Isleton Municipal Code Ch. 4.40 Cable Television Franchise

This chapter is enacted under and pursuant to the police powers conferred by article XI, section 7 of the state constitution, sections 53066.1 of the California Government Code, the Federal Cable Communications Policy Act of 1984 (herein "Cable Act") and the rules and regulations of the Federal Communications Commission.

(Ord. No. 286)

For the purposes of this chapter, the following terms, phrases, words, abbreviations, and their derivations shall have the meaning given herein. When not inconsistent with the context, words used in the present tense include the future tense, words in the plural number include the singular number, and words in the singular number include the plural number. The word "shall" is mandatory and the word "may" is permissible.

A. Cable television system means a facility 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 which is provided to multiple subscribers, but does not include those facilities excluded from section 602(6) of the Cable Act. The following terms shall have the same meanings as defined in section 602 of the Cable Act: basic cable service, cable channel, cable service.

B. City means the City of Isleton.

C. City clerk means the Isleton City Clerk.

D. City council means the Isleton City Council.

E. Franchise means and includes any authorization granted hereunder in terms of a franchise, privilege, permit, license or otherwise to construct, operate and maintain a cable television system within the city. Any such authorization, in whatever form granted, shall not mean and include any license or permit required for the privilege of transacting and carrying on a business within the city or to perform work within streets as required by other ordinances and laws of the city.

F. Gross annual revenues means all cash, goods, services, credits, property of any kind or nature, or other consideration received directly by an operator arising from or attributable to the sale or exchange of cable television services by operator with the city or in any way derived from the operation of its system within the city, including, but not limited to, basic service, monthly fees, optional services or pay cable fees, installation and reconnection fees, local advertising revenues, leased channel fees, and converter rentals or sale. Gross annual revenues will also include any of the aforementioned revenues received directly by an affiliate, subsidiary, parent or other entity in which operator has a financial interest, provided that the gross annual revenues of such entities, including operator, will not include revenue which has already been accounted for in calculating gross annual revenues. Gross annual revenues shall not include any taxes on services furnished by operator imposed upon any subscriber or user of the state, city or other governmental unit and collected by operator on behalf of said governmental unit, converted deposits or refunds to subscribers by the operator.

G. Operator means any person who provides cable service over a cable television system pursuant to franchise issued by the city council and directly or indirectly owns a significant interest in such system or who otherwise controls or is responsible for the management and operation of such cable system.

H. Person shall mean any natural person, firm, corporation, association, syndicate, joint stock corporation, partnership, company, governmental entity or other organization of any kind.

I. Streets shall mean the surface of and the space above and below any street, road, highway, freeway, utility right-of-way or any other easement which now or hereafter exists for the provision of public or quasi-public services to residential or other properties, and in which the city is expressly or impliedly authorized or empowered to permit use for installation and operation of a cable television system.

J. Subscriber or user shall mean any person or entity receiving, lawfully and for consideration, any service of the operator's cable television system.

(Ord. No. 286)

No cable television system shall be installed or operated within the city except pursuant to a franchise issued pursuant to this Code.

(Ord. No. 286)

A nonexclusive franchise to install, construct, operate and maintain a cable television system on streets within the city may be granted by the city council to any person who offers to furnish and provide such system under and pursuant to the terms and provisions of this chapter. No provision of this chapter shall be deemed or construed to require that the city council grant any cable television system franchise nor to limit the number of operators to a single person. The city council may limit the franchise to a single operator, if it determines that it is necessary to ensure an economic base for commercial operations sufficient to support the investment necessary to provide the type of service required by this chapter and is in the public interest.

(Ord. No. 286)

Any franchise issued pursuant to this chapter shall:

A. Authorize the utilization of streets for the purpose of installing and operating the cable television system. Such authorization shall not, however, relieve the operator from the requirements of city, now or hereafter imposed, relating to street work, street excavation permits, encroachment permits, undergrounding of utilities (including the cable television system facilities) or the use, removal or relocation of property in streets.

B. Be for a term not to exceed 15 years.

C. Be non-exclusive and neither expressly or impliedly deemed to preclude the issuance of subsequent franchises.

D. Not authorize or permit the operator to install the cable television system upon private property, except with the consent of the owner.

E. Not be deemed to authorize the operator to use poles, wires or channels which are owned by or granted to a public or private utility without the consent of such utility.

