Chapter 5.24
CABLE COMMUNICATIONS FRANCHISES
Sections:
5.24.040 Rights reserved to the grantor.
5.24.050 Rights of subscribers.
5.24.060 Finance and insurance.
5.24.070 Regulation of franchise.
5.24.080 Cable usage corporation.
5.24.100 Design and construction.
5.24.110 Operations and maintenance.
5.24.130 Termination and regulation.
5.24.140 Franchise applications.
5.24.160 Enforcement mechanism.
5.24.180 Miscellaneous provisions.
5.24.010 Title.
The ordinance codified in this chapter shall be known and may be cited as the “Cable Communications Franchise Ordinance.” [Ord. 3914 § 2, 1988].
5.24.020 Definitions.
(A) For the purpose of this chapter, the following words, terms and phrases, and their derivations, shall have the meanings given in this section. When not consistent with the context, words used in the present tense include the future tense, words in singular number include the plural number. The word “shall” is always mandatory and not merely discretionary.
(1) “Cable Act” means the Cable Communications Policy Act of 1984, 47 U.S.C. Sections 521 through 559, as it may be amended from time to time.
(2) “Cable system” means a system of antennas, cable, amplifiers, towers, microwave links, cablecasting studios, and any other conductors, converters, terminals, equipment or facilities designed and constructed for the primary purpose of distributing television programming to subscribers or users and for the secondary purpose of producing, receiving, amplifying, storing, processing or distributing audio, video, digital or other forms of electronic or electrical signals, but not including telephone systems regulated by the Public Utilities Commission.
(3) “Cable usage corporation” means a nonprofit, public corporation, further defined in this chapter, established or authorized by the grantor, whose duties shall include the management and operation of services designated by the grantor.
(4) “Convertor” or “terminal” means a device which converts signals from one form or status to another.
(5) “Drop” means the cable and related equipment connecting the cable system’s plant to equipment at the subscriber’s premises.
(6) “FCC” means the Federal Communications Commission or its designated representative(s).
(7) “Franchise” means a written legal undertaking or action of the grantor which awards permission to a specific named person to use the streets and public ways for the purpose of installing, operating and maintaining a cable system pursuant to this chapter and a franchise agreement.
(8) “Franchise agreement” means a contract entered into between a grantee and the grantor pursuant to which the grantee acquires rights and obligations in lieu of or in addition to the rights and obligations set forth in this chapter.
(9) “Franchise area” means the territorial boundaries of the County of Santa Cruz as such boundaries may be amended from time to time by annexation.
(10) “Grantee” means the entity to which a franchise is granted for the construction, operation, maintenance and reconstruction of a cable system and the lawful successors, transferees or assignees of that entity.
(11) “Grantor” means the entity establishing this chapter for territory within its present and future jurisdiction, its elected Governing Body, and/or such representative person or entity as it may designate to act on cable communication matters in its behalf.
(12) “Gross revenues” means the annual total moneys, revenues or other things of value received by the grantee related to, or stemming from, any operations, programming, channel leasing, interconnection or retransmission of signals to or from a cable system, or other activities of a cable system except for taxes collected by a grantee on behalf of taxing authorities, except as such term may be defined in the franchise agreement.
(13) “Headend” means that central portion of the cable system where signals are introduced into and received from the balance of the cable system.
(14) “Institutional network” means a system or portion of a cable system intended primarily to service nonresidential subscribers.
(15) “Monitor” or “tap” means observing a signal, or the absence of a signal, where the observer is neither the sending nor receiving party and is not authorized by the sending and/or receiving party to observe the signal, whether the signal is observed or received by visual, electronic or any other means whatsoever.
(16) “Plant” means the transmitting medium and related equipment which transmits signals between the headend and subscribers, excluding drops.
(17) “Person” means any corporation, partnership, proprietorship, individual or organization authorized to do business in the State, or any natural person.
(18) “Program” or “programming” means the information content of a signal and the act or process of creating such content, whether that content is intended to be pictures and sound, sound only or any other form of information whatsoever.
(19) “Programmer” means any person or entity who or which provides program material or information for transmission by means of a cable system.
(20) “Resident” means any person residing in the franchise area or as otherwise defined by applicable law.
(21) “Section” means any section, subsection or provision of this chapter, or of a franchise under this chapter.
(22) “Service” means any specific kind or type of benefit or ability, or group of related benefits or abilities, obtained or made available to any person or entity, involving the use of a signal transmitted via a cable system, whether the signal and its content are the entire service or comprise only a part of a service which involves other elements of any number or kind.
(23) “Streets and public ways” means the surface and the space above and below any public street, sidewalk, alley or other public way or right-of-way of any type whatsoever.
(24) “Subscriber” means any person or other entity electing to subscribe to, for any purpose, a service provided by the grantee by means of or in connection with its cable system.
(25) “Tier” means a combination of signals and/or channels for which a specific identifiable price is charged.
(26) “User(s)” means any person or entity who either receives services from a cable system or who accomplishes any purpose by, in part or in whole, transmitting or receiving information via a cable system, or who creates programming for that purpose, or who receives and uses programming.
(27) “Year” means a specific year or part of a year referred to, or a full calendar year.
(B) Terms Not Defined. Words, terms or phrases not defined in this section shall first mean their special meanings or connotations in any industry, business, trade or profession where they commonly carry such special meanings. In the event such special meanings are not common, they shall mean their standard definitions as set forth in commonly used and accepted dictionaries of the English language. [Ord. 3914 § 2, 1988].
5.24.030 Grant of franchise.
(A) Authority to Grant Franchises. The grantor may grant a franchise for all of the grantor’s territory to any person who offers to provide a cable system under and pursuant to this chapter.
(B) Form. A franchise may, at the grantor’s sole option, take the form of an ordinance, license, permit, contract, agreement, resolution or any other form elected by the grantor.
(C) Grants Not Required. No provision of this chapter requires the granting of a franchise when, in the opinion of the grantor, it is in the public interest not to do so.
(D) Purpose. The purpose of a franchise shall be to identify and authorize its specific grantee and to identify and specify those terms, conditions, definitions, itemizations, specifications and other particulars of the agreement between the grantor and grantee which it represents. In so doing a franchise may clarify, extend and interpret the provisions of this chapter. Where a franchise agreement and this chapter conflict, both shall be interpreted to achieve a common meaning or requirement. In the event this is not possible within reasonable limits, the terms of the franchise agreement shall prevail.
(E) Mutual Consideration. The award of a franchise authorizing the use of public property or public rights for private purposes shall be deemed consideration by the grantee in the form of agreement to provide the cable system and services offered in accordance with the provisions of this chapter and of the franchise.
(F) Compliance with Law. Neither this chapter nor a franchise granted under it relieves the grantee of any requirement of the grantor or of any ordinance, rule, regulation or specification of the grantor in effect as of or after the effective date of the ordinance codified in this chapter, including, but not limited to, the payment of all normal permit and inspection fees.
(G) Franchise Nonexclusive. The grantor may, at its option, grant one or more franchises to construct, operate, maintain and reconstruct a cable system. The franchise shall constitute both a privilege and an obligation to provide the cable system and services required by the franchise. The franchise shall include the provisions of the “franchise agreement” together with any subsequent agreements which are mutually accepted by the grantor and the grantee in writing.
(H) Limitation. No privilege shall be granted or conferred by a franchise except those specifically prescribed in this chapter and in a franchise agreement.
(I) Duration. The term of any franchise, and all rights, privileges, obligations and restrictions pertaining thereto, shall be specified in the franchise agreement. The effective date of any franchise shall be as specified in the franchise agreement.
(J) Status. Any franchise granted shall be nonexclusive. Subject to the terms of the franchise agreement, the grantor specifically reserves the right to grant, at any time, such additional franchises as it deems appropriate.
(K) Use of Public Streets and Ways. For the purpose of operating and maintaining a cable system in the franchise area, a grantee may place and maintain within the public rights-of-way such property and equipment as are necessary and appurtenant to the operation of the cable system. Prior to construction or alteration, the grantee shall in each case file plans with the appropriate agencies and utility companies, and receive written approval of the grantor before proceeding.
