Mission Viejo Municipal Code Ch. 5.04 Cable Television Systems

This chapter is enacted pursuant to Government Code § 53066, and may be referred to as the Mission Viejo Cable Television Ordinance.

(Ord. No. 88-12, § 4(5-4-1), 6-27-88)

For the purposes of this chapter and the franchises issued pursuant to it, the following terms, phrases, words, abbreviations and their derivations shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning:

Cable television system or CATV system or CATV means and includes any facility that, in whole or in part, receives directly or indirectly over the air and amplifies or otherwise modifies the signals transmitting programs broadcast by one or more television or radio stations and distributes such signals by wire or cable to subscribing members of the public who pay for such service, but such term shall not include any such facility that serves fewer than 50 subscribers, or any such facility that serves only the residents of one or more apartment dwellings under common ownership, control or management, or commercial establishments located on the premises of such an apartment house.

Note: In general, each separate and distinct community or municipal entity (including unincorporated communities within unincorporated areas and single, discrete unincorporated areas) served by cable television facilities constitutes a separate cable television system, even if there is a single headend and identical ownership of facilities extending into several communities.

Any modified definition of a cable television system approved by the Federal Communications Commission (hereinafter "FCC") subsequent to the adoption of this chapter shall immediately apply to all the terms and conditions of this chapter and shall completely supersede all previous definitions for the purpose of interpreting this chapter.

Franchise means and includes any authorization granted pursuant to this chapter in terms of a franchise, privilege, permit or otherwise to construct, operate and maintain a cable television system within all the area of the city described in each franchise issued pursuant to this chapter. Such authorization shall not mean and include any license or permit required for the privilege of transacting and carrying on a business within the city as required by other ordinances and laws of this city.

Franchise property means all real property and all depreciable property including but not limited to towers, antennae, coaxial cables, electrical conductors, conduits, electronic equipment, appurtenances and facilities owned, installed or used within the county by the grantee in the operation and conduct of a cable television system business under the authority of the franchise granted pursuant to this chapter.

Grantee means the person granted a franchise by the city council under this chapter and the employees, agents, lawful successor or permitted assignee of such person.

Gross revenues means any and all compensation received directly or indirectly by the grantee including installation fees; disconnect and reconnect fees; rental fees (including but not limited to deposits accepted by grantee); fees for the transmission of broadcast signals and access and origination channels, if any; per-program or per-channel charges; leased channel revenues; or any other income derived from the system. "Gross revenue" shall exclude all sales taxes and excise taxes payable by the grantee to federal, state or county governments as a direct result of operations under this chapter. Refunds and deposits shall be deducted from current gross revenues upon return.

Public proceedings affording due process means the following: a meeting of the city council held pursuant to Government Code §§ 25080 et seq. and 54950 et seq., at which the grantee shall be given an opportunity to present his position, including any relevant evidence in support thereof, on the issue under consideration by the council. The grantee shall be given written notice of the consideration of the issue and the date of the meeting at which the issue is to be considered at least 30 days in advance of the date of the meeting. A written notice deposited in the United States mail addressed to the grantee, or his assignee, at the address on file shall constitute sufficient notice for any purpose under this chapter.

Regular subscriber service means the simultaneous delivery by grantee to television receivers (or any other suitable type of audio-video communication receivers), of all subscribers of all signals of over-the-air television broadcasters authorized by the FCC to be carried by a cable television system as defined by the FCC and all required access channels including origination programming. It does not apply to specialized programming for which a per-program or per-channel charge is made.

Street includes the whole right-of-way reserved for roadway purposes, the air space above and the area below any public street, and other public right-of-way or public place, including public utility easements.

Subscriber means any person or entity receiving, for any purpose, any service of the grantee's cable television system, including the ultimate recipient of any distribution of grantee's service.

(Ord. No. 88-12, § 4(5-4-2), 6-27-88)

Cross reference— Definitions generally, § 1.01.170.

The city manager shall:

(1) Be responsible for the continuing administration of this division and the franchises issued pursuant to it.

(2) Function as the local point of contact for information regarding CATV, including application procedures.

(3) Pursuant to section 5.04.140 of this chapter, be responsible for the implementation of procedures for the investigation and resolution of CATV consumer complaints, including receiving and acting upon such complaints.

(Ord. No. 88-12, § 4(5-4-3), 6-27-88)

(a) In order for a person to operate a CATV system within the city the person must obtain a franchise pursuant to this chapter.

(b) Franchises will only be granted pursuant to this chapter following a full public proceeding affording due process.

(c) Any franchise granted or extended pursuant to this chapter will be granted or extended only upon satisfaction by the city as to the applicant's legal, technical, character, financial and other qualifications; and upon the adequacy and feasibility of the applicant's construction arrangements having been approved by the city as part of a public proceeding affording due process.

(d) Franchises granted pursuant to this chapter shall include at least the rates and charges a grantee may charge subscribers for CATV services, the franchise fee charged the grantee by the city, and the designated service area for the grantee.

