cable service or video service, as those terms are defined in California Public Utilities Code section 5830, within any portion of the incorporated limits of the city. (Ord No. 2009-06, § I, 12-7-09; Ord. No. 2010-01, § I, 1-11-10)

24.40 Franchise fees.

(a) State Franchise Fees. Any state franchise holder operating within the incorporated areas of the city shall pay to the city a state franchise fee equal to five percent (5%) of gross revenues that may be subject to a franchise fee under California Public Utilities Code section 5860.

(b) Payment of Franchise Fees. The state franchise fee required pursuant to this article shall be paid quarterly, in a manner consistent with California Public Utilities Code section 5860. The state franchise holder shall deliver to the city, by check or other means, which shall be agreed to by the city, a separate payment for the state franchise fee not later than forty-five (45) days after the end of each calendar quarter. Each payment made shall be accompanied by a report, detailing how the payment was calculated, and shall include such additional information on the appropriate form as designated by the city.

(c) Examination of Business Records. The city may examine the business records of the holder of a state franchise in a manner consistent with California Public Utilities Code section 5860(i).

(d) Late Payments. In the event a state franchise holder fails to make payments required by this article on or before the due dates specified herein, the city shall impose a late charge at the rate per year equal to the highest prime lending rate during the period of delinquency, plus one percent (1%). (Ord No. 2009-06, § I, 12-7-09; Ord. No. 2010-01, § I, 1-11-10)

24.41 Customer service.

(a) Customer Service Standards. A state franchise holder shall comply with sections 53055, 53055.1, 53055.2 and 53088.2 of the California Government Code; the FCC customer service and notice standards set forth in sections 76.309, 76.1602, 76.1603, and 76.1619 of Title 47 of the Code of Federal Regulations; section 637.5 of the California Penal Code; the privacy standards of section 551 of Title 47 of the United States Code; and, to the extent consistent with DIVCA, all other applicable state and federal customer service and consumer protection standards pertaining to the provision of video service, including any such standards hereafter adopted. In case of a conflict, the stricter standard shall apply. All customer service and consumer protection standards under this subsection shall be interpreted and applied to accommodate newer or different technologies while meeting or exceeding the goals of the standards.

(b) Penalties for Violations of Standards. The city shall enforce the compliance of state franchise holders with respect to the state and federal customer service and consumer protection standards set forth in this article. The city will provide a state franchise holder with a written notice of any alleged material breaches, as defined in California Public Utilities Code section 5900, of applicable customer service or consumer protection standards, and will allow the state franchise holder thirty (30) days from the receipt of the notice to remedy the specified material breach. Material breaches not remedied by a state franchise holder within the thirty (30) day time period, irrespective of the number of customers affected, will be subject to the following penalties to be imposed by the city:

(1) For the first occurrence of a material breach, a fine of five hundred dollars ($500.00) may be imposed for each day the violation remains in effect, not to exceed one thousand five hundred dollars ($1,500) for each violation.

(2) For a second material breach of the same nature within twelve (12) months, a fine of one thousand dollars ($1,000) may be imposed for each day the violation remains in effect, not to exceed three thousand dollars ($3,000) for each violation.

(3) For a third material breach of the same nature within twelve (12) months, a fine of two thousand five hundred dollars ($2,500) may be imposed for each day the violation remains in effect, not to exceed seven thousand five hundred dollars ($7,500) for each violation.

(c) Any penalties imposed by the city shall be imposed in a manner consistent with California Public Utilities Code section 5900. (Ord No. 2009-06, § I, 12-7-09; Ord. No. 2010-01, § I, 1-11-10)

24.42 Permits and construction.

(a) Except as expressly provided in this article, all provisions of Chapter 20, and all city administrative rules and regulations developed to any of these provisions, as now existing or as hereafter amended, shall apply to all work performed by or on behalf of a state franchise holder on any city public rights-of-way, public property, or city easement.

(b) Permits. Prior to commencing any work for which a permit is required by Chapter 20, a state franchise holder shall apply for and obtain a permit in accordance with the provisions of Chapter 20 and shall comply with all other applicable laws and regulations, including but not limited to all applicable requirements of Division 13 of the California Public Resources Code, section 21000 et seq. (the California Environmental Quality Act).

(c) The city administrator or his or her designee shall either approve or deny state franchise holder’s application for any permit required under Chapter 20, within sixty (60) days of receiving a completed permit application from the state franchise holder.

(d) If the city administrator or his or her designee denies a state franchise holder’s application for a permit, the city administrator or his or her designee shall, at the time of notifying the applicant of denial, furnish to the applicant a detailed explanation of the reason or reasons for the denial.

(e) A state franchise holder that has been denied a permit by final decision of the city administrator or his or her designee may appeal the denial to the city council. Upon receiving a notice of appeal, the city council shall take one (1) of the following actions:

(1) Affirm the action of the city administrator or his or her designee without any further hearing; or

(2) Refer the matter back to the city administrator or his or her designee for further review with or without instructions; or

(3) Set the matter for a de novo hearing before the city council.

(f) In rendering its decision on the appeal, the city council shall not hear or consider any argument or evidence of any kind other than the record of the matter received from the city administrator or his or her designee unless the city council is itself conducting a public hearing on the matter.

