Alhambra Municipal Code Ch. 4.06 Telecommunications Equipment Franchises in Public Rights-of-Way

This chapter establishes procedures for the granting of franchises to use and occupy the public rights-of-way for the purpose of constructing and maintaining telecommunications equipment. The city has the authority to manage public property through its police power and other powers granted by the Constitution and statutes of the United States and the State of California, the Charter of the City of Alhambra and this code. The authority and procedures in this chapter are intended to ensure that applicants seeking to occupy the public rights-of-way for the purpose of constructing and maintaining telecommunications equipment are treated fairly with sufficient consideration for due process, and that the city's responsibility to control the use of public rights-of-way and to demand a fair rate of compensation for the public for their use is preserved. This chapter does not provide for franchises for the right of any provider of telecommunications services to operate within the city.

(Ord. 4387, passed 1-24-00)

For the purpose of this chapter, the following definitions shall apply unless the context clearly indicates or requires a different meaning.

FRANCHISE. Includes any authorization or permission granted by the city pursuant to this chapter to erect, construct, install, or maintain (but not operate) telecommunications equipment occupying any public right-of-way within the city. Any such authorization shall not mean or include any license or permit required for the privilege of transacting and carrying on a business within the city generally (commonly referred to as a "business license") as required by other ordinances and laws of this city.

FRANCHISE AGREEMENT. A negotiated, written agreement between the franchisee and the city which sets forth the terms and conditions of the grant of franchise, and which has been approved by the City Council by written ordinance.

FRANCHISE FEE. The periodic fee imposed on a franchisee for use of the public right-of-way.

FRANCHISEE. A person, firm, corporation or other legal entity granted a franchise by the City Council under this chapter (collectively "franchisee"), and the lawful successor, transferee, or assignee of such franchisee.

GROSS REVENUE. Any and all revenue or compensation in any form, of the franchisee, its parent companies, subsidiaries and affiliates for all telecommunications equipment operations and telecommunications services within the city, in accordance with generally accepted accounting principles. "Gross revenue" shall include, without limitation:

(1) Access charges paid to the franchisee by other parties.

(2) The leases or re-sales of lines or circuit paths to third parties.

(3) All telecommunications services revenues charged on a flat rate basis.

(4) All telecommunications services charges on a usage-sensitive or mileage basis.

(5) All revenues from local service.

(6) All revenues from authorized rental of conduit space.

(7) All revenues from authorized rentals of any portion of franchisee's telecommunications system, including plant, facilities, or capacity to lease to others.

(8) All other revenues collected from franchisee's telecommunications business pursued within the city, excluding third party billing arrangements not related to franchisee's telecommunication system.

(9) Recoveries of bad debts previously written off and revenues from the sale or assignment of bad debts. Unrecovered bad debts charged off after diligent, unsuccessful efforts to collect are excludable from gross revenues from telecommunications business. The term "gross revenues" does not include revenue uncollected from customers (bad debts) and sale or lease of customer service equipment, taxes, interconnection fees paid by franchisee to other telecommunication carriers, or other similar pass through charges for which franchisee merely acts as a collecting agent and derives no economic benefit or "mark-up. "

RIGHT-OF-WAY. Any public highway, public street, public way, or public place in the city, either owned by the city or dedicated to the public for public purposes.

TELECOMMUNICATIONS. The transmission, between or among points specified by the user, of information of the user's choosing, without change in the form or content of the information as sent and received.

TELECOMMUNICATIONS EQUIPMENT. Equipment, other than customer premises equipment, used by a carrier to provide telecommunications services, and includes software integral to such equipment (including upgrades).

TELECOMMUNICATIONS SERVICES. The offering of telecommunications for a fee directly to the public, or to other classes of users as to be effectively available directly to the public, using a public right-of-way, regardless of the equipment used in each case.

TELECOMMUNICATIONS SYSTEM. A system used or to be used to provide telecommunications services including public or private line video, data or voice service to another person, using or crossing a right-of-way in the city other than cable television service offered pursuant to a franchise granted by the city.

(Ord. 4387, passed 1-24-00; Am. Ord. 4405, passed 2-26-01)

The City Council shall have the authority to grant a franchise to erect, construct, install, operate, or maintain a facility to provide telecommunications services occupying the public right-of-way as approved by the City Council and subject to the terms and conditions of this chapter. Further, the city shall have the authority to demand reasonable consideration in the form of a franchise fee for the privilege granted by any franchise in accordance with this chapter.

