Hillsborough Municipal Code Ch. 4.05 State Video Franchises

This chapter is designed to regulate video service providers holding state video franchises and operating within the town pursuant to that franchise. On January 1, 2007, the State of California became the sole authority with power to grant state video franchises pursuant to the Digital Infrastructure and Video Competition Act of 2006 ("DIVCA"), codified at Public Utilities Code Section 5800 et seq. under the California Public Utilities Commission final rulemaking decision dated March 1, 2007. Pursuant to DIVCA, the Town of Hillsborough shall receive a franchise fee and a fee for public, educational and/or government (PEG) purposes from all state video franchise holders operating within the town. Additionally, the town acquired the responsibility to establish and enforce penalties, consistent with state law, against all state video franchise holders operating within the town for violations of customer service standards pursuant to DIVCA.

(Ord. No. 698, § 2, 2-13-2012)

Any state video franchise holder operating within the boundaries of the town shall pay a fee to the town equal to five percent of the "gross revenue" of that state video franchise holder. Gross revenue, for the purposes of this chapter, shall have the definition set forth in California Public Utilities Code § 5860. The state franchise fee shall be remitted to the applicable local entity quarterly, within forty-five days after the end of the quarter for that calendar quarter. Each payment shall be accompanied by a summary explaining the basis for the calculation of the state franchise fee. If the holder does not pay the franchise fee when due, the holder shall pay a late payment charge at a rate per year equal to the highest prime lending rate equal to ten percent per annum applied to the delinquent amount until paid. If the holder has overpaid the franchise fee, it may deduct the overpayment from its next quarterly payment.

(Ord. No. 698, § 2, 2-13-2012)

(a) Any state video franchise holder operating within the boundaries of the town shall pay a PEG fee to the town or the town's designee for capital support of public, educational, and/or governmental (PEG) purposes that are consistent with state and federal law equal to no more than one percent of gross revenues, as defined by Section 5870(n) of DIVCA.

(b) Upon the expiration of the current local cable franchise, every state franchisee operating within the town shall pay a PEG capital support fee of equal to one percent of gross revenues per subscriber per month. PEG fees shall be remitted in the same manner as franchise fees as provided in Section 4.05.20 above.

(c) Pursuant to Section 5870(1) of the California Public Utilities Code, every state franchisee operating within the boundaries of the town shall be responsible for a pro-rata, per subscriber share of any outstanding capital grant payments.

(Ord. No. 698, § 2, 2-13-2012)

(a) Each holder of a state franchise under DIVCA shall provide two PEG channels.

(b) All state franchisees shall comply with the provisions of DIVCA related to PEG channels. Without limiting the foregoing, the PEG channels shall be carried on the basic service tier. To the extent feasible, the PEG channels shall not be separated numerically from other channels carried of the basic service tier and the channel numbers for the PEG channels shall be the same channel numbers used by the incumbent cable operator as defined in Public Utilities Code Section 5830(i) unless prohibited by federal law and shall provide video and sound quality, recording capability, channel accessibility and location equal to, or substantially equal to, that provided by the incumbent cable providers. After the initial designation of PEG channel numbers, the channel numbers shall not be changes without agreement from the local entity unless the change is required by federal law.

(c) A state franchise holder shall have three months from the date town requests the PEG channels to designate the capacity. However, the three-month period shall be tolled by any period during which the designation or provision of PEG channel capacity is technically infeasible, including any failure or delay of the incumbent cable operator to make adequate interconnection available, as required by DIVCA. Any state franchise holder who believes that the designation or provision of PEG channel capacity is technically infeasible, shall provide to town, in writing, its reasons therefore and its plan for correcting or solving the infeasibility. Town may hold a hearing on the claim of infeasibility and, thereafter, take such action as town deems proper to require the designation and provision of the PEG channels on the state franchise holder's system.

(Ord. No. 698, § 2, 2-13-2012)

Not more than once annually, the city manager or the manager's designee may examine and perform an audit of the business records of a holder of a state video franchise to ensure compliance with Section 5860 of DIVCA.

(Ord. No. 698, § 2, 2-13-2012)

(a) The holder of a state video franchise shall comply with all applicable state and federal customer service and protection standards pertaining to the provision of video service.

(b) The city manager or the manager's designee shall monitor the compliance of state video franchise holders with respect to state and federal customer service and protection standards. The city manager or the manager's designee will provide the state video franchise holder written notice of any material breaches of applicable customer service standards, and will allow the state video franchise holder thirty days from the receipt of the notice to remedy the specified material breach. Material breaches not remedied within the thirty-day time period will be subject to the following penalties to be imposed by the town:

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

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

(3) For a third or further violation of the same nature within twelve months, a fine of up to two thousand five hundred dollars may be imposed for each day the, violation remains in effect, not to exceed seven thousand five hundred dollars for each violation.

(c) A state video franchise holder may appeal a penalty assessed by the city manager to the city council within sixty days of the initial assessment. The city council shall hear all evidence and relevant testimony and may uphold, modify or vacate the penalty. The town council's decision on the imposition of a penalty shall be final.

As used herein, "Material Breach" is defined as set forth in DIVCA as Section 5900.

(Ord. No. 698, § 2, 2-13-2012)

(a) Applicants for state video franchises within the boundaries of the town must concurrently provide complete copies to the town of any application or amendments to applications filed with the California Public Utilities Commission (PUC). One complete copy must be provided to the city manager.

(b) Within thirty days of receipt, the city manager will provide any appropriate comments to the PUC regarding an application or an amendment to an application for a state video franchise.

(Ord. No. 698, § 2, 2-13-2012)

All state video franchisees shall comply with the provisions of Public Utilities Code Section 5885, including but not limited to those provisions that govern the installation, construction and maintenance of its network in the public rights-of-way, the applicability of the California Environmental Quality Act (CEQA) to projects by a state franchisee in the Town of Hillsborough and the approval or denial of applications for encroachment permits under Section 5885(c).

(Ord. No. 698, § 2, 2-13-2012)

The Town of Hillsborough reserves the right to enact an ordinance or to enforce Chapter 4.04 of the Municipal Code to regulate cable television services within the town (including any amendments thereto) should it be determined by state or federal law, regulation or rule, that town may enter into a local franchise with providers of cable television or video services within the town.

(Ord. No. 698, § 2, 2-13-2012)