(L) Use of Other Utilities. Any person who provides a cable system or services as defined in this chapter shall be deemed a grantee and shall not do so except in accordance with a franchise granted under this chapter. If such grantee uses distribution channels furnished by a telephone company or other public utility, the grantee shall be required to comply with all of the provisions of this chapter as a “licensee,” and the term “grantee” in this chapter shall include “licensee” in its meaning.
(M) Nontransferable. The franchise shall not be sublet or assigned, nor shall any of the rights or privileges therein granted or authorized be leased, assigned, sold or transferred, either in whole or in part, nor shall title thereto, either legal or equitable, or any right, interest or property therein, pass to or vest in any person, except the grantee, either by act of the grantee or by operation of law, without the prior written consent of the grantor, which consent shall not be unreasonably withheld. The granting of such consent shall not render unnecessary any subsequent consent. The grantor shall promptly request and the grantee shall furnish such information as the grantor reasonably requests in connection with such transfer. Failure of the grantor to act within 60 days of receipt of such requested information shall be deemed the consent of the grantor thereto.
(N) Change in Control.
(1) The grantee shall promptly notify the grantor of any proposed change in control of the grantee. Such change in control shall make the franchise null and void unless and until the grantor shall have consented thereto subject to the provisions of subsections (N)(2) and (3) of this section, which consent shall not be unreasonably withheld. The grantor shall promptly request and the grantee shall furnish such information as the grantor reasonably requests in connection with such change of control. Failure of the grantor to act within 60 days of receipt of such information shall be deemed the consent of the grantor thereto.
(2) For the purpose of this subsection (N)(2), a presumptive change in control exists, prior to the completion of construction, as defined in the franchise agreement, upon the sale or transfer of 18 percent or more in any given year of the grantee’s stock. Subsequent to the completion of construction, a presumptive change in control will exist upon the sale or transfer of 30 percent or more of the grantee’s stock in any given year. In addition, the consent of the grantor under the standards set forth in subsection (N)(1) of this section will be necessary for the first sale or transfer of the grantee’s stock, which sale or transfer, when added to all previous sales or transfers, will result in more than 50 percent of the grantee’s stock having been sold or transferred since the effective date of the franchise. However, notwithstanding anything to the contrary provided in this subsection (N), stock sales or transfers to (a) existing shareholders or persons holding options to purchase shares from the grantee as identified in the grantee’s franchise proposal, (b) members of families of persons in the foregoing category (a), and (c) trust(s) for the benefit of persons in the foregoing categories (a) or (b) shall not require consent under the provisions of subsection (N)(1) of this section or be counted in determining percentages under the provisions of this subsection (N)(2). If the grantee employs an independent management company or operator, which initial employment requires the grantor’s consent, a presumptive change in control shall also exist if the grantee causes a change in such management company or operator; provided, however, that if such management company or operator is terminated for cause, consent by the grantor shall only be required for the selection of a new independent management company or operator. For purposes of this section, an “independent management company or operator” means a person that is not a parent, subsidiary or affiliate of the grantee, so long as the majority of stock of any such affiliate is owned by the grantee or its parent.
(3) The remedies for a violation of this section are subject to the procedures of SCCC 5.24.160(A).
(O) Sales Notice. The grantee, at least 30 days prior to any transfer or change in control as described in this section, shall file with the grantor a copy of the deed, agreement, mortgage, lease or other written instrument evidencing such transfer or change in control certified and sworn to as correct by the grantee.
(P) Sales Approval. Every such franchise transfer or change in control as described in this section, whether voluntary or involuntary, shall be deemed void and of no effect until the grantee has filed such certified copy of the document described in subsection (O) of this section with the grantor and the grantor has given approval. [Ord. 3914 § 2, 1988].
5.24.040 Rights reserved to the grantor.
(A) Reservation. Nothing in this chapter shall impact or affect, in any way, the grantor’s right of eminent domain. There is reserved to the grantor every right and power which is required to be served or provided in this chapter by any law.
(B) Nonwaiver or Bar. Neither the granting of any franchise, nor any provision of this chapter, shall constitute a waiver or bar to the exercise of any governmental right or power by the grantor pursuant to its police powers; provided, that any such exercise by the grantor shall not impair the rights granted a grantee under a franchise.
(C) Delegation of Powers. Any right or power in, or duty retained by or imposed upon the grantor, or any commission, officer, employee, department or board of the grantor, may be assigned or transferred by the grantor to any officer, employee, department or board of the grantor, subject to the provisions of SCCC 5.24.160(B).
(D) Right of Inspection of Construction. The grantor shall have the right to inspect all construction or installation or other physical work performed by the grantee in connection with the franchise, and to make such tests as it shall find necessary to ensure compliance with the terms of the franchise and other pertinent provisions of law, so long as the inspection does not unreasonably interfere with the grantee’s operations.
(E) Right to Require Removal of Property. At the expiration of the term for which the franchise is granted, or upon its revocation, expiration or termination, the grantor shall have the right to require the grantee to remove, at the grantee’s expense, all portions of its aerial cable system and any other property from all streets and public ways within the franchise area.
(F) Right of Intervention. The grantor shall have the right of intervention in any suit, proceeding or other judicial or administrative proceeding, to which the grantee is party, and the grantee shall not oppose such intervention by the grantor, so long as such intervention does not impair the grantee’s right to operate the cable system.
(G) Place of Inspection. The grantor shall have the right to inspect and receive copies of all records, maps, plans and decisions and policies and other like material of the grantee that are reasonably necessary for the exercise of the grantor’s regulatory authority upon reasonable notice at its local premises at any time during normal business hours, and any grantee records kept at another place shall, within 10 days of the grantor’s request, be made available at the grantee’s premises within the franchise area for the grantor’s inspection and/or copying, so long as the inspection does not unreasonably interfere with the grantee’s operations. [Ord. 3914 § 2, 1988].
5.24.050 Rights of subscribers.
The rights of subscribers under this section shall be subject to and governed by the provisions of Section 631 of the Cable Act.
(A) Discriminatory Practices Prohibited. The grantee shall not deny service, access, or otherwise discriminate against subscribers, programmers or others on the basis of race, color, religion, national origin, sex, age or sexual preference. The grantee shall strictly adhere to the equal employment opportunity requirements of Federal, State or local governments and shall comply with all applicable laws and executive and administrative orders relating to nondiscrimination.
(B) Privacy. The grantee shall use its best efforts to protect against possible abuses of privacy or constitutional rights of any subscriber, programmer or resident resulting from any device, signal or service associated with the cable system.
(C) Television Sets. The grantee shall not directly or indirectly do any of the following acts in the jurisdiction of the grantor:
(1) Engage in the business of selling at retail, leasing, renting, repairing or servicing of television sets, radios or other receiving apparatus, or any part or component thereof, except converters owned by the grantee;
(2) Provide service or repair to its subscribers, for a fee or otherwise, which extends beyond the connection of its service or the determination by the grantee of the quality of its signal to the recipients thereof;
(3) Solicit, refer or cause or permit the solicitation or referral of any subscriber to persons engaged in any business prohibited in this chapter to be engaged in by the grantee; provided, however, that the above provisions of this section shall not apply to modifications made to permit two-way communications.
(D) Tapping and Monitoring. The grantee shall not tap or monitor or permit any other person to tap or monitor any cable, line, signal input device or subscriber outlet or receiver for any purpose whatsoever without the consent of the subscriber or a court order therefor; provided, however, that the grantee shall be entitled to conduct system-wide or individually addressed “sweeps” for the purpose of verifying system integrity, controlling return path transmission, or billing for services.
(E) Data Collection.
(1) Except for its own internal use and as permitted by the Cable Act, the grantee shall not permit the cable system to be used for data collection purposes, nor shall it otherwise collect data which would reveal the commercial product or other preferences or opinions of individual subscribers, members of their families, or their guests, licensees or employees, except for the grantee’s own internal uses, unless the grantee has received the prior consent of the subscriber.