(Ord. No. 286)

No application for a cable television system franchise shall be accepted which does not meet the following requirements:

A. Provide capability for relaying to subscriber terminals at least those television and radio broadcast signals, the carriage of which by the grantee is now or hereafter required by the Federal Communications Commission;

B. Distribute in color all television signals which it receives in color; and

C. Have the capacity to receive and distribute signals from satellites; and

D. Have a minimum capacity of 12 satellite channels or such greater number as is specified in the application and resolution granting the franchise; and

E. Provide for construction and installation of the cable television system so as to make service available to all dwelling units located in the city within the time schedules contained in the application and franchise resolution. No discrimination as to the type of service, hook-up fee or monthly service charge shall be permitted based upon the location of such dwelling within the city; and

F. Make available upon request of a subscriber, a key-lock device which prevents unauthorized viewing of certain channels; and

G. Meet such technical standards or guidelines as are established for cable television by the Federal Communications Commission; and

H. Meet any higher standards or additional requirements that may be established by the application and franchise resolution.

(Ord. No. 286)

The requirement of section 612 of the Cable Act shall determine whether the operator is required to designate channel capacity for commercial use by persons unaffiliated with the operator and the number to be designated.

(Ord. No. 286)

The operator shall not deny service or access or otherwise discriminate against employees or subscribers on the basis of race, color, religion, natural origin, sex or age.

(Ord. No. 286)

Each application for a cable television system franchise shall be in writing and shall be filed with the city clerk. The application shall be made upon a form to be provided by the city council and shall contain such information as determined by the city council.

(Ord. No. 286)

Each applicant shall pay a fee which is sufficient to cover the costs of the city of processing, studying and investigating the application and the environmental impact of the issuance of a franchise. In the case of the first application filed under this chapter, the cost of processing shall be deemed to include the preparation of this chapter. The sum of $1,500.00 shall be paid at the time of filing and application. Should the costs exceed the filing fee, the applicant shall pay the difference. Should the filing fee exceed the cost, the difference shall be refunded to the applicant. No portion of the fee shall be refunded because of the withdrawal or denial of the application.

(Ord. No. 286)

The city clerk shall review the application and upon finding that the application complies with the minimum requirements as stated above and is complete, shall report such fact to the city council. The city council shall schedule a hearing on said application at a regular or special meeting called for such purpose and shall cause notice of said hearing to be given by posting in the same manner as city ordinances are posted. Posting shall be completed at least ten days before the hearing. A copy of the notice of the hearing shall be sent to the applicant by registered or certified mail at least 15 days before the hearing or such shorter period as applicant may agree to in writing. Hearings may be conducted on more than one applicant at the same time.

(Ord. No. 286)

At the time set for the hearing and any continuance thereof the city council shall hear all oral and written evidence in support of and/or in opposition to the application. The hearing shall be conducted informally and judicial rules of evidence shall not apply. The city council may require that oral testimony be given under oath. Upon completion of the hearing the city council shall award a franchise to the successful applicant or applicants or reject all applications. In making its determination the city council shall give consideration to the following factors:

A. Experience, character, background and financial responsibility of the applicant.

B. Type and capacity of service proposed.

C. Proposed rates.

D. Technical and performance quality of equipment.

E. Construction schedule.

F. Such other factors as the city council deems pertinent.

Selection of a successful applicant or applicants shall be made by a majority vote of the city council based upon the above factors and such other criteria as the city council in its sole discretion shall determine.

(Ord. No. 286)

The franchise shall be offered to the successful applicant by resolution adopted by the city council. The resolution shall incorporate the terms, conditions and requirements of this chapter and such additional terms, conditions and requirements respecting the franchise which are contained in the application and accepted by the city council. In the event of a conflict between the application and the resolution, the resolution shall control.

The resolution offering a franchise shall not become effective until the successful applicant files with the city clerk a certificate in writing which expressly and unconditionally accepts the franchise upon the terms, conditions and requirements contained in the resolution, this chapter and the following additional requirements.

A. Pays to the city the balance, if any, of the cost of the application pursuant to section 4.40.100.

B. Furnishes proof of insurance pursuant to section 4.40.150.

C. Files a performance bond pursuant to section 4.40.160.

D. Deposits security pursuant to section 4.40.170.

In the event the successful applicant fails to satisfy all the above requirements within one month after the adoption of the resolution, the offer of a franchise contained in the resolution is deemed withdrawn as of the end of said one month period and the resolution shall be deemed revoked.

