Chapter 5.25
CABLE TELEVISION AND COMMUNICATION SYSTEMS FRANCHISE PROCEDURE
Sections:
5.25.030 Processing of franchise applications.
5.25.070 Regulation of franchise.
5.25.080 Public usage of the system.
5.25.090 PEG access facility management.
5.25.100 General financial and insurance provisions.
5.25.110 Design and construction provisions.
5.25.130 Continuity of service.
5.25.150 Rights reserved to the grantee.
5.25.180 Termination of franchise by receivership or bankruptcy.
5.25.190 Procedures in the event of termination or expiration.
5.25.200 Implementation of cable communications policy.
5.25.210 Equal employment opportunity requirements.
5.25.010 Findings.
The City Council finds that the development of cable television and communications systems has the potential of greatly benefiting and impacting the residents of the City. The Council further finds that because of the complex and rapidly changing technology associated with cable systems, the public’s convenience, safety, and general welfare can best be served by establishing powers which should be vested in the City as provided in Federal and State law, or such persons as the City shall designate. It is the intent of this chapter to specify and provide the means to attain the public interest and purpose in these matters, to promote competition and minimize unnecessary regulation that would impose an undue economic burden on the system, and to assure the provision of the widest possible diversity of information over cable systems consistent with the public good. Any franchise issued pursuant to this chapter shall be deemed to include these findings as an integral part thereof. (Ord. 90-1028 § 1)
5.25.020 Definitions.
For purposes of this chapter, the following terms, phrases, words and their derivations shall have the meanings given herein:
A. “Basic cable service” means the lowest level of service available to all subscribers exclusive of optional services, which includes the retransmissions of local television broadcast signals.
B. “Cable Act” or the “Act” means the Cable Communications Policy Act of 1984, as amended, 47 U.S.C., Section 521, et seq.
C. “Cable communication systems”, “cable system” or “CATV system” means a facility using a public right-of-way, consisting of a set of closed 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.
D. “Cable services” means services, present or future, which are provided by the grantee’s cable communication system to its subscribers located in the franchise area, which are transmitted and distributed by means of cable located at least partially in or over the public rights-of-way of the City, and for which a fee is charged to the subscribers. The terms shall include, but not be limited to:
1. The one-way transmission to subscribers of video programming or other programming service,
2. Subscriber interaction, if any, which is required for the selection of such video programming or other programming service.
E. “City” means the City of SeaTac or any official thereof acting within the scope of official authority.
F. “Council” means the SeaTac City Council.
G. “Franchise” or “franchise agreement” means the initial authorization or renewal thereof, issued by a franchising authority, whether such authorization is designated a franchise, permit, license, contract, certificate, agreement, or otherwise, which authorizes the construction or operations of a cable system.
H. “Franchise fee” means the fee imposed by a franchising authority or other governmental entity on a grantee, cable subscriber or both solely because of its status as such. The term “franchise fee” does not include:
1. Any tax, fee or assessment of general applicability;
2. Capital costs which are required by the franchise to be incurred by grantee for public, educational, or governmental access facilities;
3. Costs or charges incidental to the awarding or enforcing of the franchise, including, but not limited to, payments for bonds, permits, letters of credit, insurance, indemnification, penalties, or liquidated damages;
4. Any fee imposed under Title 17, United States Code.
I. “Grantee” means any entity receiving a franchise and its lawful successor or transferee.
J. “Gross receipts” means the annual gross receipts or revenue of the grantee from all sources in the operation of the cable communications system, excluding any bad debt, sales tax, excise tax, or other taxes collected for direct pass-through to local, State or Federal government.
K. “Public, educational or government access facilities” or “PEG access facilities” means channel capacity designated for public, educational, or governmental use; and facilities and equipment for the use of such capacity. (Ord. 90-1028 § 2)
5.25.030 Processing of franchise applications.
A franchise may be granted only upon application and such applications shall be processed in the following manner:
A. Applications for a franchise, or modification of an existing franchise shall be processed in an expeditious manner.
B. Applications shall be submitted in the form and manner prescribed by the City Manager, or designee, in the regulations adopted pursuant to this chapter.
C. Applicants for a franchise to operate in an area for which a franchise has previously been granted, shall have the right to the protection of proprietary information contained in the application from premature disclosure to prospective competitors until consideration of the application has been scheduled for public hearing.