(2) In any event, the grantee shall not reveal or permit the release or sale of data on individual subscribers without the consent of such subscribers, but may reveal or permit the release or sale of aggregate data only.
(F) Revealing Subscriber Preferences.
(1) The grantee shall not reveal individual subscriber preferences, viewing habits, beliefs, philosophy, creeds or religious beliefs to any person, firm, agency, governmental unit or investigating agency without court authority or prior written consent of the subscriber.
(2) Such written consent, if given, shall be limited to a period of time not to exceed one year.
(3) The grantee shall not condition the delivery or receipt of services to any subscriber on any such consent.
(4) Such a subscriber may revoke without penalty or cost any consent previously made by delivering to the grantee in writing a substantial indication of their intent to so revoke.
(G) Revealing Subscriber Lists. Subject to the Cable Act, the grantee shall not reveal, or sell, or permit the release or sale of its subscriber list without the prior written consent of the subscribers; provided, that the grantee may use its subscriber list as necessary for the construction, marketing and maintenance of the grantee’s services and facilities authorized by a franchise, and the concomitant billing of subscribers for the services; and further provided, that the grantor may use the grantee’s subscribers list for the purpose of communication with subscribers in connection with matters relating to the operation, management and maintenance of the cable system, and for no other purpose.
(H) Other Persons Affected. The prohibitions contained hereinabove in this section shall extend and apply to all of the following as well as to the grantee:
(1) Officers, directors, employees and agents of the grantee;
(2) General and limited partners of the grantee;
(3) Any person or combination of persons owning, holding or controlling five percent or more of any corporate stock or other ownership interest of the grantee;
(4) Any affiliated or subsidiary entity owned or controlled by the grantee, or in which any officer, director, stockholder, general or limited partner or person or group of persons owning, holding or controlling any ownership interest in the grantee, owns, holds or controls five percent or more of any corporate stock or other ownership interest; and
(5) Any person, firm or corporation acting or serving in the capacity of a holding or controlling company of the grantee.
(I) Subscriber Privacy Rights. The grantee shall provide, at times specified in the Cable Act, to all subscribers or inquiring potential subscribers, the subscriber privacy notice required by Section 631 of the Cable Act.
(J) Complaint Advice. The grantor may require that the grantee advise each subscriber that the grantor’s representative is the official to whom complaints of poor service should be made if such complaints of poor service are not resolved by the grantee to the satisfaction of each subscriber. [Ord. 5290 § 17, 2019; Ord. 3914 § 2, 1988].
5.24.060 Finance and insurance.
(A) Payments to the Grantor.
(1) As compensation for any franchise to be granted, and in consideration of permission to use the streets and public ways of the grantor for the construction, operation, maintenance and reconstruction of a cable system, the grantee shall pay to the grantor such percentage of its gross revenues as is specified in the franchise agreement.
(2) Payments due the grantor under this provision shall be computed quarterly, and shall be paid within 30 days following the end of each such quarter. The payment shall be accompanied by a report showing the basis for the computation and such other relevant facts as may be required by the grantor.
(3) No acceptance of payment shall be construed as an accord that the amount paid is the correct amount, nor shall acceptance of payment be construed as a release of any claim the grantor may have for further or additional sums payable. All amounts paid shall be subject to audit and recomputation by the grantor.
(4) In the event that any franchise payment or recomputed amount is not made on or before the dates specified in this chapter, the grantee shall pay as additional compensation all of the following:
(a) An interest charge, computed from such due date, at the annual rate equal to the prevailing commercial prime interest rate in effect upon the due date;
(b) A sum of money equal to five percent of the amount due in order to defray those additional expenses and costs incurred by the grantor by reason of delinquent payments.
(B) Security Fund. Except as otherwise provided in the franchise agreement:
(1) Within 30 days after the effective date of the franchise, the grantee shall deposit to a bank account established by the grantor, and maintain on deposit through the term of the franchise, a sum specified in the franchise agreement as security for the faithful performance by it of all of the provisions of the franchise, and compliance with this chapter, and compliance with all orders, permits and directions of any agency of the grantor having jurisdiction over its acts or defaults, and the payment by the grantee of any claims, fees, liens or taxes due the grantor which arise by reason of the construction, operation or maintenance of the cable system.
(2) Within 30 days after notice to it that any amount has been withdrawn by the grantor from the security fund, the grantee shall deposit a sum of money sufficient to restore such security fund to the original amount.
(3) If the grantee fails, after 10 days’ notice, to pay to the grantor any fees due and unpaid, or fails to repay within such 10 days, any damages, costs or expenses which the grantor is compelled to pay by reason of any act or default of the grantee in connection with its franchise, or fails, after 30 days’ notice of such failure, to comply with any provision of the franchise which the grantor reasonably determines can be remedied by an expenditure of the security, the grantor may immediately withdraw the amount thereof, with interest and any liquidated damages, from the security fund. Upon such withdrawal, the grantor shall notify the grantee of the amount and the date thereof.
(4) The grantee shall be entitled to the return of the security fund, or such portion thereof, with interest, as remains on deposit at the expiration of the franchise, or its termination, once all amounts due to the grantor have been paid.
(5) The rights reserved to the grantor with respect to the security fund are in addition to all other rights of the grantor and no action, proceeding or exercise of a right with respect to such security fund shall affect any other right the grantor may have.
(C) Faithful Performance Bond. Except as otherwise provided in the franchise agreement, upon the effective date of the franchise, the grantee shall furnish proof of the posting of a faithful performance bond running to the grantor, with surety approved by the grantor in the sum specified in the franchise agreement, conditioned that the grantee shall well and truly observe, fulfill and perform each term and condition of the franchise; provided, however, that such bond shall not be required upon certification by the grantor of completion of construction of the grantee’s cable system. During the course of construction, the amount of the bond may from time to time be reduced as provided in the franchise agreement. Written evidence of payment of premiums shall be filed and maintained with the grantor.
(D) Letter of Credit.
(1) Except as otherwise provided in the franchise agreement, at the option of the grantor, it may allow, in lieu of the security fund and/or faithful performance bond, an irrevocable letter of credit, issued by a bank approved by the grantor, in the amount specified in the franchise agreement. The letter of credit shall incorporate wording approved by the grantor enabling it to draw such sums from time to time as the grantor may find necessary to satisfy any defaults of the grantee or to meet any payments due the grantor under or in connection with the franchise. The letter of credit shall further provide for 60 days’ written notice by certified mail by its issuer to the grantor of any pending expiration or cancellation, and the notice shall without further cause constitute reason for the grantor to draw the full sum to be held in its own accounts until the letter shall be reestablished in good and satisfactory form to the grantor.
(2) If the grantor requires such a letter of credit, the grantee shall pay all fees or other charges required to keep it in force and shall, within 30 days of any draw by the grantor, restore its face value to the original amount.
(3) All provisions in this chapter applying to bonds or security funds shall also apply to letters of credit. [Ord. 5290 § 17, 2019; Ord. 3914 § 2, 1988].
5.24.070 Regulation of franchise.
(A) Intent. The grantor, at its sole option, may provide for the day-to-day administration and enforcement of the provisions of this franchise by a designee. This delegation may be to a joint powers agency, a commission, or by other means, at the grantor’s sole option.
(B) Review and Update. The grantor and grantee shall hold a cable system review session upon the fifth and tenth anniversaries of the effective date of the franchise. All such review sessions shall be open to the public, and notice shall be given.
(1) At the fifth year review session the topics for discussion and review shall include compliance with the terms and conditions of the franchise agreement and ordinance, any developments in the law since issuance of the franchise, and any other topics to which the parties shall mutually agree.
(a) The grantor shall conduct a community needs assessment of a representative sampling of such subscribers six months prior to commencing such review. The grantee shall provide the grantor, to the extent permitted by law, a mailing list of subscribers and shall consult with the grantor on topics to be covered by this assessment. Results of the assessment will be shared with the grantee at least two weeks prior to commencement of this review session.