(Ord. No. 286)

Each operator shall, at its sole expense, fully indemnify, defend and hold harmless the city, its officers, agents and employees from and against any and all claims, suits, actions, liability and judgments for damages or otherwise:

A. For actual or alleged injury to persons or property, including loss of use of property due to an occurrence , whether or not such property is physically damaged or destroyed, in any way arising out of or through or alleged to arise out of or through the acts or omissions of the operator or its officers, agents, employees, or contractors or to which the operator or its officers, agents, employees or contractors acts or omissions in any way contribute:

B. Arising out of or alleged to arise out of any claim for damages for invasion of the right of privacy, defamation of any person, firm or corporation, or the violation or infringement of any copyright, trademark, trade name, service mark or patent, or of any other right of any person, firm or corporation; and

C. Arising out of or alleged to arise out of operator's failure to comply with the provisions of any statute, regulation or ordinance of the United States, state or any local agency applicable to the operator in the operation of the franchise.

Nothing herein shall be deemed to prevent the parties indemnified and held harmless herein from participating in the defense of any litigation by their own counsel at the operator's sole expense. Such participation shall not under any circumstances relieve the operator from its duty of defense against liability or of paying any judgment entered against such party.

(Ord. No. 286)

As a part of the indemnification provided by section 4.40.140 above, but without limiting the foregoing, the operator at the time of accepting the franchise and at all time thereafter shall maintain in full force and effect at its sole expense, an acceptable policy or policies of liability insurance, including comprehensive general liability insurance, products/completed operations liability, personal injury liability, owners' and contractors' protective liability, broad form property damage, contractual liability, automobile liability (owned; non-owned and hired automobiles), worker's compensation and employer liability. The policy or policies shall name the operator, the city and city's officers, employees and agents as co-insureds, and the policy or policies shall contain cross-liability endorsements. The policy or policies of insurance shall be in the minimum single limit amount of $1,000,000.00 per occurrence. The insurance policy or policies shall contain contractual liability insurance naming the franchise, and shall insure against the types of liabilities naming the franchise, and shall insure against the types of liabilities covered by the indemnification and hold harmless provisions of section 4.40.140.

The insurer and the form and substance of the policy or policies of insurance shall also be subject to approval by the city.

The policy or policies of insurance shall be maintained by the operator in full force and effect during the entire term of the franchise. Each policy of insurance shall contain a statement on its face that the insurer will not cancel the policy or fail to renew the policy, whether for non-payment or premium, or otherwise, and whether at the request of the operator or for other reasons, except after 30 calendar days advance written notice mailed by the insurer to the city clerk.

Each insurance policy shall provide that the insurance company waives all right of recovery by way of subrogation against the city and its officers, agents and employees in connection with any damage covered by any policy. The city and its officers, agents and employees shall not be liable to the operator for any damage caused by any of the risks insured against under an insurance policy obtained by the operator.

(Ord. No. 286)

At the time of acceptance of the franchise, the operator shall filed with the city a corporate surety bond in an amount established by the resolution offering the franchise providing that upon the failure of the operator to complete the installation of the cable television system in accordance with the franchise and to repair the streets, there shall be recoverable from the principal and surety, the cost of completing and repairing together with costs and attorney's fees incurred in enforcing such bond. The form of the bond and the surety shall be subject to approval by the city attorney. Upon completion of the installation of the cable television system as determined by the city council the operator shall be released from the requirement to post and maintain said bond.

(Ord. No. 286)

At the time of acceptance of the franchise, the operator shall deliver to the city a certified or cashier's check payable to the city in the amount of $10,000.00. The check shall be cashed and the proceeds retained by the treasurer of the city in a special account. Said sum shall be maintained by the treasurer as security for the faithful performance by the operator of all of the provisions of the franchise, any damages, including, but not limited to, liquidated damages, delinquent franchise fees, compensation and costs of completing of repairing the cable television system, and compensation and costs of removal of abandoned property, and repair of streets, and other public or private improvements incurred as a result of the failure of the operator to comply with the provisions of the franchise. Interest earned upon the sum shall accrue to the credit of the account.

Within ten calendar days after notice is mailed to the operator that any amount has been withdrawn from the special account, the operator shall deposit with the treasurer of the city such sum as may be necessary to restore the account to its required amount, including any interest which may have accrued and been credited to the account.

Upon the termination of the franchise and the payment of any damages which are due, the balance of the security deposit shall be paid to the operator.

(Ord. No. 286)

No part of the cable television system shall be installed upon private property without first securing the written consent of the owner or occupant thereof.