(Ord. No. 88-12, § 4(5-4-4), 6-27-88)

(a) The right, privilege and authorization granted by a franchise issued pursuant to this chapter is to install, construct, operate, maintain, replace and remove amplifiers, wires, cables, poles, conductors, conduits, attachments and other necessary appurtenances, hereinafter called the franchise property, in, along, underneath, above and upon the surface of any and all public streets, ways, easements and places within the area of the city described in the franchise.

(b) Grantee shall construct, operate and maintain the system subject to the supervision of the city and in strict compliance with all laws, ordinances and regulations of the FCC, the city, and any other federal or state regulatory agency having jurisdiction over the grantee's system.

(c) Any amendment to the provisions of this chapter required by modification to the rules of the FCC shall be incorporated into this chapter within one year of the adoption of such modification, or at the time of franchise renewal, whichever comes first.

(d) The provisions of this chapter and all rights, obligations and duties hereunder shall inure to and be binding upon the grantee, its successors and permitted assignees.

(e) The franchise privilege granted pursuant to this chapter shall be nonexclusive and shall not prevent the city from granting or selling another franchise privilege for the same use and purpose within the area to which such franchise and privilege is applicable.

(f) The franchise granted pursuant to this chapter shall not be given any value by any court or other authority, public or private, in any proceeding of any nature or character wherein or whereby the city shall be a party or affected therein or thereby, except as provided in section 5.04.310 of this chapter.

(Ord. No. 88-12, § 4(5-4-5), 6-27-88)

Grantee may provide cable television service to any person whose utilization of such service includes redistribution of the cable television signals to other persons provided that grantee retains the responsibility to ensure that persons redistributing the grantee's cable television signals do so in accordance with the provisions of this chapter and the grantee's franchise including, but not limited to, ensuring that the redistributor does not charge the consumers of the redistributed signals rates greater than those approved in the grantee's franchise. With respect to contracts for the redistribution of cable television signals, in effect before the effective date of the franchise issued pursuant to this chapter to the grantee, the grantee shall not be held responsible for the rates charged by redistributors of the grantee's cable television signals, but, the person providing the redistribution shall charge rates to the consumers of redistribution services no higher than those authorized to the grantee by the city council.

(Ord. No. 88-12, § 4(5-4-6), 6-27-88)

A franchise issued pursuant to this chapter shall take effect 45 days after its issuance, provided that prior to the effective date of the franchise grantee has filed with the city clerk the following:

(1) A written instrument addressed to the city council accepting the franchise and agreeing to comply with all the provisions of this chapter and the franchise issued to the grantee pursuant to this chapter and stating his tax year for the purposes of submitting franchise payments.

(2) A liability insurance policy in accordance with the provisions of section 5.04.280 of this chapter.

(3) Security, in accordance with the provisions of section 5.04.270 of this chapter.

(4) A written statement that the grantee is familiar with the FCC's cable television rules and regulations and agrees to comply with its terms and conditions.

(5) All other documents required by the council as a condition of the granting of the franchise.

If, for any reason, grantee fails to file such documents within 45 days after the award of the franchise, the franchise shall be deemed forfeited.

(Ord. No. 88-12, § 4(5-4-7), 6-27-88)

Copies of all correspondence between the grantee and the FCC will be routinely provided to the city manager. If no correspondence occurred during the calendar year, a statement to that effect is required in January of the following year.

(Ord. No. 88-12, § 4(5-4-8), 6-27-88)

(a) The term of the franchise shall commence with the effective date thereof, and continue and remain in full force and effect for a term of 15 years or until such time as grantee shall surrender or abandon same or the franchise shall be forfeited for noncompliance by the grantee with the terms and conditions of this chapter; or the city shall condemn and take on the power of eminent domain, in accordance with then existing law, all franchise property of grantee.

(b) During the 14th year, but no later than the first day of the 15th year of the term of the franchise, or of any subsequently renewed franchise, the grantee may make application for a new 15-year franchise to begin at the expiration of the franchise, or of any subsequently renewed franchise. Such application shall not be construed as an option in favor of grantee. Renewal shall not be unreasonably denied. Should the city, for any reason, be unable to complete the renewal proceeding prior to expiration of this franchise, grantee shall have the right to continue operation of the CATV system pursuant to the terms of the franchise until such time as the renewal proceeding is concluded.

(c) A renewal of an existing franchise will be granted only after a full public proceeding affording due process has been held to review the performance of the grantee, the adequacy of the franchise and its consistency with applicable rules.

(d) Failure of the grantee to apply for a new franchise pursuant to the provisions hereinabove shall be construed to mean that the grantee intends to dispose of its franchise property at the termination of the franchise term in accordance with the provisions of this chapter.

(Ord. No. 88-12, § 4(5-4-9), 6-27-88)

The terms and conditions of the franchise, or any of them, including customer rates and charges, and/or fees due to the city from the grantee of the franchise, may at any time during the life of the franchise be amended or modified at a public proceeding affording due process by the city council provided that such amendment or modification is consistent with the rules and regulations of the FCC and provided the same does not materially alter the content of the franchise.