D. Within sixty (60) days after receipt of an application, the City Manager, or designee, shall transmit a written recommendation to the Council to approve, amend or disapprove the application. The Council shall schedule a public hearing on the question of granting the franchise application within sixty (60) days after receipt of the said written recommendation.
The Council shall act on the application no later than fourteen (14) days after the public hearing is completed. (Ord. 95-1012 § 1: Ord. 90-1028 § 3)
5.25.040 Grant of franchise.
No cable system shall occupy or use any City right-of-way without a franchise granted by the City, subject to the following:
A. The City may grant franchises to construct, operate, maintain and/or reconstruct a cable communication system in all or part of the City. If the City grants a franchise, the franchise shall constitute both a right and an obligation of the grantee to abide by the provisions of this chapter and of the franchise agreement.
In the event of any conflict between this chapter and any franchise agreement issued under it, this chapter shall control.
B. Any franchise granted shall be nonexclusive. The City specifically reserves the right to grant, at any time, such additional franchise for a cable communications system within the same or other areas of the City as it deems appropriate.
C. The City may establish, in accordance with the Cable Act, reasonable requirements for new franchises or franchise renewals. The City may modify franchises at the time of renewal, transfer, or other disposition, or when the grantee’s service area is altered, provided the grantee is notified in advance of the proposed modification and is provided an opportunity to present arguments against the modification, or alternatives in lieu of it. The City may also modify franchise then in effect upon giving thirty (30) days’ written notice to the grantee of its intention to do so, upon request of the grantee under the circumstances provided in the Cable Act, or when the franchise is inconsistent with governing laws or statutes. Modifications of franchises must be approved by the Council.
D. The term of any franchise shall be no more than fifteen (15) years from the effective date of the franchise. The effective date of the franchise shall be the date of execution of the franchise agreement by the City, subject to prior execution by the grantee, unless otherwise specified.
E. Ownership of franchises shall be limited as specified in the Cable Act. The City may, as provided, hold an ownership interest in a cable service, but shall not exercise editorial control over programming except on government access channels.
F. A franchise may be denied if the regulating authority finds, after due investigation, that the applicant, to include the principal owners of the organization requesting the franchise, has:
1. Made any false statements or substantive omissions on the application;
2. Within five (5) years of the date of application been convicted of a felony directly related to the operation of a cable television franchise;
3. Ever had a judgment in an action for fraud, deceit or misrepresentation entered against it, her, him or them by any court of competent jurisdiction;
4. Pending any legal claim, lawsuit or administrative proceeding arising out of or involving a cable system; or
5. Had a franchise revoked for cause within ten (10) years of the date of application.
G. No franchise shall be transferred, in whole or in part, without the City’s prior consent. The consent of the City to any transfer shall not be unreasonably withheld nor shall it constitute a waiver or release of any of the City’s rights.
H. The franchise required by this chapter is separate from and in addition to a business license that may be required under Chapter 5.05 SMC. (Ord. 19-1014 § 5, 2019: Ord. 90-1028 § 4)
5.25.050 Franchise renewal.
A franchise may be renewed in the following manner:
A. Not later than three (3) years prior to the expiration of a franchise, the City may require, or the grantee may request, public hearings to evaluate the grantee’s past performance and to assess the community’s future cable needs as provided for under the Cable Act.
B. Following the public hearings, and based on the findings thereof, the City may renew the franchise, or initiate administrative proceedings to determine whether or not to renew the franchise.
C. Based on the evidence presented during the administrative proceedings, the City may deny a franchise renewal if it finds that:
1. The grantee failed materially to comply with franchise terms;
2. The grantee’s service, other than programming, was unreasonable in light of community needs;
3. The grantee is not financially qualified to continue service; or
4. The grantee’s renewal proposal is unreasonable in light of community needs.
D. The City may deny renewal only on specific grounds, and the grantee has the right to judicial review of any adverse decision as provided for in the Act.
E. If mutually agreeable to the City and the grantee, any or all of the administrative procedures specified in the foregoing subsections may be waived. Such action will establish a presumption of renewal. (Ord. 90-1028 § 5)
5.25.060 Franchise fee.
Any grantee who receives payment or other consideration for the provision of cable service involving the use of the City’s rights-of-way shall pay to the City an annual franchise fee equal to five percent (5%) of the grantee’s annual gross receipts, subject to the following:
A. The annual franchise fee shall be payable quarterly. All payments received as herein provided are to be forwarded to the Director of Finance and credited to the City’s current expense fund.
