Fremont Municipal Code Art. II Basic Service Tier Rate Regulations

This article may be referred to and cited as the “Fremont cable communications basic service tier rate regulations ordinance.” (Ord. 2051 § 1, 10-26-93. 1990 Code § 5-9100.)

For the purpose of this article, the following words and phrases shall have the meanings respectively ascribed to them by this section:

“AICPA” means American Institute of Certified Public Accountants.

“Cable Act of 1992” means the Cable Television Consumer Protection and Competition Act of 1992 (47 U.S.C. Sections 521 et seq.).

“Citation” may be cited as the “basic service tier rate regulations.”

“City manager” means the city manager of the city of Fremont or designee thereof.

“Company,” as used herein, means any “franchisee” under the cable communications ordinance, or any other ordinance establishing the procedures and requirements for the operation of cable television franchise.

“Council” means the city council of the city of Fremont.

“Customer,” as used herein, means any person or entity utilizing or desiring to utilize cable television services provided by the company for consideration. “Customer” also means “customer(s)” and/or “subscriber(s)” as those terms are used in the Cable Act of 1992 and the FCC rules and regulations adopted thereunder.

“Effective date” means the date the basic service rate regulations become effective as provided for in 47 CFR Section 76.910.

“FCC” means the Federal Communications Commission. (Ord. 2051 § 1, 10-26-93. 1990 Code § 5-9105.)

(a) Incorporation of the Cable Act of 1992. The council hereby incorporates by reference the provisions of the Cable Act of 1992 as part of these regulations. Amendments to the Cable Act of 1992 made subsequent to the effective date of these regulations shall also be incorporated by reference as part of these regulations without further action on the part of the council.

(b) Incorporation of FCC Rules and Regulations. The council hereby incorporates by reference the FCC rules and regulations implementing the Cable Act of 1992 as part of these regulations, including but not limited to those rules and regulations regarding subscriber rate regulation as set forth in 47 CFR Sections 76.900 through 76.985. Amendments to FCC rules and regulations implementing the Cable Act of 1992 made subsequent to the effective date of these regulations shall also be incorporated by reference as part of these regulations without further action on the part of the council.

(c) Compliance with the Cable Act of 1992 and FCC Rules and Regulations. These regulations shall at all times fully comply with the Cable Act of 1992, as amended, and then-current FCC rules and regulations implementing the Cable Act of 1992. In the event any provision of these regulations shall be invalidated for any reason or cause, any remaining portions shall be deemed severed therefrom and thereupon remain in full force and effect thereafter. (Ord. 2051 § 1, 10-26-93. 1990 Code § 5-9110.)

(a) Materials to Be Submitted by Company to the City Manager. In connection with the submission of a completed FCC Form 393, or such other similar form as may be hereafter utilized by the FCC for the determination of maximum initial permitted rates for regulated cable services and actual cost of regulated equipment, and/or any other materials required by the Cable Act of 1992 and FCC rules and regulations implementing the Cable Act of 1992, the company shall submit therewith to the city manager an unqualified opinion of an independent certified public accounting firm meeting the standards and requirements of subsection (b) of this section (“auditor’s opinion”).

(b) Scheduling of Review by Council. Upon the submission by company of a complete submittal, pursuant to subsection (a) of this section, the city manager shall schedule review of the company’s submittal at the next available meeting of the council; provided, that a complete submittal shall be deemed submitted for the purpose of 47 CFR Section 76.933 on the date such submittal is received by the city manager. In the event there is no available council meeting date within the 30 days of submittal, the city manager is authorized on behalf of the council to toll the 30-day period pursuant to 47 CFR Section 76.933.

(c) Audit Requirements. The auditor’s opinion described in subsection (a) of this section shall be made by an independent certified public accounting firm at the sole cost and expense of the company. The auditor’s opinion shall contain, at a minimum, the following items:

(1) A certification that the data as set forth on FCC Form 393, or such similar form required by the FCC, truly and accurately reflect the actual costs of regulated equipment and other costs reported therein as determined by the auditor in accordance with generally accepted auditing standards, including without limitation AU Sections 801 et seq. of the AICPA Professional Standards, and that the financial information contained therein is reported in compliance with FCC rules and regulations implementing the Cable Act of 1992, including without limitation 47 CFR Sections 76.924 and 76.925;

(2) A detailed explanation of the source data examined, tested and utilized by the auditor in formulating the auditor’s opinion;

(3) A list of documents furnished by the company to the auditor and utilized by the auditor in formulating the auditor’s opinion;

(4) A detailed explanation of the auditing methodology utilized by the auditor in formulating the auditor’s opinion; and

(5) A detailed explanation of the assumptions utilized by the auditor in formulating the auditor’s opinion.