(Ord. No. 88-12, § 4(5-4-10), 6-27-88)

(a) The franchises granted by the city pursuant to this chapter are nonexclusive and authorize the grantee to construct, operate and maintain a CATV system only within the discrete area of the city particularly described in the franchises. Additions or deletions to the designated service area will be made only upon the prior authorization of the city council.

(b) The grantee is required to construct, operate and maintain a CATV system within the entire designated service area as provided in section 5.04.120 unless the council approves, as part of the franchise, a policy of construction which requires less than the complete wiring of the designated service area and provided that such policy shall be adopted only after a full public proceeding which includes specific notice of the consideration of such a policy.

(Ord. No. 88-12, § 4(5-4-11), 6-27-88)

(a) Within one year after the effective date of the franchise, the grantee shall accomplish significant construction, including an operable headend, and shall, thereafter, equitably and reasonably, make cable service available to 20 percent of the service area each year.

(b) The grantee shall furnish the city manager with progress reports and maps indicating, in detail, the location of existing construction of the system. Such periodic reports and maps shall be furnished at six-month intervals, beginning with the effective date of the franchise.

(c) Upon reasonable request for regular subscriber service by any person residing within grantee's designated service area, grantee shall promptly furnish the requested service to such person; provided, however, if the grantee can show that the provision of such service is impractical or would impose an undue hardship, the council may waive or defer grantee's obligation to provide service to such person's premises. The grantee must petition the council to grant such waiver or deferment within 30 days of receiving the request for regular subscriber service. Subscriber agreements must be offered and agreed to in writing.

(Ord. No. 88-12, § 4(5-4-12), 6-27-88)

(a) The grantee shall provide installation and regular subscriber service at no more than the maximum rates shown in the franchise granted pursuant to this chapter. The rates granted shall be nondiscriminatory and fair to both the public and the grantee. No increase in these rates will be made except as authorized by the city council after a full public proceeding affording due process.

(b) The council shall take action to approve or deny all requests for rate increases within 120 days from the date grantee's application, together with all necessary information, is submitted to the council. If the council does not take such action within the time specified, the grantee's application shall be deemed to be denied.

(c) After the council has determined the time, place and manner of the public proceeding to hear requests for rate increases, the grantee shall provide notice of the time, place and manner of such hearing in writing to each subscriber directly affected at least 15 days prior, but not more than 45 days prior, to the date scheduled for such hearing.

(d) The grantee shall construct, maintain and operate a CATV system, and shall render such service to subscribers, which shall at all times be in compliance with the current and latest standards of technical quality and performance and shall comply with all other applicable orders and regulations issued by the FCC.

(e) Grantee shall not engage in the business of selling, leasing, renting, installing, repairing or servicing television receiving sets nor impose a fee or charge for any service or repairs to subscriber-owned receiving devices except for the connection of its service; and grantee shall not solicit, refer, or permit the solicitation or referral of any subscriber to persons engaged in the repair or service of television receivers; and grantee shall not allow any of its officers, employees or principal stockholders to engage in any such business. The foregoing does not include set-top converters or any other cable operator devices installed.

(f) Grantee shall notify the city manager in writing whenever he shall provide any nonregular subscriber service; such notification shall include the charges imposed by grantee for such service.

(g) Designated service area responsibilities shall not be modified or preempted by any other agreement or franchise with any other city agency or commission.

(h) Grantee shall at all times, during the term of the franchise, keep on file with the city clerk a correct mailing address for purposes of the notices required to be made herein.

(Ord. No. 88-12, § 4(5-4-13), 6-27-88)

(a) The grantee shall maintain an office within the city which shall be open during all normal business hours, with a toll-free telephone number listed in the directories of the telephone company serving the city and shall be so operated that complaints and requests for repairs may be received at any time of day or night, seven days a week.

(b) The following procedures shall govern the investigation and resolution of complaints:

(1) Grantee shall maintain a written record or log of all subscriber complaints received by the grantee's designated service office listing the date and time of subscriber complaint, identifying the complainant by name and address, describing the nature of the complaint, and recording when and what action was taken by grantee to resolve the complaint, except complaints regarding substantial system failure.

(2) Grantee shall maintain a separate record of substantial system failures showing the date and time of such failure, describing the nature of the failure and recording when and what action was taken to resolve the failure.

(3) Such records shall show the disposition of the complaints or substantial system failure and shall be maintained by the grantee for a period of three years from the date of notice to grantee of the subscriber complaint or of the substantial system failure. A copy of the subscriber complaint record or substantial system failure record shall be submitted by grantee to the city within ten days following receipt of a written request by the city manager.

(4) If complaints and/or notices of purported franchise violations are received by the city, the city shall notify grantee of such complaints or purported violations and grantee shall notify the city as to the disposition of such matters within ten working days after receipt of notice. The city may, at its option, require that such notice of disposition of complaints be made in writing.