B. In the event that the grantee leases available channels of the cable system to another entity for commercial use, wherein the lessee bills subscribers directly for the services provided over the cable system and for which payments are made directly to the lessee, the lessee shall pay to the City, under the same circumstances as the grantee, a franchise fee of five (5%) percent of the gross revenues realized from the operation of the leased channels.
C. The City shall have the right to audit and to recompute any amounts determined to be payable in satisfaction of the annual franchise fee. When the audit determines that the grantee’s actual payment was less than the amount owing, the grantee shall pay, in addition to the deficiency, interest on the deficiency equal to twelve percent (12%) per annum compounded daily from the date originally due.
D. A part requesting a new franchise, renewal, or transfer shall pay a franchise application fee of two hundred dollars ($200.00) to offset the costs incurred by the City in the processing of the request. (Ord. 90-1028 § 6)
5.25.070 Regulation of franchise.
The City shall exercise appropriate regulatory authority under this chapter and under applicable law, subject to the following:
A. The City may, at its sole option, participate in a joint regulatory agency and may delegate all or part of its responsibility in the area of cable communications.
B. This chapter and the regulation of cable television and communications shall be administered by the City Manager, or designee, with specific authority to:
1. Supervise the implementation of cable policy, regulations and franchise agreements;
2. Facilitate the resolution of complaints received from cable users;
3. Enforce cable system regulations as necessary;
4. Supervise government programming with respect to PEG operations, or coordinate with a designated PEG management authority;
5. Provide for public information and planning;
6. Monitor cable policy and related developments in other jurisdictions and make recommendations for changes of policy or regulations as appropriate in order to encourage the growth and development of cable systems;
7. Develop and maintain productive relationships with cable system operators and interested community groups to assure responsiveness to the needs and interests of the community;
8. Provide staff assistance to any advisory committee or regulatory agency hereafter established.
C. The grantee shall file a complete schedule of subscriber rates with the City and shall update such schedule prior to any rate change. The grantee shall receive no additional consideration in connection with its provision of cable service other than as listed on its filed schedule excluding bulk or commercial accounts. The City expressly reserves the right, subject to the provisions of State and Federal law, to regulate subscriber rates.
D. The City may require performance evaluations or community needs assessments. Failure of the grantee to correct any inadequacy equating to a material breach of the franchise found at such evaluations or by such assessments shall be subject to the remedies contained in this chapter. (Ord. 95-1012 § 1: Ord. 90-1028 § 7)
5.25.080 Public usage of the system.
If so specified in the franchise agreement, the City may utilize a portion of the cable communications system capacity, and associated facilities and resources, to develop and provide cable services that will be in the public interest. This may include the use of institutional networks for non-entertaining purposes, to include interactive service where feasible. (Ord. 90-1028 § 8)
5.25.090 PEG access facility management.
It is the City’s intent to insure that PEG access facilities, equipment and/or channels are provided for in any franchise agreement, and that they shall be managed in the best public interest so that programming using such facilities will be open to all residents, and available for all forms of public expression, community information and debate of public issues. Pursuant to these objectives, the City may delegate the responsibility for PEG access facility management to a nonprofit entity as established by ordinance. (Ord. 90-1028 § 9)
5.25.100 General financial and insurance provisions.
Requirements for bonding and insurance and provisions for liability and indemnification shall be as provided in the rules and regulations developed by the City Manager, or designee. (Ord. 95-1012 § 1: Ord. 90-1028 § 10)
5.25.110 Design and construction provisions.
Cable television and communications system design, the requirement for construction permits, the enforcement of remedies for delay and construction, inspection of the system, and interconnection shall be as follows:
A. The cable television and communication system shall be constructed as specified in the franchise agreement including all construction, technical and performance quality standards contained or referenced therein. Such standards shall not exceed the standards and guidelines for technical quality relating to facilities and equipment of cable systems established by the Federal Communications Commission.