(Ord. 4387, passed 1-24-00)

(A) Following the effective date of this chapter, no person shall erect, install, construct, or maintain telecommunications equipment within the public right-of-way unless the person has first obtained a franchise for such use granted by the City Council under such terms and restrictions as are set forth in this chapter and in the franchise agreement or has obtained some other specific grant of authority from the city for the use of the public right-of-way.

(B) No person shall operate telecommunications equipment which is erected, installed, or constructed within the public right-of-way following the effective date of this chapter unless the person has first obtained a Certificate of Public Convenience and Necessity from the California Public Utilities Commission setting forth the terms and conditions under which such person may operate such telecommunications equipment.

(C) The procedures set forth herein shall not be applied to any facility, or the operation and maintenance of any facility, which is now or hereafter otherwise specifically authorized to locate in the public right-of-way by federal, state, or local laws, and for which all required approvals by the city are properly obtained. Any applicant for a franchise who contends that its telecommunications services or telecommunications system is subject to the provisions of Public Utilities Code Section 7901 shall bear the burden of proving the applicability of such statute to the city.

(D) This chapter shall apply to any existing cable television system operating pursuant to a franchise awarded by the city which the franchisee uses to install, or maintain telecommunications equipment. This chapter shall also apply to any existing entity operating any telecommunications equipment pursuant to Public Utilities Code Section 7901 to the extent that this chapter is not preempted by such statute.

(E) Before applying for a franchise to install, maintain, or operate telecommunications equipment in a public right-of-way in the city, the franchisee shall obtain all required regulatory approvals, permits, authorizations or licenses (collectively "approvals") from the appropriate federal, state and local authorities. The applicant shall submit evidence of such approvals to the city upon the written request of the city. The applicant shall also submit an application, in a form prescribed by the city, and an application fee, in an amount set by resolution of the City Council, as set forth in § 4.06.070 (A)(3) of this chapter.

(F) This chapter shall not be construed as a waiver of any codes, ordinances, or regulations of the city or as a waiver of the city's right to require a franchisee or any person utilizing the telecommunications services to secure appropriate permits, licenses, or authorizations for such use. No fee or charge may be imposed upon a franchisee for any such permit or authorization, other than the standard fees or charges generally applicable to all persons for such permits or authorizations. Such standard fee or charge shall not be offset against the annual business license fee or franchise fee a franchisee is required to pay to the city pursuant to § 4.06.150 of this chapter.

(G) The procedures set forth in this section shall not be applied to:

(1) Any existing telecommunications system, or the operation and maintenance of any existing telecommunications system, which serves 100 or more parcels, residences, and/or business locations (or any combination thereof) within the city, and for which all other required approvals by the city are properly obtained.

(2) A planned telecommunications system if the construction plans approved by the city show a system that will pass within 300 feet of 100 or more parcels, residences, and/or business locations in the city, and will be capable of offering telecommunications services to more than 100 parcels, residences, and/or business locations in the city, or which will prove wholesale access to providers of telecommunications services to 100 or more parcels, residences, and/or business locations within the city, and for which all other required approvals by the city are properly obtained. For planned telecommunications systems attempting to comply with this section, any applicable franchise fee required by this chapter shall accrue, plus interest at a 10% annual rate, but the city shall stay its collection of the franchise fee and interest for three years from the first issuance of an excavation permit for the system. If the applicant does not construct its planned system to the extent necessary to provide and does not provide telecommunications services to, or does not construct its planned system to the extent necessary to provide and does not provide wholesale access to a provider of telecommunications services to 100 or more parcels, residences, and/or business locations (or any combination thereof) within three years of the city's first issuance of an excavation permit for the system, then this division (G) shall not apply, the applicant shall comply with Chapter 4.06, and the city shall collect any accrued franchise fees plus interest.

(3) The operation and maintenance of any telecommunications system to which wholesale access is provided for providers of telecommunications services to 100 or more parcels, residences, and/or business locations (or any combination thereof) within the city, and for which all other required approvals by the city are properly obtained.

(H) An applicant seeking a determination of compliance with division (G) shall complete an application form approved by the City Manager. The application form shall contain at least the following information:

(1) For existing telecommunications systems:

(a) A list or map of addresses, parcel numbers, or other similar information, and a set of plans or similar drawings which show the applicant's facilities do pass within 300 feet of 100 or more parcels, residences, and/or business locations within the city.