(5) Grantee's records of complaints and substantial system failures shall be open to inspection by the city during normal working hours.

(6) The grantee's resolution of complaints or franchise violations may be appealed to the city. In any case where an appeal is made, the city manager or his authorized designee shall give notice to the grantee setting forth the nature of the complaint and the right of the grantee to be present at a hearing, at its option, and introduce such relevant evidence on the issues as it desires. The notice shall also set forth the time and place of the hearing and that such hearing shall be before the city manager or his authorized designee. At the time and place so specified, evidence shall be submitted as to the facts of any complaint and the city manager or his authorized designee shall determine whether the facts so substantiate the complaint.

a. Order, finality, appeal. At the hearing and upon the determination of the existence of a complaint or franchise violation, the city manager or his authorized designee shall direct the grantee to cure or resolve the complaint or violation. The city manager or his authorized designee may also levy a penalty of up to $200.00 for any occurrence giving rise to the unresolved complaint or $500.00 for any franchise violation. The determination made at the hearing shall be in writing and transmitted to the grantee within a reasonable time; the determination shall become final within ten days, excluding Saturdays, Sundays and holidays, from the time it is transmitted to the grantee. The grantee may, at any time prior to the determination becoming final, appeal the determination of the city manager to the city council who shall fix a time and place therefor and hold a hearing, and shall thereupon make a determination and order affirming, reversing, or modifying the determination and order of the city manager or his authorized designee. The order of the council shall be immediately final.

(7) The grantee shall establish an escrow account with a bank or banks or other institution in the service area, for escrowing the disputed portion of the individual subscriber's monthly service payments during pendency of any dispute. Service disconnection to the complaining subscriber during pendency of the dispute is prohibited if the monies are paid into such escrow accounts; however, nothing stated herein shall prevent the subscriber from proceeding with his complaint if he fails to pay into the escrow account. The escrow account instructions shall include the following:

a. The city shall be provided with a list of disputants and disputed amounts, monthly.

b. The city shall authorize all payments from the account, on a monthly basis.

Any disputes not settled within 60 days shall be presented to the city for an informal hearing, in accordance with subsection (6) of the complaint procedures.

(8) When there exists evidence which, in the reasonable judgment of the city, casts doubt on the reliability or quality of cable service, the city shall have the right and authority to compel the grantee to test, analyze, and report on the performance of that part of the system involved in the problem. Such test or tests shall be made and the reports of such test or tests shall be delivered to the city no later than 14 days after the city formally notifies the grantee. Such report shall include the following information: The nature of the complaint which precipitated the special test; what system component was tested; the equipment used and procedures employed in such testing; the results of such test; and the method in which such complaints were resolved. Any other information pertinent to the special test shall also be recorded.

The city's right under this section shall be limited to requiring tests, analyses and reports covering specific subjects and characteristics based on such complaints or other evidence when and under such circumstances as the city has reasonable grounds to believe that the complaints or other evidence required that tests be performed to protect the public against substandard cable service.

(c) The grantee shall provide notice of the procedures for reporting and resolving complaints to each subscriber at the time of initial subscription to the cable system and to each current subscriber at least once every 12 months.

(1) Such notice shall be to the satisfaction of the city manager, and shall include at least the following information:

a. The address of the franchisee's local city business office, its tollfree telephone number, and any other (tollfree) number used to take complaints and requests for service at any time, day or night, seven days a week.

b. A statement that complaints and inquiries will be investigated and acted upon as promptly as possible, but at least within 24 hours of their receipt.

c. A statement that should city subscribers believe they have been dealt with unfairly or inadequately, that they should contact the city office responsible for administering the cable television franchises. Such notice shall include the contact person, his address and phone number.

d. That these procedures were developed in accordance with this section.

e. State on or about when, during the year, subscribers can expect to receive this information.

(2) Any cable company deregulating under Government Code § 53066.1 must comply with the notification requirements contained therein; namely to provide written notice to each subscriber at intervals of not more than one year, of the sanctions provided in this section, and of the procedure for reporting and resolving subscriber complaints, including the subscriber's right to complain in writing to the franchisor of the franchisee's failure to resolve a service complaint which is preventable and reasonably within the franchisee's control. The proper address of the franchisor or licensor to which complaints may be directed shall be included in such notice.

(3) A copy of any subscriber notice must be sent to the city manager at the time it is distributed to subscribers.

(d) Failure by the grantee to comply with the procedures for the investigation and resolution of complaints shall be grounds for default and forfeiture of the franchise in accordance with section 5.04.308 and/or the security required by section 5.04.270.

(Ord. No. 88-12, § 4(5-4-14), 6-27-88)

The following remedies and penalties for inadequate or untimely service to subscribers or system installation delays are hereby established:

(1) If its service to any subscriber is interrupted for four consecutive hours or for a total of 24 hours within any 30-day period, except for acts of God, or other acts beyond the grantee's control, and except in circumstances for which approval of the interruption is obtained by the city, grantee shall provide a ten percent rebate of the monthly fees to paying subscribers. For purposes of accumulating hours of service interruption, in situations where outages are caused by acts of God or by acts beyond the grantee's control, service interruptions begin one hour after the cause of the interruption has been removed or otherwise corrected except that the time between midnight and 8:00 a.m. will not count for purposes of accumulating hours of service interruption.