(b) Not later than 90 days after the conclusion of the assessment described above, the grantor shall issue its findings evaluating the performance of the grantee, and identifying specific actions to be taken. Such actions shall include both those required by the existing terms and conditions of the franchise and those which the grantor would like to add at that time. The grantee shall comply with all directives which do not constitute a material change in the franchise.
(c) The grantor may request the grantee to undertake actions not required by the franchise agreement and ordinance, and the grantee shall make a good faith effort to comply or provide evidence as to why such compliance would be unreasonable. The grantee shall be entitled to an automatic three-year extension of the franchise for implementing any material changes not required by the franchise agreement or ordinance.
(2) At the tenth year review session the topics for discussion and review shall be expanded to include services provided, system application of new technologies, cable system performance and customer service.
(a) The grantor shall conduct a needs assessment following the same procedures outlined for the fifth year review.
(b) No later than 90 days after the conclusion of the tenth year review session, the grantor shall issue findings of any deficiencies. A deficiency shall be deemed to exist when the grantee is not performing consistently with the terms of the franchise agreement or when the community needs assessment has identified one or more needs which are not being met by the grantee and could reasonably be expected to be met by the grantee.
(c) After reviewing the evidence and good faith negotiations between the parties, the grantor may require the grantee to add to, delete from, or modify the existing cable system and/or cable system design; provided it has been determined that:
(i) Such change or changes have been identified as a significant need in the community assessment; and
(ii) The need cannot be met at least as well by an alternative business or commercial entity at a reasonable price; and
(iii) The present cable system cannot meet the specified need, either as presently operating or by some alternative modification consistent with the franchise that imposes a significantly lesser economic burden on the grantee;
(iv) The grantor finds that such change will meet the community need as defined in the assessment procedures set forth above; and
(v) The change will not impose an unreasonable financial hardship on the grantee.
(d) In the event that such change requires a major redesign or major reengineering or major reconstruction of the cable system throughout the franchise area, the grantee shall be permitted two years to implement such change, unless the parties agree otherwise.
(e) The grantee shall be entitled to an automatic extension of the franchise of 10 years for such major redesign, reengineering or reconstruction that it makes pursuant to this section that were not previously required by the franchise agreement or ordinance.
(3) Notwithstanding any of the provisions of this section, the grantee shall not be required to provide more services than those services which are generally available throughout the cable television industry in communities that are of a similar size and have similar demographics, terrain and subscriber penetration levels as the city and County of Santa Cruz (the “similar communities”). Furthermore, the grantee shall not be required to make changes unless such requested modifications or additions to the cable system are generally available on an on-going, nonexperimental basis in such similar communities for a period of not less than three consecutive years.
(4) The provisions of this section shall not be used by the grantee to reduce its existing obligations under its franchise agreement.
(5) In the event (a) the grantor and the grantee disagree on whether a directive given by the grantor pursuant to subsection (B)(1)(b) of this section constitutes a major redesign, or major reengineering, or major reconstruction of the cable system or (b) the grantee disputes the determination that the conditions of subsection (B)(2)(c) of this section have been met, either party may seek arbitration by giving notice to the other party and arbitration shall commence and proceed under the current rules of the American Arbitration Association and as follows:
(a) Within 30 days of receipt of notice, the parties shall mutually agree on an arbitrator. If the parties are unable to agree on a single arbitrator within such time, each party shall choose an arbitrator, who must be experienced in the cable television industry, within 30 days. The two arbitrators so chosen shall pick a third arbitrator within 20 days.
(b) Within 30 days after appointment of all arbitrators and upon 10 days’ written notice to all parties, the arbitrators shall commence a hearing.
(c) The hearing shall be recorded and transcribed at the request of either party. All hearing proceedings, debate and deliberations shall be open to the public and at such times and places as contained in the notice.
(d) Within 30 days after the close of the hearing, the arbitrators shall prepare findings and decisions agreed upon by a majority of the arbitrators which shall be filed with the grantor and served by certified mail upon the grantee. If the arbitrators have not reached agreement within such 30-day period, the arbitration proceeding shall become null and void and shall be started anew, unless the parties mutually agree to extend the time period.
(e) Either party may seek judicial relief from the decision of the arbitrators.
(f) Cost of arbitration shall be borne equally by both parties. [Ord. 5290 § 17, 2019; Ord. 3914 § 2, 1988].
5.24.080 Cable usage corporation.
(A) Public Usage of the System. To the extent specified in the franchise agreement, the grantor may utilize a portion of the cable system capacity, and associated facilities and resources, to develop and provide services that will be in the public interest. In furtherance of this purpose, the grantor may establish a cable usage corporation or a nonprofit or cooperative corporation, and adopt bylaws, to receive and allocate facilities, support funds and other considerations provided by the grantee and/or others. To such a public corporation, if established, may be delegated the following responsibilities:
(1) Receive, and utilize or reallocate for utilization, channel capacity, facilities, funding and other support provided specifically for public usage of the cable system;
(2) Review the status and progress of each service developed for public benefit;
(3) Report to the grantor annually on the utilization of resources, the new public services developed and the benefits achieved for the grantor and its residents;
(4) Reallocate resources on a periodic basis to conform with changing priorities and public needs.
(B) Grantee Support for Local Cable System Usage. The grantee shall provide to the grantor or the cable usage corporation, at the grantor’s election, equipment, facilities and channel capacity as provided in the franchise agreement. [Ord. 3914 § 2, 1988].
5.24.090 Services.
(A) Information to the Public. It is the grantor’s policy that the public shall have access to accurate and current information on presently and potentially available services. The grantee shall make an effective effort to provide such information utilizing both its cable system and other media. The grantee shall, no less than every two years, poll all subscribers to determine subscriber viewing preferences for services and/or programs not currently offered by the grantee. The grantee shall make a copy of such poll available to the grantor.
(B) Services to Be Provided. A cable system shall provide, at a minimum, the services and broad programming categories listed in the franchise agreement.
(C) Changes in Services. The grantee shall inform the grantor at least 30 days in advance of making any change in a service.
(D) Nondiscrimination. The grantee shall not discriminate between subscribers within one type or class in the availability of services at either standard or differential rates according to published rate schedules. No charges may be made for services except as listed in published schedules which are available for inspection by anyone at the grantee’s office, quoted by the grantee on the telephone, and displayed or communicated to all potential subscribers prior to their subscribing for services.
(E) Service Orders. Prior to any installation or delivery of services all subscribers shall affirmatively subscribe for and order such installation and delivery.
(F) Prepayment Schedules. The grantee may, at its option, charge subscribers for services no more than one month in advance. All other charges shall be made and paid at the commencement of the service month. Billing periods shall not exceed two months. Bills may be due and payable upon mailing and shall not become delinquent sooner than 20 days after mailing. The grantee may offer subscribers various prepayment schemes at discounts not to exceed reasonable interest on the subscriber’s money for the period of prepayment.
(G) Disconnect for Cause. The grantee may disconnect a subscriber only for cause, which shall be limited to:
(1) Payment delinquency in excess of 20 days;
(2) Wilful or negligent damage to or misappropriation of grantee property;
(3) Refusal, for more than 10 days, to admit the grantee to the subscriber’s premises to service the grantee’s equipment;
(4) Monitoring, tapping or tampering with the grantee’s cable system, signals or service, which shall be conclusively presumed if the subscriber is convicted of the same.
(H) Reconnection. The grantee shall, upon a subscriber’s written request, reconnect service which has been disconnected for payment delinquency when payment has removed the delinquency and a security deposit is made in the amount of no more than one month’s service fee. A published standard charge may be made for reconnection. The grantee shall not be required to make more than three reconnections for the same subscriber if the disconnections involved were caused by payment delinquency within the past 12 months.
(I) Installations.