(d) Auditor’s Working Papers. Upon the request of the city manager, the auditor shall provide to the city manager a copy of the audit working papers utilized in formulating the auditor’s opinion described in subsections (a) and (b) of this section within five days of such request. These working papers shall be kept confidential by the city manager and council, pursuant to Cal. Gov’t Code § 6254(n), as records exempt from the disclosure requirements of the Public Records Act.

(e) Submission of Incomplete Form 393 by the Company to the City Manager. In the event the company submits FCC Form 393, or any similar form required by the FCC, to the city manager without attaching the auditor’s opinion described in subsections (a) and (b) of this section, the city manager may in his/her sole discretion deem the company’s Form 393, or any similar form required by the FCC, as incomplete and the city manager shall return such incomplete form to the company within five days of receipt of such form. In the event such form is returned by the city manager to the company, the company shall be deemed as not yet having filed its schedule of rates for the basic service tier and associated regulated equipment as provided by 47 CFR Section 76.930.

(f) Council’s Power to Audit Company. Nothing contained in these regulations shall abrogate the council’s powers under the cable communications ordinance, the cable communications franchise ordinance, or any other ordinance related to the franchising of cable television services to conduct its own audit of the financial records of the company, or to require such audit to be performed.

(g) Comment by Interested Parties. The council shall hold a public hearing providing for the comment of interested parties on any proposed determination or order of the council pursuant to these regulations; provided, that no public hearing shall be required where the proposed action before the council is to receive information and refer to the city manager for further report, or to toll the review period pursuant to 47 CFR Section 76.933, and the council makes no order with regard to the setting of rates, refunds or the imposition of enforcement sanctions on the company. (Ord. 2051 § 1, 10-26-93; amended during 2012 reformat. 1990 Code § 5-9115.)

(a) Refunds to Customers. All refunds owing by company to customers pursuant to 47 CFR Section 76.942 shall be paid by the company to customers by direct payment or credited to the customer’s bill pursuant to 47 CFR Section 76.942(d)(1) or (2) within 90 days from the date of the implementation of a prospective rate reduction pursuant to 47 CFR Section 76.942(c)(1) or (2).

(b) Trust Account. If, after reasonable and diligent efforts to make payments of moneys refundable to customers, the company is unable to effectuate such payments for any reason, the company shall establish a trust account and deposit to it the actual payment of moneys refundable to customers who cannot be located and payment effectuated. Any interest received on such moneys shall be credited to the trust account.

(c) Distribution from Trust Account. Moneys from the trust account shall be used only for improvements to equipment used for the production of public access programming, with such expenditures approved in advance by the city manager. These expenditures are in addition to any which may be required of the company under the terms of any franchise agreement. (Ord. 2051 § 1, 10-26-93. 1990 Code § 5-9120.)

(a) Informal Resolution. In the event that the company shall fail, refuse or neglect to comply fully with the requirements of these regulations, the city manager shall, except in instances in which time is of the essence in obtaining the company’s compliance and/or the city manager determines that such efforts would be futile, attempt informal resolution and rectification of the company’s noncompliance by informal meeting and/or telephone conference between the company and the city manager. Said informal resolution efforts shall be initiated by the city manager’s general statement of the alleged violations under investigation and the general nature of the evidence then known to the city manager. Notwithstanding the foregoing, the nature and extent of evidence which may be presented by the city manager in any subsequent enforcement hearing pursuant to subsection (d) of this section shall not be limited or abridged by reason of the presentment or nonpresentment or recitation or nonrecitation of such evidence in the course of the informal resolution efforts.