B. The grantee shall comply with the provisions of Ordinance No. 90-1013, codified in Chapter 11.05, relating to utilities on City’s rights-of-way and Ordinance No. 90-1023, codified in Chapter 13.25, relating to right-of-way use permits and any other applicable ordinances regarding construction or use permits as applicable to cable television and communications systems.
C. The City may apply any or all of the remedies specified in this chapter for delays in system construction or failures to meet construction requirements.
D. The City may inspect the cable system, and may require the grantee to conduct tests to insure compliance with this chapter. If, on the completion of such tests, it is determined by the City that the grantee is not in compliance with the provisions of this chapter, or of the franchise agreement, the City may charge the grantee an inspection fee to cover the costs of the inspection.
E. The grantee may be required to interconnect with any or all other cable systems in the City, or in adjacent areas, upon the directive of the City, unless good and sufficient cause is demonstrated to the City that such interconnection is not technically feasible, is beyond the power of the grantee to carry out, or that the cost of interconnection would cause an unreasonable or unacceptable increase in subscriber rates. (Ord. 90-1028 § 11)
5.25.120 Service provisions.
The grantee shall provide cable television and communications services in accordance with the following:
A. The grantee shall provide, as a minimum, the range and mix of services listed in the franchise agreement. Services shall not be reduced or significantly changed without prior notification to the City. Such notification is intended for the informational benefit of the City and is not intended to invoke regulation of programming.
B. The grantee shall provide public, educational and government (PEG) access facilities, which may include channel capacity, interface equipment, and cabling, as specified in the franchise agreement.
C. The City shall assure the maximum utilization of existing PEG access channels prior to requiring the allocation of any additional PEG access channels. To this end, the City shall coordinate the usage of PEG access channels and facilities with King County and other jurisdictions as appropriate.
D. Access to cable service shall not be denied to any group of potential subscribers solely because of the income level of the area in which they reside. (Ord. 90-1028 § 12)
5.25.130 Continuity of service.
The right of subscribers to continued cable television and communications services shall be conditioned upon the following:
A. As long as they honor their obligations to the grantee, all subscribers will have the right to receive all available services offered by the grantee, and to receive continuous uninterrupted service, regardless of the circumstances, during the lifetime of the franchise, except for temporary interruptions of service which may be required from time to time to rebuild, modify, or improve service. Any interruption of service caused by the grantee shall be subject to rebate, the provisions for which shall be included in the franchise agreement.
B. As long as it is entitled to revenues from operation of the cable system, the grantee will maintain continuity of service during any temporary transition in the status of the franchise agreement, the cable system, or control of the grantee. This obligation to continue service shall not exceed eighteen (18) months without the written approval of the grantee.
C. If the grantee elects not to renew a franchise, the grantee shall notify the City of its intent not less than twelve (12) months prior to the expiration date of the franchise. Failure to provide this notification will subject the grantee to the continuity of service provisions herein in order to provide for an orderly transition to another cable system operator without interruption of service. (Ord. 90-1028 § 13)
5.25.140 Rights of the City.
During the term of any franchise agreement, the City shall maintain, and may invoke, the following rights:
A. If a grantee’s renewal request is denied or if the franchise expires or is revoked, the City may, after appropriate administrative review, acquire ownership of the cable system. Such acquisition shall be at fair market value but with no value allocated to the franchise itself. In determining the price it is to pay, the City may set off against the value of the system any actual cost to the City and subscribers resulting from the grantee’s action which led to the denial or revocation.
B. The City shall have the right to inspect all construction or installation work performed subject to the provisions of the franchise and to make such tests as it shall find necessary to ensure compliance with law and with the franchise agreement.
C. At the expiration of the term for which the franchise is granted, or upon its revocation or expiration, the City shall have the right to require the grantee to remove, within a specified period of time not less than thirty (30) days, and at grantee’s own expense, all portions of the cable system from all streets and public property within the franchise area that are above ground, or are below ground and constitute a hazard to the health, welfare or safety of the City residents.
D. Nothing herein shall be deemed or construed to impair or affect the right of the City to acquire the property of the grantee, either by purchase or through the exercise of its right of eminent domain, at just compensation.