(1) Subject only to any limitations in its franchise agreement, the grantee shall promptly provide and maintain service to all structures, residential, commercial, or industrial, in the franchise area upon request of the lawful occupant or owner.
(2) Each subscriber shall have the right to require their installation be done over any route on their property, and in any manner they may elect which is technically feasible. The grantee may, if they so elect, require that any such request be made in writing. If the subscriber requests installation other than a standard installation, then the subscriber shall be required to pay a reasonable fee for the time and materials occasioned by the installation.
(3) For purposes of this subsection, a standard installation shall include installation of a drop with fittings up to 200 feet from the grantee’s distribution system measured along the cable from the centerline of the street or utility easement through the house wall or at the subscriber’s option through the floor from a house vent or crawl space directly to the subscriber’s television set with five feet of cable from the wall or floor entry to the television set. Also included as part of a standard installation is the grounding cable, fine tuning of the television set and the provision of the appropriate literature.
(J) Converters/Terminals. At such time as a converter or terminal becomes necessary for subscribers to have access to all services on the cable system, the grantee shall make them available to subscribers. The grantee may require each subscriber who elects to take a converter to furnish a security deposit therefor. Subscribers shall be entitled to interest upon their deposits to be paid upon return of the converter.
(1) Each converter shall be and remain the property of the grantee. The grantee shall be responsible for its maintenance and repair and may replace it as the grantee may from time to time elect, except that the subscriber shall be responsible for loss of or damage to any such converter until returned to the grantee.
(2) Upon termination or cancellation of a subscriber’s service, the subscriber shall promptly return the grantee’s converter to the grantee in the same condition as received, reasonable wear and tear excepted.
(3) The grantee may apply the security deposit against any sum due from the subscriber for loss of or damage to such converter exceeding reasonable wear and tear.
(4) If the grantee has no claim against the deposit, the grantee shall return it, or the balance, to the subscriber.
(K) Nonstandard Installations. For each nonstandard drop installed, the grantee may charge the subscriber for the cost of material and labor in excess of that for a standard drop. The grantee shall provide each subscriber a quotation of all charges prior to installation and obtain subscriber’s authorization in advance for all nonstandard drop charges.
(L) Refunds. When a subscriber voluntarily discontinues service, the grantee shall refund the unused portion of any advance payments after deducting any charges currently due. Unused payment portions shall be the percentage of time for which the subscriber has paid for service and will not receive it because of their discontinuation of service. [Ord. 5290 §§ 17, 18, 2019; Ord. 3914 § 2, 1988].
5.24.100 Design and construction.
(A) System Construction. The cable system shall be constructed in accordance with the provisions of the franchise agreement.
(B) Construction Components and Techniques. Construction components and techniques shall be in accordance with the franchise agreement.
(C) Technical and Performance Standards. System technical and performance standards shall be in accordance with the franchise agreement.
(D) Construction Codes. The grantee shall strictly adhere to all building and zoning codes in force as of or after the effective date of the ordinance codified in this chapter. The grantee shall arrange its lines, cables and other appurtenances, on both public and private property, in such a manner as to cause no unreasonable interference with the use of the property by any person. In the event of such interference, the grantor may require the removal of the grantee’s lines, cables and appurtenances from the property in question. The grantee shall give at least 48-hour advance notice to all property owners prior to installing any aboveground structures upon easements located on private property.
(E) System Construction Schedule.
(1) The grantee shall begin to offer the services no later than the schedule contained in the franchise agreement.
(2) The grantee shall provide a detailed construction plan indicating progress schedule, area construction maps, test plan, and projected dates for offering service as indicated in the franchise agreement.
(F) Geographical Coverage. The grantee shall design and construct the cable system to have the capability to service every dwelling unit, agency and business and commercial establishment within the area specified in the franchise agreement and any annexations thereto with any exceptions requiring specific grantor approval. Service shall be provided to subscribers in accordance with the schedules and line extension policies specified in the franchise agreement. The route of cables servicing the institutional network, if applicable, shall be as approved by the grantor and specified in the franchise agreement.
(G) Provision of Service. After service has been established for any area, the grantee shall provide service to any requesting subscriber within that area within the time set forth in the franchise agreement.
(H) Construction Default. Upon the failure, refusal or neglect of the grantee to cause any construction or other necessary work to be properly completed in, on, over or under any right-of-way within the time prescribed in the franchise agreement or the construction permit, the grantor may perform said construction or other necessary work and the grantee shall promptly reimburse the grantor its costs thereof as provided in subsection (P) of this section.
(I) Vacation or Abandonment. In the event any street, alley, public highway or portion thereof used by the grantee is vacated by the grantor, or the use thereof discontinued by the grantee, the grantee shall forthwith remove its aerial facilities therefrom unless specifically permitted to continue the same, and on the removal thereof restore, repair or reconstruct the area where such removal has occurred, to such condition as may be required by the grantor not in excess of the original condition. In the event of failure, neglect or refusal of the grantee, after 30 days’ notice by the grantor, to do such work, the grantor may cause it to be done, and the cost thereof shall be paid by the grantee within 30 days and collection may be made by the grantor.
(J) Abandonment in Place. The grantor may, upon written application by the grantee, approve the abandonment of any property in place by the grantee, under such terms and conditions as the grantor may approve. Upon grantor-approved abandonment of any property in place, the grantee shall cause to be executed, acknowledged and delivered to the grantor such instruments as the grantor prescribes and approves, transferring and conveying the ownership of such property to the grantor.
(K) Removal of Facilities. In the event that the use of any part of the plant of the grantee is discontinued for any reason for a continuous period of 30 days, without prior written notice to and approval by the grantor, or any part of such plant has been installed in any street or public way without complying with the requirements of this chapter, or any franchise is terminated, cancelled or expires, then the grantee shall, at the grantor’s option, and at the expense of the grantee and at no expense to the grantor, and upon demand of the grantor, promptly remove from any streets or other public ways all property of the grantee, and the grantee shall promptly restore the street or other area from which such property has been removed to its condition prior to the grantee’s use thereof; provided, that the grantee shall not be required to remove conduit from underground, where the grantor may determine no damage to the surface of any structures may result from such nonremoval.
(L) Movement of Facilities. The grantee shall, on the request of any person holding a building moving permit issued by the grantor, temporarily raise or lower its wires to permit the moving of buildings. The expense of such temporary removal or raising or lowering in wires shall be paid by the person requesting the same, and the grantee shall have the authority to require such payment in advance. The grantee shall be given not less than 48 hours’ advance notice to arrange for such temporary wire changes.
(M) Undergrounding of Cable. Cables shall be installed underground at the grantee’s cost where all existing utilities are already underground. Previously installed aerial cable shall be installed underground at the grantee’s cost in concert with other utilities when all such other utilities may convert from aerial to underground construction.
(N) Facility Agreements. No franchise shall relieve the grantee of any obligations involved in obtaining pole or conduit space from any department of the grantor, utility company, or from others maintaining utilities in streets.
(O) Extension of Franchise Area. If the grantor elects to grant one or more franchises under this chapter, and if thereafter one or more of the franchises expires or is otherwise ended, the grantor may, if it so elects, require a remaining grantee, or more than one, to extend its cable system to provide services to the area served by the ended franchise. The terms and requirements of such extension shall not exceed those herein or of the existing franchise of the extending grantee.
(P) Repair of Streets and Public Ways. Any and all streets and public ways disturbed or damaged during the construction, operation, maintenance or reconstruction of the cable system shall be promptly restored by the grantee, at its expense, to their original condition unless otherwise authorized in writing by the grantor. If the grantee fails to perform such work following reasonable notice from the grantor, the grantor may perform or cause to be performed such repair or maintenance work and shall submit to the grantee an itemized statement of costs thereof. The grantee shall reimburse the grantor for such itemized costs within 30 days.
(Q) Erection of Poles. The grantee shall not erect any pole on or along any street or public way in an existing aerial utility system without the grantor’s consent, which shall not be unreasonably withheld. If additional poles in an existing aerial route are required, the grantee shall notify the grantor of any such construction. The grantee shall negotiate the lease of pole space and facilities from the existing pole owners for all aerial construction, under mutually acceptable terms and conditions.