(2) If its service to any subscriber is interrupted for 48 or more consecutive hours, except for acts of God, or other acts beyond the grantee's control, and except in circumstances for which prior approval of the interruption is obtained from the city, grantee shall provide a 20-percent rebate of the monthly fees to affected subscribers.

(3) If the system fails to meet any performance standards for a full three-month period, grantee shall reduce all subscribers' fees by 25 percent until all performance standards are met. The city shall notify the grantee during the first month of the three-month period that the system has failed to meet performance standards.

(Ord. No. 88-12, § 4(5-4-15), 6-27-88)

(a) The grantee shall provide, at its own expense upon request of the city manager, and at no cost to the city, one cable installation of up to 150 feet whenever the cable plant passes the property line of any city facility such as law enforcement facilities, fire stations, public libraries and other city facilities, and of any public school or educational administrative sites. Charges for cable installation in excess of 150 feet shall be negotiated between the grantee and the city or the appropriate public school district; however, such charges are not to exceed the actual cost of construction.

(b) Grantee shall not charge the city or public schools any fee for providing the distribution of visual images or audio signals to any of the buildings so connected. All connections herein prescribed shall provide access to all regular subscriber service signals transmitted by the grantee's CATV.

(Ord. No. 88-12, § 4(5-4-16), 6-27-88)

Upon the effective date of the franchise, the grantee shall install no CATV system component, whether as part of a new CATV system, as an extension of an existing system, or as a replacement for an existing system, unless such component has a bidirection interconnect capability. Whenever adjacent systems have full bidirectional interconnect capability, the city reserves the right to require such systems to be interconnected provided that the city has first consulted with the grantee and provided that such interconnection is financially and technically feasible.

(Ord. No. 88-12, § 4(5-4-17), 6-27-88)

The grantee shall make available to the subscriber and, upon request of any subscriber, shall install at a reasonable charge a switch device which will permit the subscriber to switch from the cable to an existing antenna system.

(Ord. No. 88-12, § 4(5-4-18), 6-27-88)

(a) In consideration of the costs which must be incurred by the city in regulating CATV systems, and in consideration of the granting and exercise of the franchise as herein defined and for the use of public rights-of-way for the purpose of constructing and operating a CATV system, grantee shall pay annually to the city during the life of the franchise an amount based upon a percentage of the gross revenues of the grantee arising from the use, operation or possession of the franchise, such percentage to be fixed by the city council as part of the franchise. Checks for all payments shall be made payable to the city and shall be submitted to the city treasurer.

(b) When the amount of the grantee's gross revenues is less than $500,000.00 annually, payment shall be submitted to the city treasurer within 60 days after the expiration of the fiscal year, which shall be the same as the tax year of the grantee. Franchise fees remitted and actually received by the city treasurer on or before the last day of the 60-day period following each fiscal year shall be deemed timely remitted. The first year's payment may be for a partial year to coincide with the grantee's tax year.

(c) When the amount of the grantee's gross revenues is equal to or exceeds $500,000.00 annually, payment shall be submitted to the city treasurer within 30 days after the expiration of each quarter. Franchise fees remitted and actually received by the city treasurer on or before the last day of the 30-day period following each quarter shall be deemed timely remitted.

(d) Franchise fees remitted by mail shall be deemed timely filed only if the envelope enclosing the franchise fee is addressed to the city treasurer and bears a postmark on or prior to due date as hereinabove provided.

(e) Each payment shall be accompanied by a statement, verified by the oath of the grantee or by the oath of the duly authorized representative of the grantee, showing in detail business transactions from the use, operation and possession of the franchise. A copy of the verified statement shall be submitted to the city treasurer and the city manager.

(f) When the amount of the grantee's annual gross revenues exceeds $500,000.00, grantee shall, within 60 days after fiscal year end, send to the city treasurer a statement certified as to accuracy by a certified public accountant listing total gross revenues for the fiscal year. The statement is to reflect business transactions from use, operation, or possession of this franchise.

(g) If any payment specified in this section is not paid to the city within ten days after due date, a late charge of one percent of the payment due and unpaid plus $25.00 shall be added to the payment and the total shall become immediately due and payable to the city. An additional charge of one percent of the payment, excluding late charges, shall be added for each additional month that such payment remains unpaid.

(h) Grantee shall provide, on request, such additional data as may be required in the opinion of the city treasurer to substantiate or verify the calculation of the franchise payment.

(i) Grantee shall keep and preserve, for a period of three years, all the records necessary to determine the amount of such franchise fee including, but not limited to, all business records, bank statements and copies of federal and state income tax returns filed by the grantee and shall make such records available to the city for audit upon reasonable request. In the event an audit is performed and additional fees in excess of five percent of those paid are due, the grantee shall pay the cost of the audit, as determined by the city treasurer as well as the additional fee due.