(b) Council Preference for Cure. To the extent reasonably consistent with the goal of obtaining compliance with the regulations, it shall be the policy of the council to notify the company of a possible or alleged violation and, if said violation is then curable, allow a reasonable time for the company to cure the possible or alleged violation. If the company does so cure, in the absence of aggravating circumstances, it shall be the preference of the council to abstain from further enforcement action.

(c) Determination of Probable Cause for Enforcement Hearing. In the event that the informal efforts at resolution are ineffective or otherwise inappropriate:

(1) The city manager may notice the company to meet with the city manager on not less than 10 days’ notice to determine whether or not probable cause exists to believe that the company has failed, neglected or refused to comply with the provisions of these regulations; or

(2) In the sole discretion of the city manager, the city manager may notice the company to appear before the council on not less than 10 days’ notice to determine whether or not probable cause exists to believe that the company has failed, neglected or refused to comply with the provisions of these regulations.

In either event, the probable cause determination shall be initiated by the city manager’s general statement of the alleged violations under investigation and the general nature of the evidence then known to the city manager and/or the council. Notwithstanding the foregoing, the nature and extent of evidence which may be presented by the city manager in any subsequent enforcement hearing pursuant to subsection (d) of this section shall not be limited or abridged by reason of the presentment or nonpresentment or recitation or nonrecitation of such evidence in the course of the probable cause determination.

(d) Enforcement Hearing. Upon a determination of the city manager pursuant to subsection (c)(1) of this section, or of the council pursuant to subsection (c)(2) of this section, that probable cause exists to believe that the company has failed, neglected or refused to comply with the provisions of these regulations, the council may hold such hearings, conduct such procedures and impose such remedies as are authorized by these regulations.

(e) Conduct of Enforcement Hearing. The hearing may be conducted either by the council or, at the sole discretion of the council, by a hearing officer appointed by the city manager to conduct the hearing; provided, that, in the event that the cumulative monetary sanction(s) sought for any alleged violation(s) equal or exceed $15,000 in any single proceeding, the company shall have the option to require the hearing be conducted by a hearing officer.

(f) Selection of Hearing Officer. If the matter shall be referred to a hearing officer, the city manager and the company shall each exchange to the other party, not later than 10 business days after said order of referral by the council, the names of three qualified, neutral and unaffiliated potential hearing officers. Thereupon, each party shall have 10 business days to strike two of the other party’s named potential hearing officers and the hearing officer shall be thereafter determined, as between the two remaining names, by lot. Any such hearing officer shall be an attorney licensed to practice under the laws of the state of California. The cost of providing quarters for the hearing, the compensation for the hearing officer, if any, and the per diem cost of any reporter retained to record the proceedings shall be borne equally by the company and the city and the city manager is hereby authorized to withdraw the company’s share of such costs from the company’s security deposit with the city. The costs incurred by the parties for attorneys’ fees, expert witness fees and other expenses shall be borne solely by the party incurring the costs.

(g) Burden of Proof at Enforcement Hearing. At any hearing conducted pursuant to subsection (e) of this section, the city manager shall have the burden of establishing the violation of these regulations to the satisfaction of the council or the hearing officer by a preponderance of the evidence. The company may present such evidence, consistent with subsection (h) of this section, as it may desire.

(h) Conduct of the Enforcement Hearing. All witnesses testifying at the hearing shall be sworn. Witnesses shall be subject to direct and cross-examination. However, formal rules of evidence applicable to the trial of civil or criminal proceedings in the trial courts of this state shall apply to evidence adduced at the hearing only to the extent that such rules are reasonably necessary to the preservation of the probative nature of the evidence proffered. The provisions of the Administrative Procedure Act, commencing at the Cal. Gov’t Code § 11500, or any successor legislative enactment, shall not be applicable to any such hearing. The hearing may be continued from time to time.

(i) Recommended Decision of Hearing Officer. If the hearing is conducted by a hearing officer, the officer shall, upon conclusion of the hearing, prepare a recommended decision which includes findings of fact and conclusions. The recommended decision shall be filed with the city clerk and mailed to the parties not later than 30 calendar days after conclusion of the hearing. Upon receipt of such a recommended decision, the city council may either:

(1) Adopt the recommended decision, including findings of fact and conclusion submitted by the hearing officer;

(2) Adopt the findings of fact and conclusions contained in the recommended decision or modify the decision, and adopt the recommended decision as so revised;

(3) Based upon the record of the hearing, modify the findings of fact, conclusions or decision, and adopt the recommended decision as so revised; or

(4) Reject the recommended decision and conduct a new hearing before a hearing officer provided at city’s expense.