(b) A statement signed by a corporate officer of applicant or other similar responsible party affirming that the applicant's telecommunications system provides telecommunications service to 100 or more parcels, residences, and/or business locations (or any combination thereof within the city.

(2) For planned telecommunications systems:

(a) A list or map of addresses, parcel numbers, or other similar information, and a set of plans or similar drawings which show the applicant's facilities are planned to be constructed to pass within 300 feet of 100 or more parcels, residences, and/or business locations within the city, or are planned to be constructed to provide wholesale access to any other telecommunications system which passes within 300 feet of 100 or more parcels, residences, and/or business locations within the city.

(b) A statement signed by a corporate officer of applicant or other similar responsible party affirming that the applicant's telecommunications system is being constructed so that it will be capable of providing telecommunications service to 100 or more parcels, residences, and/or business locations (or any combination thereof) within the city within three years of the first issuance of an excavation permit for the planned system, or will be capable of providing wholesale access within three years of the first issuance of an excavation permit for the planned system to a telecommunications system providing telecommunications service to 100 or more parcels, residences, and/or business locations (or any combination thereof) within the city.

(3) For telecommunications systems which provide wholesale telecommunications services in the city:

(a) A list or map of addresses, parcel numbers, or other similar information, and a set of plans or similar drawings which show applicant's facilities and sufficient information to establish its provision of service to any other telecommunications system which passes within 300 feet of 100 or more parcels, residences, and/or business locations within the city.

(b) A statement signed by a corporate officer of applicant or other similar responsible party affirming applicant's provision of service to any other telecommunications system which serves 100 or more parcels, residences, and/or business locations (or any combination thereof) within the city.

(I) The application for determination of compliance with division (G) shall be reviewed by the Director of Public Works (or his or her designee) to determine if the application is in compliance with the requirements of division (G). The determination shall be completed within 21 days of receipt of the completed application form, and written notice of the determination shall be sent by first class mail to the applicant. If additional information from the applicant is required to complete the review, the city shall request the information in writing, and the review period shall be extended by the same amount of time required to obtain the additional information.

(J) An applicant may appeal the determination of compliance with division (G) by filing a written notice of appeal with the City Manager no later than ten working days after receiving notice of the determination. The notice of appeal shall set forth the name, mailing address and telephone number of the person appealing. The notice of appeal shall include or attach a statement describing the action being appealed, setting forth the grounds for the appeal, and describing the action requested of the City Manager. The scope of the appeal shall be limited to the grounds specified in the notice of appeal. No later than 30 days after the filing of a timely notice of appeal, the City Manager shall render a decision on the appeal. The City Manager's decision may affirm, reverse or modify the decision appealed. A copy of the City Manager's decision shall be provided to the person appealing at the address shown on the notice of appeal. Said person may appeal the City Manager's decision to the City Council by filing a written notice of appeal no later than ten working days after the City Manager's decision is received by the person, in accordance with the procedures in § 5.82.050.

(Ord. 4387, passed 1-24-00; Am. Ord. 4405, passed 2-26-01) Penalty, see § 4.06.120

Franchisees shall be subject to all provisions of the franchise agreement and all applicable laws, ordinances, and regulations of the City of Alhambra, County of Los Angeles, Los Angeles County Transportation Agency (LACTA), the Metropolitan Transit Authority, the Alameda Corridor East Construction Authority, the State of California, the United States of America, and any other public agency having jurisdiction over territory located within the city. The grant of a franchise shall not relieve the franchisee of any obligation under this code to obtain any business licenses, building and construction permits, public works permits, encroachment permits, use permits, or any other specific authorization that may be required for the proposed project.

(Ord. 4387, passed 1-24-00)

The city's grant of franchises for use of public rights-of-way for telecommunications equipment shall be non-exclusive.

(Ord. 4387, passed 1-24-00)

Negotiation and grant of a non-exclusive franchise shall comply with the following procedural requirements:

(A) Each applicant for a franchise shall submit the following to the city:

(1) A written request and application for franchise to the City Manager or the City Manager's designee (collectively, "City Manager") in a form prescribed by the City Manager;

(2) A proposal identifying the requested use of the public right-of-way, proposed locations (identified on plan sheets ready to be submitted for plan check to the Public Works Department) of right-of-way occupation, any necessary buffers or clearances needed to assure access and prevent interferences, method of construction, time of construction, recycling of construction material and waste, hours of operation, resources and procedures for maintenance, the amount and method of compensation to the city, and the initial term of the proposed franchise and any renewal, if applicable; and

(3) All applicable fees required by ordinance or resolution of the City Council.