E. Neither the granting of any franchise nor any provision thereof shall constitute a waiver or bar to the City’s exercise of its governmental rights or powers, subject to the grantee’s rights under its franchise and franchise agreement. (Ord. 90-1028 § 14)
5.25.150 Rights reserved to the grantee.
The following rights shall be reserved to the grantee during the term of any franchise and franchise agreement:
A. In the event of any dispute between the grantee and the City arising out of this chapter or the franchise agreement, the grantee shall pursue and exhaust all available administrative remedies pursuant to law prior to pursuing any appropriate legal action.
B. Subject to prior City approval, the grantees may enter into written overbuild agreements.
C. The grantee shall have the right, at any time, to petition the City for modification of its franchise agreement. (Ord. 90-1028 § 15)
5.25.160 Remedies.
The City shall have the following remedies for violations or delays in construction:
A. If a grantee violates any material provision of this chapter or of applicable law, or breaches any material provision of its franchise, the City may impose any or all of the following remedies:
1. Exercise its right under the security fund.
2. Assess monetary damages.
3. Terminate the franchise for cause.
4. Seek legal and equitable relief in superior court.
B. The City may impose any or all of the following remedies for delays in system construction, upgrading or rebuilding as required by the franchise agreement:
1. Exercise its right under the construction bond for any delay exceeding three (3) months.
2. Assess monetary damages up to the maximum amount specified in the franchise agreement.
3. Terminate the franchise, as materially breached, for any delay exceeding six (6) months.
C. Any remedies shall be applied in accordance with due process of law.
D. A grantee’s duty to fully perform is excused and no remedy or sanction shall be imposed if the failure is due to any cause beyond its reasonable control and if grantee notified the City in writing of the reason for the failure within twenty (20) days of the discovery of the reason. (Ord. 90-1028 § 16)
5.25.170 Reports.
The City may require the grantee to submit such information as the City shall need to implement this chapter. The City may verify the accuracy of any information submitted. All reports and records required by this chapter shall be furnished at the grantee’s sole expense. A grantee’s failure or refusal to file any of the required information, or its filing of false or misleading information, shall be deemed a violation of this chapter. (Ord. 90-1028 § 17)
5.25.180 Termination of franchise by receivership or bankruptcy.
The City may terminate any franchise after the appointment of a receiver or trustee whether in receivership, reorganization, bankruptcy or other action or proceeding. (Ord. 90-1028 § 18)
5.25.190 Procedures in the event of termination or expiration.
If a franchise expires, is revoked, terminated, or a renewal request is denied, the City may order the removal of the system facilities and/or purchase the system as provided in this chapter. If a franchise is revoked, terminated, or a renewal request is denied, the City may also order the grantee to maintain and operate the cable system for a defined period of time. This continuity of service provisions shall not apply in the event the grantee chooses not to renew a franchise which is to expire, provided the grantee makes this intention known to the
City at least twelve (12) months prior to the expiration of the franchise. (Ord. 90-1028 § 19)
5.25.200 Implementation of cable communications policy.
The policies contained in this chapter, shall be implemented by means of administrative rules and regulations which shall be developed by the City Manager, or designee. A copy of the said rules and regulations shall be available in the Office of the Director. (Ord. 95-1012 § 1: Ord. 90-1028 § 20)
5.25.210 Equal employment opportunity requirements.
The grantee shall establish, maintain, and execute an equal employment opportunity plan in accordance with the guidelines established in the franchise agreement which shall be consistent with all Federal, State and City equal employment opportunity requirements, and the City’s affirmative action policies. The grantee shall file, with the City, annual employment records in the format required by rules and regulations; provided, that if similar reports shall be required by a Federal or State agency, then copies of those reports shall be submitted to the City and shall suffice to meet the requirements herein. Failure to comply with equal employment opportunity requirements, or to file the required records or reports, shall constitute a breach of the franchise agreement and the City may invoke the remedies provided by this chapter. (Ord. 90-1028 § 21)
5.25.220 Non-recourse.
The grantee shall have no recourse whatsoever against the City or its officials, boards, commissions, agents or employees for any loss, costs, expenses, or damages arising out of any provision or requirement of the franchise or because of the enforcement of the franchise or this chapter; provided, that such loss, costs, expenses or damages are not the result of the sole negligence of the City or its agents. The grantee shall not be relieved of its obligation to comply with any of the provisions of this chapter by reason of the City’s failure to promptly enforce compliance. (Ord. 90-1028 § 22)