(R) Trimming of Trees. The grantee shall have the authority to trim trees upon and overhanging streets, alleys, sidewalks and public ways and places of the grantor so as to prevent the branches of such trees from coming in contact with the wires and cables of the grantee or interfering with National Safety Code and other clearance requirements, except that at the option of grantor, such trimming may be done by it or under its supervision and direction at the expense of the grantee, provided such expenses are reasonable and documented by the grantor.
(S) Reservations of Street Rights. Nothing in a franchise shall prevent the grantor from constructing, repairing and/or altering any public work. All such work shall be done, insofar as practicable, in such manner as not to unnecessarily obstruct, injure or prevent the free use and operation of any property of the grantee. However, if any such property of the grantee interferes with the construction, maintenance or repair of any public improvement, all such property shall be removed or replaced in such manner as directed by the grantor so that it does not interfere with the public work, and such removal or replacement shall be at the expense of the grantee. [Ord. 3914 § 2, 1988].
5.24.110 Operations and maintenance.
(A) Maintenance and Complaints.
(1) The grantee shall maintain an office in the franchise area open during all usual business hours, but in no case less than 9:00 a.m. to 7:00 p.m., (or 8:00 a.m. to 6:00 p.m.), Monday through Friday excluding legal holidays, having a publicly listed toll-free telephone, and so operated as to receive subscriber complaints and requests on a 24-hour basis. After two years from commencement of operations, the grantee shall be entitled to reduce by one hour the hours that its business office remains open if the average number of subscribers using the office during such hour is 50 percent or less than the average number of subscribers using the office during any of the other regular office hours. A written log shall be maintained listing all complaints and their disposition and submitted to the grantor upon request. An employee or agent of the grantee shall be available to receive subscriber complaints 24 hours a day, seven days a week. An employee or agent of the grantee shall be on call 24 hours per day to be available to handle emergency, major technical problems.
(2) The grantee shall render efficient service, make repairs promptly, and interrupt service only for good cause and for the shortest time possible. Such interruptions, insofar as possible, shall be preceded by notice as set forth in the franchise agreement, and shall occur during a period of minimum use of the cable system. A written log shall be maintained of all service interruptions.
(3) The grantee shall maintain a force of technicians capable of responding to subscriber complaints or requests for service within 24 hours after receipt of a complaint or request for repair. No charge shall be made to the subscriber for such a service or repair except as provided in the franchise agreement.
(4) Telephone Service. The grantee shall provide a state-of-the-art telephone system to receive all construction and service complaints. A sufficient number of customer representatives will be provided so that callers are not required to wait in the usual instance beyond three minutes for phone answering. The telephone number of the local office shall be listed in the telephone directories serving Santa Cruz County. The telephone service shall be operable to accept complaints 24 hours a day, seven days a week.
(B) Procedures for Handling of Complaints. The grantee’s complaint-handling procedures shall be designed to accomplish the following:
(1) Receipt and acknowledgment of any complaint made in person or by telephone within 24 hours, regardless of the time the complaint is made;
(2) Acknowledgment of any complaint received by mail within three business days of the date such complaint is received;
(3) Maintain a log of all complaints, including the complainant’s name, address and telephone number, the time of its acknowledgment, and information given as to how the complaint would be resolved, and the action taken;
(4) Complaints not resolved within 24 hours of receipt shall be listed in a log of “Delayed Action on Complaints” which shall give the information in subsection (B)(3) of this section and add the reasons for nonresolution within the 24-hour period;
(5) Provide the complainant access to the grantee’s senior management personnel on a reasonable basis mutually convenient to the complainant and the grantee’s senior management personnel in the event resolution is not expeditiously obtained by the grantee’s personnel normally assigned to handling complaints;
(6) Provide complete information to the complainant regarding their ability to take the complaint to the grantor’s representative if it is not resolved by the grantee.
(C) Review of Alleged Inadequate Performance.
(1) If at any time, after a public hearing with at least 10 days’ notice to the grantee, the grantor determines that reasonable evidence exists of inadequate cable system performance as specified in the franchise agreement, it may require the grantee to perform tests and analyses directed toward such suspected inadequacies. The grantee shall fully cooperate with the grantor in performing such testing and shall prepare results and a report, if requested, within 30 days after notice. Such report shall include the following information:
(a) The nature of the complaint or problem which precipitated the special test;
(b) What system component was tested;
(c) The equipment used and procedures employed in testing;
(d) The method, if any, in which such complaint or problem was resolved;
(e) Any other information pertinent to the tests and analyses which may be required.
(2) The grantor may hire a consultant to supervise or perform the foregoing tests, review their results, and advise the grantor of their findings. The grantee shall reimburse the grantor for the reasonable costs of hiring the consultant, including the costs of verifying compliance with any recommended corrective measures, if the review reveals materially inadequate performance of the cable system as specified in the franchise agreement.
(D) Remedies for Inadequate Performance. The following remedies for inadequate performance are established, which may be invoked only after the grantee has been given notice, a hearing that is open to the public and is conducted in accordance with SCCC 5.24.160(A), and an opportunity to present evidence regarding the alleged violations.
(1) In the event that one-third or more of the services under the grantee’s control is interrupted for 24 consecutive hours, or for 48 or more nonconsecutive hours in one month to more than 100 subscribers, except in circumstances for which prior approval of the interruption is obtained from the grantor or where subsection (D)(3) of this section applies, the grantee shall provide a 10 percent rebate or credit of the current monthly fee for each tier of service affected to each subscriber so affected by each such outage, provided the following:
(a) The subscriber makes a written request for refund to the grantee within 10 days of the interruption; and
(b) The grantee is not able to show that the request for refund is part of a pattern of abuse of this remedy; and
(c) Any amounts refunded or credited shall not be included in the calculation of gross revenues for the purpose of franchise fee payments; and
(d) In no event shall the refunded amount be greater than the charge the subscriber would otherwise have paid for service during the duration of such interruption.
(2) In the event that one-third or more of the service(s) under the grantee’s control is interrupted for 48 or more consecutive hours or 72 or more nonconsecutive hours in one month to more than 100 subscribers, except in circumstances for which the prior approval of the interruption is obtained from the grantor or where subsection (D)(3) of this section applies, the grantee shall provide a 20 percent rebate or credit of the current monthly fee for each tier of service affected to each subscriber so affected by each such outage, provided the following:
(a) The subscriber makes a written request for refund to the grantee within 10 days of the interruption; and
(b) The grantee is not able to show that the request for refund is part of a pattern of abuse of this remedy; and
(c) Any amounts refunded or credited shall not be included in the calculation of gross revenues for the purpose of franchise fee payments; and
(d) In no event shall the refunded amount be greater than the charge the subscriber would otherwise have paid for service during the duration of such interruption.
This provision is not cumulative with subsection (D)(1) of this section.
(3)(a) Interruptions in service and other deficiencies within the scope of subsections (D)(1) and (2) of this section shall not be grounds for the remedies set forth in subsections (D)(1) and (2) of this section if caused by construction, scheduled maintenance noticed to the grantor, fire or other casualty, acts of God, civil unrest, strikes and other labor unrest, orders of court or administrative bodies, or the act or omission of a person or persons not under the control of the grantee.
(b) The credit referred to in subsections (D)(1) and (2) of this section shall be only to persons remaining as subscribers after the pertinent outage. All rebates shall be in the form of service credits and the grantee shall be under no obligation to make cash refunds.
(4) In the event that the cable system fails to meet any material performance standards as specified in the franchise agreement for a full three-month period after being put on written notice by the grantor, for any reason under the grantee’s control, the grantor may require the grantee to reduce all affected subscribers’ fees by 25 percent until all performance standards are met.