(j) The following fees are established for the granting, renewal, extension or assignment of a franchise:

(1) Franchise area containing 500 homes or less .....$ 500.00

(2) Franchise area containing 501 homes to 1,000 homes .....1,000.00

(3) Franchise area containing 1,001 homes to 5,000 homes .....3,000.00

(4) Franchise area containing more than 5,000 homes .....5,000.00

(Ord. No. 88-12, § 4(5-4-19), 6-27-88)

(a) The city reserves to itself every right and power the exercise of which is required by any city ordinance including this chapter, and grantee by its acceptance of a franchise agrees to be bound thereby and to comply with any action or requirement of the city in its exercise of any such right or power.

(b) The city shall have all rights which are necessary and convenient in the exercise of its jurisdiction under this division and may determine any question of fact which may arise concerning any franchise issued pursuant to this chapter. The city council shall have full authority and power to adjust, settle or compromise any controversy or charge arising from the operations of a grantee under this division and the franchise issued pursuant to it provided that grantee has received a full hearing at a public proceeding affording due process.

(c) The city shall have the right to inspect, during normal working hours, grantee's facilities and records relating to the franchise. If any records are not made available to the city upon reasonable request, all travel and maintenance expenses necessarily incurred by the city in the examination of such records shall be paid by the grantee.

(d) The city shall have the right, after a hearing affording due process to the grantee, to waive any provision of this chapter, except those required by federal or state regulation, if the city council determines that it is in the public interest to do so or that the enforcement of such provision will impose any undue hardship on the grantee or the subscribers.

(Ord. No. 88-12, § 4(5-4-20), 6-27-88)

(a) Within six months from the effective date of the franchise the grantee shall submit to the city manager a plan of his designated service areas within the city indicating the date grantee expects installation of the total system will be completed, and the dates when individual segments of his service area will be completed and available for service to subscribers. The grantee shall maintain as-built maps of the system. The as-built maps shall be updated on the completion of any system changes, extensions or deletions and, along with detailed technical specifications, be made locally available for review upon the request of the city manager. At any time after the required submittal of the plan of his designated service area within the city, grantee shall furnish upon request of the city manager, maps indicating in detail the location of current construction and reconstruction of the systems and written progress reports commenting on the present status and anticipated schedule of the completion of the work in each area.

(b) All franchise property to be constructed and operated under this chapter shall be:

(1) In compliance with the requirements of this Code and all ordinances of the city heretofore or hereafter adopted and of any permits issued pursuant thereto; and

(2) In conformity with plans and specifications approved by and to the satisfaction of the appropriate city department.

(c) No poles shall be erected or maintained in any public highway or street in which there then exists or is being erected a pole line of any public utility and which pole line is reasonably available to the grantee for use pursuant to a pole rental agreement.

(d) The city may, at its sole option, apply any or all of the following in connection with delays in system construction:

(1) Reduction in the term of the franchise or agreement on a month-for-month basis for each month of delay deemed within grantee's control exceeding the construction schedule approved by the city council by more than three months.

(2) Revocation of the franchise or agreement for delays exceeding six months. If franchise is revoked or agreement is terminated, grantee forfeits security required by section 5.04.270.

(Ord. No. 88-12, § 4(5-4-21), 6-27-88)

(a) Performance of all work within the dedicated rights-of-way of any and all public highways, streets, alleys and roads shall be:

(1) In compliance with the requirements of this Code and all ordinances of the city heretofore or hereafter adopted, and of any permits issued pursuant thereto; and

(2) In conformity with plans and specifications approved by and to the satisfaction of the city manager.

(b) Any cable or conduit laid, located or maintained pursuant to the franchise shall be so placed as not to interfere with the use of the public streets and highways by the traveling public or for any other public purposes to any greater extent than is reasonably necessary, and, except where necessary to cross the roadway, shall be placed outside of the road bed of dedicated public streets as near to the right-of-way line as possible so as not to interfere with road maintenance operations or with other underground facilities.

(c) In laying, repairing or maintaining the cable or conduit, the grantee of the franchise shall fill and compact all trenches and restore the surface of the streets, highways and private driveways and other surfaces in accordance with the Code sections governing such work.

(d) Any damage done directly or indirectly to any public street, highway, alley or public improvement by the grantee, in exercising directly or indirectly any right, power or privilege under the franchise, or in performing any duty under or pursuant to the provisions of this division, shall be promptly repaired by the grantee, at its sole cost and expense, to the complete satisfaction of the city. The grantee shall repair any such damage within ten days after service of a written notice upon the grantee to make any such repairs. If the grantee fails to comply with the written notice to repair them, the city manager may immediately do whatever work is necessary to carry out the instructions at the cost and expense of the grantee, which cost by the acceptance of the franchise, the grantee shall pay upon demand.