(B) The City Manager shall negotiate a franchise agreement between the applicant and the city. The applicant shall sign the franchise agreement indicating acceptance of the terms prior to submission to City Council for consideration and, if appropriate, approval.

(C) The City Council shall hold a public hearing to consider awarding a franchise, consistent with the notice, bidding and the public hearing requirements of Article XXI of the Alhambra City Charter.

(D) The City Council may approve and accept the franchise agreement and grant the franchise by ordinance, deny the application for franchise, or continue the decision to grant the franchise and return the franchise agreement with direction for further negotiation between city staff and the applicant. No franchise may be awarded prior to 30 days after it is first introduced at a public meeting of the City Council.

(E) The city specifically reserves the right to grant, at any time, such additional franchises pursuant to this chapter as it deems appropriate. Additional franchises shall not be deemed to modify, revoke, terminate or damage any rights previously granted to any other franchisee.

(F) In the event a franchise application is filed proposing to install facilities within a franchise territory which overlaps in whole or in part an existing franchised area, a copy shall be served by the applicant by certified mail upon the current franchisee(s). Applicant shall notify franchisee(s) of existing overlapping territory. Proof that a copy of the application has been served upon the current franchisee(s) shall be provided to the city. No application for overlapping territory shall be processed until proof of service has been furnished to the city. It is not the intent of this chapter to either require or prohibit overbuilding.

(G) Applications for new, renewed or amended franchises shall be made in such form as the city may prescribe. New, renewed or amended franchises which expand scope of service shall be accompanied by a non-refundable application fee.

(Ord. 4387, passed 1-24-00) Penalty, see § 4.06.120

A franchisee shall be subject to all other conditions, restrictions, and specifications in a franchise agreement negotiated between the city and franchisee as adopted and approved by written ordinance of the City Council and the provisions of federal, state and other local laws, including the City Charter and this chapter. The city reserves the power to adopt and enforce additional requirements and regulations as city determines may be necessary and convenient in the exercise of its jurisdiction under this chapter and may determine any question of fact which may arise during the existence of any franchise granted hereunder.

(Ord. 4387, passed 1-24-00)

The City Council may waive any procedural requirement imposed under this chapter when the City Council determines it to be in the best interest of the city.

(Ord. 4387,passed 1-24-00)

No franchise or portion thereof granted pursuant to this chapter shall be transferred, sold, hypothecated, sublet or assigned (collectively "transferred"), nor shall any of the rights or privileges herein be hypothecated, 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, either by act of a franchisee or by operation of law, without the prior written consent of the city expressed by ordinance. Any attempt to do any of the foregoing with respect to any of the rights herein without the consent of city shall be void. For purposes of this section, any dissolution, merger, consolidation, change in control or other reorganization of a franchisee shall be deemed an assignment of this agreement. For purposes of this section, a change of corporate name shall not be deemed to be a transfer. The city may impose reasonable conditions of approval on a transfer of a franchise. Any application for a transfer of a franchise shall be made in the manner prescribed by the city. The application shall include a transfer application fee in an amount to be set by city, by resolution of the Council. The transfer application fee is intended to offset the city's anticipated costs of all reasonable and customary direct and indirect administrative expenses including consultants and attorneys, necessary to analyze the application. The applicant shall reimburse the city for all reasonable consultants', attorneys' and staff costs directly related to the city's consideration of the application for transfer not offset by the transfer application fee, whether or not the city approves the application for transfer.

(Ord. 4387, passed 1-24-00) Penalty, see § 4.06.120

Franchisee shall indemnify, protect, defend, and hold harmless the city, its officers, officials, employees, and agents against any and all claims, demands, losses, costs, expenses, penalties, damages, or liability of any kind or nature, including but not limited to injury, death of persons, damage to property, the release of any hazardous substance into the environment and any attorney fees, arising directly or indirectly out of franchisee's exercise or enjoyment of its franchise, or any other acts or omissions by franchisee, its officers, employees, or agents, excepting only liability arising out of the sole negligence of the city. Further, franchisee shall agree, and shall so state in the franchise agreement, to indemnify, protect, defend, and hold harmless the city, its officers, officials, employees, and agents against any and all claims, demands, losses, costs, expenses, penalties, damages, or liability of any kind or nature resulting from, or arising with respect to, the award of the franchise, including but not limited to the procedure for accepting and reviewing proposals and the decision of award, negligent or otherwise, including but not limited to a claim of bad faith. This indemnification provision is intended to include an indemnification under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. §§ 9600, et seq.