(5) In addition, in the event that the grantee fails to make the improvements, repairs or adjustments to the cable system necessary to restore the reliability or quality of service within 90 days after the grantor has expressly provided in the notice required in subsection (C)(1) of this section that it is exercising its right to compel the grantee to test, analyze and report on the performance of the cable system, the grantee shall pay to the grantor the sum of $500.00 per day for each day after the end of said 90-day period if the grantee has failed to remedy such deficiency, unless the grantee proves that the delay was caused by unforeseeable factors beyond the reasonable control of the grantee, or if said sum or any part thereof was otherwise waived by the grantor.
(E) Triennial Audit of Performance.
(1) In addition to the provisions of subsection (C) of this section, the grantor may require, at its option, that technical performance audits of the cable system be conducted as often as every three years by an independent technical consultant, selected and employed by the grantor and at the grantor’s expense, to verify compliance of the cable system to all material technical standards of the franchise agreement.
(2) Upon completion of a performance audit, the grantor and grantee shall meet publicly to review the performance of the cable system using the reports required herein regarding subscriber complaints and the records of performance tests. In addition, any subscriber may submit complaints during the review meetings, either orally or in writing, and these shall be considered.
(3) Within 30 days after the conclusion of the cable system performance review meetings, the grantor shall issue findings with respect to the adequacy of the cable system performance and quality of service. If material inadequacies in the technical standards of the cable system are found, the grantor may direct the grantee to correct the inadequacies within a reasonable period of time.
(4) The grantee shall maintain the cable system so that it consistently operates in substantial compliance with the technical standards provided in the franchise agreement. “Substantial compliance” is hereby defined as a requirement that at least 95 percent of the channels received shall meet all applicable technical and performance standards simultaneously at the time of measurement, except as to channels not under the grantee’s control.
(F) System Technical Data. The grantee shall maintain in its office within the franchise area a complete and up-to-date set of as-built system maps and drawings, equipment specification and maintenance publications, and signal level diagrams for each active electronic piece of equipment in the cable system. As-built drawings show all lines and installed equipment, and tap valves and spigots. The scale of maps and drawings shall be sufficient to show the required details in easily readable form and size.
(G) Availability of Technical Data. All technical data shall be available to the grantor’s inspection during normal business hours upon reasonable notice, and, in the event of cable system failure or other operating emergency, at any time, so long as the provision of the data does not unreasonably interfere with the grantee’s operations.
(H) Emergency Repair Capability. It shall be the grantee’s responsibility to assure that its personnel qualified to make repairs are available at all reasonable times and that they are supplied with keys, equipment location instructions, and technical information necessary to begin repairs upon notification of need to maintain or restore continuous service to the cable system. [Ord. 5290 § 17, 2019; Ord. 3914 § 2, 1988].
5.24.120 Violations.
(A) Use of Public Streets. From and after the effective date of the ordinance codified in this chapter, it is unlawful for any person to construct, install or maintain in any public place within the grantor’s territory, or upon any easement owned or controlled by a public utility, or within any other public property of the grantor, or within any privately owned area within the grantor’s jurisdiction which is not yet, but is designated as, a proposed public place on a tentative subdivision map approved by the grantor, any equipment, facilities or system for distributing signals or services through a cable system, unless a franchise or a renewal of any franchise previously issued by the County of Santa Cruz has first been obtained under this chapter, and is in full force and effect.
(B) Unauthorized Connections. It is unlawful for any person to make or use any unauthorized connection or equipment to, or to monitor, tap, receive or send any signal or service via a cable system, or to enable anyone to receive or use any service, television or radio signal, picture, program or sound, or any other signal, without payment to the grantee.
(C) Tampering with Facilities. It is unlawful, without the consent of the grantee, to wilfully attach to, tamper with, modify, remove or injure any physical part of a cable system.
(D) Liability. Any person who violates any provision of this section or who aids in the violation of any provisions of this section shall be liable for, and the court shall award to any grantee who has obtained a franchise under this chapter whose rights are violated, actual general and special damages, costs and attorneys’ fees. In addition thereto, the court may award punitive damages in a proper case.
(E) Civil Action. Any aggrieved grantee who has obtained a franchise under this chapter may enforce the provisions of this section by means of a civil action for damages and/or injunctive relief. These remedies are in addition to any remedies available to the grantor and grantee pursuant to this chapter. [Ord. 5290 § 17, 2019; Ord. 3914 § 2, 1988].
5.24.130 Termination and regulation.
(A) Grounds for Revocation. In addition to any rights set out elsewhere in this chapter, the grantor reserves the right to revoke a franchise, subject to notice to the grantee and the provision of a hearing consistent with SCCC 5.24.160(A), in the event that:
(1) The grantee wilfully or repeatedly violates any material provision of the franchise agreement due to its unreasonable disregard of its obligations under the franchise agreement;
(2) Subject to SCCC 5.24.180(I) and Section 23 of the franchise agreement, the grantee’s construction schedule as set forth in the franchise agreement is materially delayed;
(3) The grantee is adjudged bankrupt;
(4) The grantee is found to have practiced any material fraud upon the grantor.
(B) Implementation of Revocation. Upon the occurrence of any of the events described in subsection (A) of this section, the grantor may by resolution after notice and a full hearing in accordance with SCCC 5.24.160(A), declare a termination, whereupon all rights of the grantee under the franchise shall immediately be divested unless the grantee has cured the violation within 10 days from date of notice of the grantor’s final decision pursuant to SCCC 5.24.160 without a further act upon the part of the grantor, and the grantee may be required to forthwith remove its aerial structures or property from the streets and restore the streets to such condition as the grantor may require and upon failure to do so, the grantor may perform the work and collect all costs thereof, including all direct and indirect costs, from the grantee. The cost thereof shall be a lien upon all plant, property, or other assets of the grantee, wherever located.
(C) Receivership. The grantor shall have cause to revoke the franchise 120 days after the appointment of a receiver, or trustee, and to take over and conduct the business of the grantee, whether in receivership, reorganization, bankruptcy or other action or proceeding, unless such receivership or trusteeship has been vacated prior to the expiration of the 120 days, or unless:
(1) Within 120 days after their election or appointment such receiver or trustee has fully complied with all of the provisions of the franchise agreement and remedied all defaults thereunder; and
(2) Such receiver or trustee, within the 120 days, has executed an agreement, duly approved by the court having jurisdiction in the premises, whereby such receiver or trustee assumes and agrees to be bound by each and every provision of the franchise. [Ord. 5290 § 17, 2019; Ord. 3914 § 2, 1988].
5.24.140 Franchise applications.
(A) Franchise Applications. Applicants for a franchise, or renewal thereof, shall submit to the grantor, or to a designated agency, written application in a format provided by the grantor, at the time and place designated by the grantor for accepting applications, and including the designated application fee. [Ord. 3914 § 2, 1988].
5.24.150 Records.
(A) Records. There shall be kept in the grantor’s offices a separate record for the franchise, which record shall show information as is specifically necessary to accomplish the identified regulatory task, including the amount collected annually from other users of service and the character and extent of the service rendered therefor to them.
The grantee shall keep true and accurate books and records in conformity with generally accepted accounting principles, consistently applied, showing all income, expenses and expense transfers, borrowing, payments, investments of capital, and all other transactions relating to the cable system.
(B) Reports of Financial and Operating Activity.
(1) No later than 90 days after the close of the grantee’s fiscal year, the grantee shall present a written report to the grantor which shall include:
(a) A financial report setting forth gross revenues for purposes of verifying the franchise fee payable hereunder, which report shall be certified by an officer of the grantee;
(b) A summary of the previous year’s activities, including, but not limited to, subscriber totals and new services;
(c) A summary of complaints received and remedial action taken;
(d) Projected plans for the future in any aspect of its operations in which the grantee can foresee a voluntary or required change.
(2) Performance Tests and Compliance Reports. No later than April 15th of each year, the grantee shall provide a written report of any FCC or other performance tests required or conducted. In addition, the grantee shall provide reports of the test and compliance procedures established by its franchise agreement, or in this chapter, no later than 30 days after the completion of tests.