(Ord. No. 88-12, § 4(5-4-22), 6-27-88)

(a) The city reserves the rights to improve any highway, street, alley, or other public places, or any portions thereof, over and within which the franchise is granted including the widening, change of grade, change of alignment, construction or reconstruction of such highway, street, or alley, or any portion thereof; and, there is further reserved to the city the right to construct, reconstruct, install, repair and maintain in any such highway, street, alley or other public places, or any portions thereof, any public works.

(b) If notice in writing is given to the grantee 30 days in advance of the fact that work on a governmental use of the streets is to be done pursuant to any right reserved above in this section, specifying the general nature of the work and the area in which same is to be performed, then the grantee shall do all things necessary to protect franchise property during the progress of such work and, if ordered by the city manager, the grantee shall relocate its franchise property within the highway, street, or alley to such extent, in such manner and for such period as shall be necessary to permit the performance of such work in accordance with the generally recognized engineering and construction methods and to permit the maintenance, operation and use of such public improvement, highway, street, or alley so improved. All of such things to be done and work to be performed by the grantee shall be at the sole cost and expense of the grantee except, however, payment of the cost of any relocation made necessary by such construction, reconstruction, change of grade or alignment, shall not apply to any freeway construction by the state.

(c) Cable must be installed underground in any area in which public utility lines are underground or in any area where an underground district has been formed. The grantee is reserved the right granted it under Streets and Highways Code §§ 5132, 5896.1—5896.17, 10102.1 and 10200, as amended, with regard to rights on conversions of existing overhead facilities to underground locations.

(d) If the city shall hereafter construct, install, reconstruct or repair any bridge or artificial support in or underlying any highway, street, or alley in which the grantee's franchise property is located, and if the cost of such work as may reasonably be required is increased in order to provide for the installation, maintenance or operations of grantee's franchise property in or on the area covered by or underlaid by the bridge or other artificial support, then the grantee shall pay to the city or district doing such work the full amount of such increase of cost, upon completion of such construction, installation or repair, provided that the grantee shall have been first provided the opportunity to do such work as may be required on the grantee's own equipment.

(Ord. No. 88-12, § 4(5-4-23), 6-27-88)

(a) The franchise granted by this chapter is a privilege to be held in personal trust by grantee and cannot in any event be sold, transferred, leased, assigned or disposed of, in whole or in part, by ordinary sale, or otherwise, without the prior consent of the city council.

(b) Grantee shall disclose the names and addresses of any parent or subsidiary of grantee or any other business entity controlling grantee in whole or in part or owned or controlled in whole or in part by grantee.

(c) The council shall approve, at a public proceeding affording due process, the sale, transfer, lease or assignation of the franchise provided that the applicant meets the criteria established by this chapter and provided that a duly executed instrument in writing is filed in the offices of the city clerk.

(Ord. No. 88-12, § 4(5-4-24), 6-27-88)

Whenever any portion of the territory covered by the franchise shall be annexed to, or otherwise become a part of any municipal corporation, or of any other county, or of any other political subdivision of the state, the rights reserved under this chapter to the city, or to any officer thereof, shall inure to the benefit of such municipal corporation or county, and its appropriate officers.

(Ord. No. 88-12, § 4(5-4-25), 6-27-88)

(a) If the use of any franchise property is discontinued for any reason other than expiration, cancellation or forfeiture of the franchise, for a continuous period of 12 months or if franchise property has been installed in any street or other dedicated public right-of-way without complying with the requirements of section 5.04.220 of this chapter, grantee, at its expense, shall remove promptly from the street all franchise property other than any which the city manager may permit to be abandoned in place. In the event of any such removal, grantee shall promptly restore to a condition satisfactory to the city manager the street or other dedicated public rights-of-way or other public places in the city from which the franchise property has been removed.

(b) Franchise property to be abandoned in place shall be abandoned in the manner prescribed by the city manager. Upon permanent abandonment of any franchise property in place, grantee shall submit to the city clerk an instrument, satisfactory in form to the city attorney transferring to city the ownership of the franchise property abandoned.

(Ord. No. 88-12, § 4(5-4-26), 6-27-88)

(a) For any franchise issued pursuant to this chapter grantee shall furnish and thereafter, at all times during the life of the franchise, keep a faithful performance bond, or letter of credit to the city, or to its lawful successors in interest by virtue of future incorporations or annexations, in the sum of $50,000.00; and shall further furnish, and keep at all times during the life of the franchise a letter of credit, or time certificate of deposit, with the city as beneficiary, and the depositor retaining rights to all interest, to the city, or to its lawful successors in interest by virtue of future incorporations or annexations, in the sum of $10,000.00. All bonds, letters of credit, or time certificates of deposit shall be secured and obtained from surety companies and/or banks or other financial institutions satisfactory to the city. All security provided under this section shall be conditioned upon the grantee observing, fulfilling, and performing each condition of the franchise and of this chapter, including, but not limited to, compliance with all orders, permits and directions of any agency of the city having jurisdiction over the grantee's performance under the franchise; and payment of monetary penalties assessed against grantee due to default or violation of franchise requirements; and payment to the city of any fees or money due under the terms of the franchise; and the payment by the grantee of any claims, liens and taxes due the city which arise by reason of the construction, operation or maintenance of the franchise.