(Ord. No. 286)

In all portions of the city where cables, wires and like facilities of a public utility are placed underground, the operator shall construct and install its cables, wires and other facilities underground. Where existing above ground public utility facilities are required to be placed underground, the operator shall be required to underground its facilities at its expense.

(Ord. No. 286)

No franchise shall be deemed to expressly or impliedly authorize the operator to utilize the poles of a public utility without first securing a permit therefor from the utility, nor to authorize the operator to erect poles or wire holding structures within the street without the written consent of city.

(Ord. No. 286)

Where the relocation of the cable television system facilities is required as the result of performance of work within the streets by city, any other public agency, or a public or private utility, the operator, at its sole expense shall remove and relocate its facilities within such street.

(Ord. No. 286)

The cable television system shall be installed and operated so as not to interfere with radio or television reception of persons not served by the franchise. Nor shall the system interfere with, obstruct or hinder the operation of public and private utilities serving the city.

(Ord. No. 286)

All services shall be available to all subscribers who are willing to pay the charges at the rates established by the operator.

(Ord. No. 286)

No charges shall be made for services except as listed in published schedules which are available for inspection at the office of operator and displayed or communication to all potential subscribers prior to signing a written order for service. No change in rates shall become effective for a period of 30 days after written notification to affected subscribers of the proposed change in rates.

(Ord. No. 286)

Operator shall promptly respond to, investigate and resolve subscriber complaints. Operator shall maintain a local toll-free telephone to receive and record requests for maintenance, repairs and subscriber complaints, seven days a week and 24 hours per day. Necessary maintenance and repairs shall be made expeditiously. No direct charge shall be made to subscribers for maintenance and repair, unless the disruption of service was the result of the subscriber's negligence or abuse. Operator shall maintain a written record or "log" listing the date of subscribers' complaints, the identity of the subscriber, nature of the complaint and when and what action was taken in response thereto. Said record shall be maintained for a period of five years and a copy shall be furnished to city upon written request therefor. No charge shall be made for such copy.

(Ord. No. 286)

The operator shall comply with the provisions of section 631 of the Cable Act concerning the collection, disclosure, access to and destruction of personally identifiable information of subscribers.

(Ord. No. 286)

For the use of the streets and do defray the cost of regulating the franchise, the operator shall pay to the city a franchise fee equal to five percent of the operator's gross annual revenue.

(Ord. No. 286)

Within three months of the end of the initial franchise accounting period as established by the resolution offering franchise and annually thereafter, the operator shall file with the city clerk a written statement signed under penalty of perjury or audited financial statement setting forth the sources and amount of gross revenue received by the operator during the period covered by the statement. At the same time the operator shall pay to the city the franchise fee as determined by said statement.

(Ord. No. 286)

The operator shall make available for inspection by authorized representatives of city, its books, accounts and other financial records at all reasonable times and upon reasonable advance notice.

(Ord. No. 286)

The amount and type of franchise fee established by this chapter is presently limited by section 622 of the Cable Act. Should such limitation be removed or modified, city reserves the right to amend this chapter to increase such fee.

(Ord. No. 286)

During the life of the franchise the right of the operator to obtain modification of franchise requirements for facilities, equipment and services shall be governed by section 625 of the Cable Act.

Neither the franchise nor any interest therein, nor the cable television system or any part thereof, shall be sold, transferred, assigned, mortgaged, pledged, leased, sublet or otherwise encumbered without the written consent of city first had and obtained. The city shall not withhold such consent unreasonably. Any such attempted action in violation of this section shall be void.

(Ord. No. 286)

Except as herein provided, renewals of franchises shall be applied for, heard and acted upon in the same manner as the issuance of the initial franchise. Proceedings for renewal shall be commenced no earlier than 36 months prior to the expiration of the franchise and no later than 30 months prior to the expiration of the franchise. The proceedings shall be conducted at the time and in the manner prescribed by section 626 of the Cable Act.

(Ord. No. 286)

The following violations of the franchise shall be deemed material breaches justifying termination by the city:

A. Unexcused delay of in excess of six months in completing the installation of the cable television system beyond the time prescribed in the resolution offering franchise.