(3) Additional Reports. The grantee shall prepare and furnish to the grantor, in writing at the times and in the form prescribed by the grantor, such additional reports with respect to its operation, affairs, transactions or property as may be reasonably necessary and appropriate to the performance of any of the rights, functions or duties of the grantor, relating to the franchise agreement, as specified by the grantor, so long as the provision of the reports does not unreasonably interfere with the grantee’s operations.
(C) Communications and Regulatory Agencies. Copies of all communications between the grantee and the FCC or any other agency having jurisdiction in respect to any matters affecting cable communications operations authorized pursuant to a franchise shall be submitted promptly to the grantor upon request. [Ord. 3914 § 2, 1988].
5.24.160 Enforcement mechanism.
(A) Notice of Franchise Default. Prior to formal consideration by the grantor of termination of the franchise because of failure to correct a default attributed to the grantee, the grantor shall make written demand on the grantee to correct the default alleged. If the default continues for a period of 60 days following such written demand, excluding time during which the grantee is unable to comply because of unforeseeable conditions not under its control, franchise termination may be placed on the grantor’s next available regular meeting agenda. The grantee shall be served a written notice of such proposed termination at least 10 days in advance giving the time and place of the grantor’s meeting. At its meeting the grantor shall hear the grantee and any person interested in the matter and shall determine, at that or subsequent meetings, in its discretion, an appropriate course of action for enforcement or termination of the franchise.
(B) Delegation of Enforcement Mechanisms. Such liquidated damages as the grantor may assess against the grantee which do not include loss of franchise may, at the grantor’s option, be determined by an officer or agency of the grantor to which it may delegate such administrative considerations and decisions subject to the criteria and amounts contained in this chapter and the franchise agreement; provided, however, that no such liquidated damages may be assessed against the grantee pursuant to this subsection without the grantee being afforded due process, including notice, a public hearing and an opportunity to cure. [Ord. 5290 § 17, 2019; Ord. 3914 § 2, 1988].
5.24.170 Interconnection.
(A) Interconnection with Systems Under Grantor’s Jurisdiction. Subject to the provisions of subsection (B) of this section, upon direction of the grantor, the grantee shall interconnect its cable system with those other cable systems under the grantor’s jurisdiction within no more than six months from the date of the order.
(B) Interconnection with Systems Outside of Grantor’s Jurisdiction. The grantee shall interconnect access, local origination, and such other channels of the cable system as designated by the grantor, with any or all other cable systems in contiguous areas, if a mutually acceptable cost allocation formula is agreed to by the respective operators. Interconnection of systems may be done by direct cable connection, microwave link, satellite or other appropriate methods.
(C) Initial Technical Requirements to Assure Future Interconnection Capability.
(1) All cable systems receiving franchises to operate within the franchise area shall use the standard frequency allocations for television signals.
(2) All cable systems are required to use signal processors at the headend for each television signal.
(3) The grantee shall provide local origination equipment that is compatible throughout the area so that videocassettes or videotapes can be shared by various cable systems. [Ord. 3914 § 2, 1988].
5.24.180 Miscellaneous provisions.
(A) Captions. The section and subsection numbers and captions throughout this chapter are intended to facilitate reading and reference. Such numbers and captions shall not affect the meaning or interpretation of any part of this chapter.
(B) Franchise References. A franchise which cites, refers to, or otherwise incorporates this entire chapter or portions thereof shall be deemed to be a franchise issued under, subordinate to, and subject to this chapter. Such a franchise may employ, as sufficient for citation, reference, or incorporation, the section or subsection number and caption of this chapter, followed by a statement of the detail specification, or requirement of the franchise pursuant to such reference. A franchise containing such references shall be taken together with this chapter, the franchise agreement and any additional citations and/or references herein or in the franchise as forming a complete document, having the same force and effect as though all related provisions were contained in a single document.
(C) Filing. When not otherwise prescribed herein, all matters herein required to be filed with the grantor shall be filed with the grantor’s official or agency as designated by the grantor.
(D) Nonenforcement by the Grantor. A grantee shall not be relieved of its obligation to comply with any of the provisions of this chapter, or of its franchise or any law or regulation, by reason of any failure of the grantor to force prompt compliance.
(E) Continuity of Service. It shall be the right of all subscribers to receive all available services insofar as their financial and other obligations to the grantee are honored. In the event that the grantee elects to overbuild, rebuild, modify or sell the cable system, or the grantor revokes or fails to renew the franchise, the grantee shall ensure that all subscribers receive continuous, uninterrupted service subject to subsection (I) of this section. In the event of purchase by the grantor, or a change of grantee, the current grantee shall cooperate with the grantor to operate the cable system for a temporary period, to maintain continuity of service to all subscribers. In the event that the grantee, through its own fault, discontinues service for 72 hours, the grantor may by resolution assume operation of a cable system for the time necessary to maintain continuity of service.
(F) Operation by Grantor. During any period when the cable system is being operated by the grantor pursuant to subsection (E) of this section, the grantor shall attempt to cause as little disruption of operations as is consistent with the maintenance of continuing service to subscribers. Notwithstanding the foregoing, the grantor shall, as it deems necessary, make any reasonable changes in any aspect of operations desirable, in the grantor’s sole judgment, for the preservation of quality of service and its continuity. The grantor shall further, during any such period, maintain to the best of its ability the cable system’s records, physical plant, financial integrity and funds, and other details and activities normally involved in operations.
(G) Management by Grantor. The grantor may, upon assuming operation of a cable system pursuant to subsection (E) of this section, appoint a manager to act for it in the overall as well as detailed direction and conduct of the cable system’s affairs. Such manager shall have the authority delegated to them by the grantor and shall be solely responsible to the grantor for management of the cable system. The grantee shall reimburse the grantor for all its reasonable costs or damages in excess of cable system revenues during grantor operation if the franchise is in full force and effect during the period of grantor operation.
(H) Notices. All notices and other communications to the grantee shall be addressed to it at the address within the franchise area at which the grantee conducts its business. All notices and other communications to the grantor shall be addressed to it at its published address for receipt of public communications. All notices sent pursuant to this chapter or a franchise shall be sent by certified mail, return receipt requested.
(I) Force Majeure—Grantee’s Inability to Perform. In the event the grantee’s performance of any of the terms, conditions, obligations or requirements of this chapter, or any franchise granted under this chapter, is prevented or impaired due to any cause beyond its reasonable control and not reasonably foreseeable, such inability to perform shall be deemed to be excused, and no penalties or sanctions shall be imposed as a result thereof. In addition to those causes specified in the franchise agreement, such causes beyond the grantee’s reasonable control and not reasonably foreseeable shall include, but not be limited to, any acts of God, civil emergencies, labor unrest, strikes, inability to obtain gratis access to an individual’s property, any inability of the grantee to secure all necessary permissions or permits to utilize necessary poles or conduits so long as the grantee utilizes due diligence to timely obtain the permissions or permits and any delay caused by a utility. The fact that force majeure provisions of this subsection are in certain other provisions of this chapter expressly referred to shall not carry the implication with respect to other provisions of this chapter (if the provisions of this subsection would otherwise be applicable thereto) that the force majeure provisions of this subsection were not meant to apply. In SCCC 5.24.110(D)(1) and (2), the events of force majeure applicable thereto are limited to those specified in SCCC 5.24.110(D)(3).
(J) Application. All of the provisions of this chapter shall apply to all persons operating a cable system and/or receiving or attempting to receive service, whether or not such person is a lawful subscriber.
(K) No Implied Grantee Waiver. By accepting a franchise issued pursuant to this chapter, the grantee does not waive the right to attack the legality of this chapter, or any subsection thereof, in any subsequent administrative or judicial proceeding.
(L) Severability. If any provision of this chapter is determined to be void or invalid by any administrative or judicial tribunal, that provision shall be deemed severable and such invalidation shall not invalidate the entirety of this chapter or any other provision thereof. [Ord. 5290 § 17, 2019; Ord. 3914 § 2, 1988].