(g) The issuance of a permit is not a franchise, and does not grant any vested rights in any location in the public rights-of-way, or in any particular manner of placement within the rights-of-way. Without limitation, a permit to place cabinets and similar appurtenances above ground may be revoked and the permittee required to place facilities underground, in accordance with applicable law. (Ord No. 2009-06, § I, 12-7-09; Ord. No. 2010-01, § I, 1-11-10)

24.43 Emergency alert system.

Each state franchise holder shall comply with the emergency alert system requirements of the Federal Communications Commission in order that emergency messages may be distributed over the state franchise holder’s network. To the extent consistent with California Public Utilities Code section 5880, each state franchise holder shall install and maintain an audio override on all channels for transmission of emergency messages and alerts, and shall provide for character generated “crawl” information to be superimposed on all channels for the hearing impaired, as such capability was required under local franchises in effect in the city on January 1 to December 30, 2006. (Ord No. 2009-06, § I, 12-7-09; Ord. No. 2010-01, § I, 1-11-10)

24.44 Public, educational, and government access channel capacity, support, interconnection, and signal carriage.

(a) PEG Channel Capacity.

(1) A state franchise holder shall designate a sufficient amount of capacity on its network to allow the provision of four (4) PEG channels to satisfy the requirement of section 5870 of the California Public Utilities Code, within the time limits specified therein.

(2) A state franchise holder shall provide an additional PEG channel when the city satisfies the standards set forth in section 5870(d) of the California Public Utilities Code or any entity designated by the city to manage one (1) or more of the PEG channels.

(b) PEG Support.

(1) Amount of PEG Support Fee. Any state franchise holder shall pay to the city—or if directed by the city, to the city’s designated PEG provider—a PEG fee equal to three percent (3%) of gross revenues, an amount equivalent to the level of PEG funding remitted by the incumbent cable operator to the city’s designated PEG provider during the period of January 1, 2006, to December 30, 2006.

(2) The PEG support fee shall be used for PEG activities, in a manner that is consistent with the terms of the incumbent cable operator’s franchise during the period of January 1, 2006, to December 30, 2006, and settlements.

(3) A state franchise holder shall remit the PEG support fee quarterly, within forty-five (45) days after the end of each calendar quarter. Each payment made shall be accompanied by a summary, detailing how the PEG support fee was calculated.

(4) In the event that a state franchise holder fails to pay the PEG support fee when due, or underpays the proper amount due, the state franchise holder shall pay interest at the rate per year equal to the highest prime lending rate during the period of delinquency, plus one percent (1%), or the maximum rate specified by state law.

(5) Reauthorization of State Franchise Holder PEG Fees.

a. The fee on state franchise holders to support public, educational, and governmental channel facilities in subsections (b)(1) through (b)(4) of this section is reauthorized and shall remain unchanged and in full effect as to all state franchise holders.

b. The PEG fee in subsections (b)(1) through (b)(4) of this section shall automatically be reauthorized upon the expiration of any existing or future franchise certificate(s) held by any state franchise holder operating within the city of Gilroy.

c. This chapter shall automatically be reauthorized upon the expiration of any existing or future franchise certificate franchise(s) held by any state franchise holder operating within the city of Gilroy. This chapter shall so renew upon the future expiration of any franchise certificate(s) until such time that the city council takes formal affirmative action to cease the renewals.

(c) PEG Carriage and Interconnection.

(1) As set forth in sections 5870(b) and (g)(3) of the California Public Utilities Code, state franchise holders shall ensure that all PEG channels are receivable by all subscribers, whether they receive digital or analog service, or a combination thereof, without the need for any equipment other than that needed to receive the lowest cost tier of service. PEG access capacity provided by a state franchise holder shall be of similar quality and functionality to that offered by commercial channels (unless the PEG signal is provided to the state franchise holder at a lower quality or with less functionality), shall be capable of carrying a National Television System Committee (NTSC) television signal, and shall be carried on the state franchise holder’s lowest cost tier of service. To the extent feasible, the PEG channels shall not be separated numerically from other channels carried on the lowest cost tier of service and the channel numbers for the PEG channels shall be the same channel numbers used by any incumbent cable operator, unless prohibited by federal law. After the initial designation of the PEG channel numbers, the channel numbers shall not be changed without the agreement of the city unless federal law requires the change.

(2) Where technically feasible, each state franchise holder and each incumbent cable operator shall negotiate in good faith to interconnect their networks for the purpose of providing PEG programming. Interconnection may be accomplished by any means authorized under California Public Utilities Code section 5870(h). Each state franchise holder and incumbent cable operator shall provide interconnection of PEG channels on reasonable terms and conditions and may not withhold the interconnection. If a state franchise holder and an incumbent cable operator cannot reach a mutually acceptable interconnection agreement for PEG carriage, the city may require the incumbent cable operator to allow each state franchise holder to interconnect its network with the incumbent cable operator’s network at a technically feasible point on the state franchise holder’s network as identified by the state franchise holder. If no technically feasible point of interconnection is available, each state franchise holder shall make interconnection available to each PEG channel originator programming a channel in the city and shall provide the facilities necessary for the interconnection. The cost of any interconnection shall be borne by each state franchise holder requesting the interconnection unless otherwise agreed to by the parties. (Ord No. 2009-06, § I, 12-7-09; Ord. No. 2010-01, § I, 1-11-10; Ord. No. 2017-08, § I, 12-4-17)

24.45 Notices.

(a) Each state franchise holder or applicant for a state franchise shall file with the city a copy of all applications or notices that the state franchise holder or applicant is required to file with the California Public Utilities Commission.

(b) Unless otherwise specified in this article, all notices or other documentation that a state franchise holder is required to provide to the city under this article or the California Public Utilities Code shall be provided to both the city administrator and the city staff person in charge of cable and telecommunications, or their successors or designees. (Ord No. 2009-06, § I, 12-7-09; Ord. No. 2010-01, § I, 1-11-10)


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Editor’s note: Ord. No. 97-1, adopted Jan. 6, 1997, repealed and replaced Art. II of this chapter. Former Art. II derived from Ord. No. 759.