B. Failure to maintain the performance bond, insurance or security deposit as required in sections 4.40.150—4.40.170.

C. Failure to pay the franchise fee or the filing of a false statement of revenue.

D. Assignment or encumbrance of the franchise or the system in violation of section 4.40.320.

E. The willful omission of any fact or the willful misrepresentation of any fact in the application for franchise.

F. Any other or omission by operator which materially violates the terms, conditions and requirements of the franchise and which is not corrected or remedied within 30 days after mailing of written notice of violation.

(Ord. No. 286)

A franchise shall not be terminated until a hearing has been conducted upon the matter. Written notice of the time, date and place of the hearing shall be mailed to the operator not later than 30 calendar days in advance of the date of commencement of the hearing. The notice shall state the reasons for the hearing, describe the basis for termination, and identify the terms, conditions or requirements with respect to which the breach has occurred, if breach is the basis for termination.

The hearing may be conducted either by the city council or, at the sole discretion of the council, by a hearing officer appointed by the council to conduct the hearing. Any such hearing officer shall be an attorney licensed to practice under the laws of the state.

The cost of providing quarters for the hearing and compensation for the hearing officer, if any, and the per diem cost of any reporter retained to record the proceeding shall be borne by the city. The cost of preparing a transcript and record of the hearing shall be borne by the operator. All costs incurred by the parties for attorneys fees, expert witness fees and other expenses shall be borne solely by the party incurring the costs.

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 not be applicable to the hearing.

If the hearing is conducted by a hearing officer, the officers 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, without a hearing, except as otherwise required below either:

A. Adopt the recommended decision, including findings of fact and conclusions submitted by the hearing officer;

B. Adopt the findings of fact and conclusions contained in the recommended decision, modify the decisions, and adopt the recommended decision as so revised; or

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

D. Reject the recommended decision and conduct a new hearing.

If the hearing is conducted by the city council, upon conclusion of the hearing, the city council shall adopt a decision which includes findings of facts and conclusions.

If the decision by the city council is that there are grounds for termination of the franchise and that the franchise should be terminated, the council shall adopt a resolution which terminates the franchise. The effective date of termination shall be such date as is set forth in the resolution. Upon termination of the franchise, the city shall have the right to purchase the property associated with the cable television system for its fair market value as of the effective date of termination. No value shall be assigned to the franchise in determining the fair market value of the property. The right to purchase may be exercised by the city for its ownership and use or by any person to whom the city council may, in its sole discretion, assign the right. Should the city be unable or unwilling to purchase the system, the operator shall remove from the streets all portions of the system which are above ground.

(Ord. No. 286)

At the time of issuance of any franchise under the provisions of this chapter, it will be impractical to reasonably ascertain the total extent of damages which may be incurred as a result of the breach by the operator of its obligations under the franchise. The provisions of section 4.40.370 below, shall apply in the event of breach as liquidated damages therefor. Factors relating to the impracticability of ascertaining damages include, but are not limited to, the following:

A. The fact that the primary damage resulting from breaches by the operator in the schedule for construction will be to members of the public who are denied services and thereby injured in varied and subjective ways, and that termination of a franchise for such breaches is an undesirable remedy because it is highly unlikely that the city council would have or be able obtain sufficient capital to acquire and operate the cable television system and there is a significant risk that it would be unable to find a qualified party to acquire the system and remedy the breach or breaches in a timely manner;

B. The fact that the failure of the operator to timely file reports and pay franchise fees will deny revenue to the city required in order to fund the costs of administering and regulating the franchise and thereby deprive the public of expeditious, effective, and efficient administration and regulation of the franchise in the public interest.

Without the provisions of section 4.40.370 below, the actual damages for which operator would be liable could greatly exceed the specified amount of liquidated damages. Therefore, the provisions of section 4.40.370 below, are of benefit to an operator.

(Ord. No. 286)

In its sole discretion, the city council may assess an operator and the operator shall be liable for liquidated damages in the amount of $100.00 for each calendar day on which a franchisee is in breach of any provision of this chapter. Such damages may be paid from the security deposit made by the operator. Before imposing such damages the city council shall conduct a public hearing at which the operator shall be given an opportunity to show cause why the damages should not be imposed. Written notice of the hearing, containing the grounds for the imposition of damages and the amount therefor, shall be given to the operator at least ten days before the hearing.

(Ord. No. 286)

Nothing in this chapter shall preclude the city from seeking judicial remedies for the violation of the franchise by means of an action for specific performance, injunctive relief, declaratory relief or other legal remedy at law or in equity. In any such proceeding in which the city prevails, it shall be entitled to costs of suit and reasonable attorney's fees.

(Ord. No. 286)