If the council shall act under either subsection (i)(2), (3) or (4) of this section, the council shall set forth clearly its rationale and reasoning for so doing.

(j) Findings by Council. If the hearing is conducted by the council, upon conclusion of the hearing, the council shall adopt a decision which includes findings of fact and conclusions.

(k) Monetary Sanctions as Remedies. Remedies which may be imposed for a violation of an order of the council issued pursuant to these regulations shall include but not be limited to the monetary sanctions established by these regulations and shall be construed as liquidated damages as such are established pursuant to the cable communications franchise ordinance. (Ord. 2051 § 1, 10-26-93. 1990 Code § 5-9125.)

(a) Monetary Sanctions. Monetary sanctions may be imposed by the council upon a finding that the company has not complied with one or more provisions of these regulations. The council may impose monetary sanctions for a violation of an order of the council issued pursuant to these regulations at the conclusion of a noticed hearing pursuant to Section 5.25.230(d) as to each violation so found, not to exceed the amount(s) set forth for the violations of the applicable violation(s) as set forth below.

(b) Conscious Violation. A conscious violation is any failure, neglect or refusal of the company to materially comply with any order issued pursuant to these regulations, under such circumstances as to indicate:

(1) A conscious policy of noncompliance with the requirements thereof; or

(2) A conscious lack of a policy of compliance with the requirements thereof.

A prior finding of a violation under subsection (c) or (d) of this section for substantially the same or similar conduct shall create a rebuttable presumption of conscious action or inaction on the part of the company. For each such violation, the council may impose a monetary sanction in an amount not to exceed $50,000 and in an additional like sum for each month or portion thereof during which the company shall fail, neglect or refuse to rectify said violation beginning 30 days after written notice thereof from the council to the company.

(c) Inadvertent Subscriber Violation. An inadvertent violation is any failure, neglect or refusal of the company to comply with the requirements of an order issued under these regulations as to its obligations hereunder in relation to one or more subscribers, including but not limited to refunding or crediting moneys to subscribers pursuant to Section 5.25.220(a) and/or 47 CFR Section 76.942(d)(1) or (2), under such circumstances as do not indicate a pattern of behavior by the company in derogation of the referenced requirement. For each such violation, the council may impose a monetary sanction:

(1) In an amount not to exceed $100.00 for each such subscriber and $5,000 in cumulation of the violations as to all such subscribers resulting from any substantially continuous behavior, act or omission; and

(2) In an additional like sum for each month or portion thereof during which the company shall fail, neglect or refuse to rectify said violation beginning 30 days after written notice thereof from the council to the company.

(d) Inadvertent Company Violation. An inadvertent company violation is any failure, neglect or refusal of the company to materially comply with the requirements of an order issued under these regulations with respect to the company in relation to the council. For each such violation, the council may impose a monetary sanction in an amount not to exceed $5,000 and in an additional like sum for each month or portion thereof during which the company shall fail, neglect or refuse to rectify said violation beginning 30 days after written notice thereof from the council to the company.

(e) Repeated Violation Enhancements. The maximum amount specified in subsection (b) of this section shall be doubled for the second violation under that subsection for substantially the same or similar conduct occurring within any given 24-month period and shall be quintupled for the third violation under that subsection for substantially the same or similar conduct within any given 24-month period.

(f) Alternative Remedies. Neither monetary sanctions imposed hereunder nor any order issued by the council related hereto shall be deemed to bar or otherwise limit the right of the council to obtain judicial enforcement of the company’s obligations by means of specific performance, injunctive relief, mandate or other remedies at law or in equity, other than monetary damages.

(g) Temporary Stay of Remedies. Application of the remedies provided herein shall be stayed for the period of time during which any order of the council pursuant to these regulations is under appeal by the company to the FCC, pursuant to 47 CFR Section 76.944. (Ord. 2051 § 1, 10-26-93. 1990 Code § 5-9130.)