(Ord. 4387, passed 1-24-00)

Violation of any of the terms of this chapter shall be a misdemeanor punishable by a fine of up to $500 or 90 days in jail, or both, not excluding (in addition to) civil damages.

(Ord. 4387, passed 1-24-00)

The rates and charges of a franchisee subject to this chapter shall be subject to regulation by the city to the full extent authorized by federal or state law. The city may from time to time elect not to regulate franchisee's rates and charges, and any such election shall not waive the city's rights to regulate franchisee's rates and charges in the future. Changes to rates and charges shall only be made after notice, hearing and other requirements provided by law.

(Ord. 4387, passed 1-24-00) Penalty, see § 4.06.120

The City Council reserves the right to revoke any franchise granted pursuant to this chapter, and all rights and privileges pertaining thereto, in the event that the franchisee violates any material provision of the franchise agreement, this chapter, the City Charter, the Alhambra Municipal Code or any other federal or state law. The right to revoke any franchise granted pursuant to this chapter is in addition to, and not in lieu of, any other remedies available to the city.

(Ord. 4387, passed 1-24-00)

The annual franchise fee to be paid by the franchisee to the city shall be the greater of:

(A) 5% or more of the franchisee's gross revenue from telecommunications services; or

(B) (1) A fee based on the length of the right-of-way occupied or length of boring drilled expressed in feet multiplied by a base rate of at least $.59 per lineal foot for rights-of-way zero to 20 inches wide and at least $.88 per lineal foot for rights-of-way greater than 20 inches wide plus the height of all above-ground telecommunications equipment expressed in feet multiplied by a base rate of at least $900 per foot, or fraction thereof, for each piece of equipment zero to ten feet in height and at least $1800 per foot, or fraction thereof, for each piece of equipment over ten feet in height. The amount of each annual payment shall be computed and revised each calendar year as follows: the base rate shall be multiplied by the Consumer Price Index for the area, as published by the United States Department of Labor for the month of September immediately preceding the month in which payment is due and payable, and divided by the Consumer Price Index for June 30, 1999, which is declared to be 100.0. If for any reason, this computation is not available, the city shall, in its sole discretion, select a comparable method for adjusting the fee based upon inflation.

(2) Such payments shall be computed from the effective date of the franchise to and including the date of either actual removal of the telecommunications equipment or the effective date of an approved abandonment "in place" authorized by the city. Franchise fees shall be paid quarterly within 60 days after the close of each quarter for which the fees apply. The city shall have the right, but not the obligation, to inspect, at city's expense, franchisee's records to determine franchisee's compliance with this chapter. If any such inspection results in the city's determination that franchisee has underpaid its franchisee fee by more than 5%, then franchisee shall reimburse the city for the city's costs in performing such inspection. Franchise fees impose by this section are in addition to any other fees customarily imposed by the city including, but not limited to, street cut fees and permit fees.

(Ord. 4387, passed 1-24-00)

So far as practicable, all telecommunications equipment shall be located along the edge or shoulders of streets or otherwise located so as to minimize disturbances to the right-of-way. Prior to commencement of work on any right-of-way, a franchisee shall provide the City Engineer with a map depicting the proposed location of any telecommunications equipment and obtain any applicable permits or approvals to commence such proposed work. Franchisees shall also comply with all the provisions of Chapter 13.20, including, but not limited to, the payment of any and all fees, except franchisee shall not be required to pay the plan check fee required therein. Upon completion of its work regarding any portion of right-of-way, franchisee shall restore such right-of-way to the same condition it was prior to such work. The city, in its sole discretion, shall direct the time, place, and manner of installation and maintenance of telecommunications equipment so as to minimize and mitigate any anticipated adverse impacts on the public's use of the public rights-of-way.

(Ord. 4387, passed 1-24-00) Penalty, see § 4.06.120

Prior to commencement of work pursuant to any franchise granted pursuant to this chapter, franchisee shall provide the City Manager with evidence of all construction bonds, performance bonds, insurance coverage, and other such items of a type and amount determined by the City Manager to be necessary to protect the city and other entities that may have use of the subject rights-of-way.

(Ord. 4387, passed 1-24-00)