(b) Neither the provisions of this section, nor the provisions of any security accepted by the city pursuant thereto, nor any damages recovered by the city thereunder shall be construed to excuse faithful performances by grantee or to limit the liability of grantee under this chapter or for damages, either to the full amount of the bond or otherwise. The rights reserved to the city with respect to the security are in addition to all other rights of the city whether reserved by this contract or authorized by law and no action, proceedings, or exercise of a right with respect to such security shall affect any other rights the city may have.

(c) At all times during the life of the franchise, the grantee shall furnish and keep all bonds, letters of credit and time certificates of deposit in the amount stated in subsection (a) hereinabove.

(d) If the security is not furnished prior to the effective date of the franchise, the award of the franchise may be rescinded at any time prior to the security being furnished and any money paid in consideration for such award shall be deemed forfeited.

(Ord. No. 88-12, § 4(5-4-27), 6-27-88)

Grantee shall file with the city clerk prior to the effective date of the franchise and thereafter maintain throughout the term of the franchise a liability insurance policy approved by the city attorney and issued by a company duly authorized to do business in the state, or a certificate of such insurance, insuring the city and the grantee with respect to the installation, operation and maintenance of the cable television system hereunder. The policy insurance shall have minimum liability limits of $250,000.00 for personal injury or death of any one person and $500,000.00 for damages to property resulting from any one occurrence. The policy shall have a noncancellation without 30 days' notice to the city clause and shall provide that copies of cancellation notices shall be sent to the clerk.

(Ord. No. 88-12, § 4(5-4-28), 6-27-88)

(a) Grantee shall indemnify and hold harmless the city from any liability claims, damages, costs, or expenses including reasonable attorney's fees, and including damages arising out of copyright infringements, arising from injury to persons, or damages to property proximately caused by any conduct undertaken by grantee, its agents or employees, by reason of the franchise; grantee shall at his sole risk and expense, upon demand of the city, appear in and defend any and all suits, actions, or other legal proceedings, whether judicial, quasi-judicial, administrative, legislative, or otherwise, brought or instituted or had by third persons or duly constituted authorities, against or affecting the city, its officers, boards, commissions, agents, or employees, and arising out of or pertaining to the exercise of rights arising under the franchise.

(b) Grantee shall pay and satisfy, or shall cause to be paid and satisfied, any judgment, decrees, order, or demand granted or issued against grantee or the city, its officers, boards, commissions, agents or employees in any of these premises; and such indemnity shall continue to exist without reference to or limitation by the amount of any security, policy of insurance, deposit, or other guarantee or assurance required hereunder or otherwise; provided that neither grantee nor the city shall make any compromise or settlement of any claim, demand or cause of action or other proceeding, without first obtaining the written consent of the other.

(Ord. No. 88-12, § 4(5-4-29), 6-27-88)

(a) The city council shall have the power at any time during the life of the franchise to declare the franchise forfeited, null and void for breach of any one or more of the terms, conditions, requirements, obligations, limitations or provisions under which the franchise is awarded. Grantee shall have the right to due process including reasonable notice and a full public hearing before such board whenever forfeiture under this subsection is declared.

(b) Upon declaration of forfeiture, all rights and privileges accruing to grantee by virtue of the franchise shall at that moment be terminated and grantee shall cease all construction under such franchise and shall, within 30 days after such declaration of forfeiture, conclude all operations and business under the franchise.

(Ord. No. 88-12, § 4(5-4-30), 6-27-88)

(a) Upon termination or forfeiture of the franchise, the city shall have the option to purchase all or part of the franchise property in accordance with subsections (b) and (c) of this section and the city may direct grantee to cease operation of the system. Upon notice of the city's intent to purchase the franchise property as herein provided, grantee shall execute all appropriate documents to transfer title to the city and shall assign all other contracts, leases, licenses, permits, franchises and other rights necessary to maintain continuity of service to the subscriber. Grantee shall cooperate with the city, or with any other person authorized or directed by the city to operate the system for a reasonable interim period while transfer of the system is being arranged. The net earnings or losses during this period are the responsibility of the city and the grantee shall maintain such accounting records as are necessary to report such earnings or losses. These records are subject to audit by the city treasurer. The city's right to purchase the franchise property hereunder shall not be construed as a waiver of any other rights the city may have.

(b) If the franchise is terminated by expiration of its term or by mutual agreement of the city and grantee, the purchase price to the city of all or any part of the franchise property shall be the fair market value of the property as agreed upon by the city and grantee. If no such agreement can be reached as to such purchase price, the matter shall be referred to arbitration pursuant to subsection (d) of this section. The city may, within two years prior to the expiration of the term of the franchise, demand an arbitration pursuant to subsection (d) of this section for the purpose of determining the fair market value on the date of expiration to be paid by the city if the city elects to purchase any or all of the franchise property.

(c) In the event of cancellation or forfeiture of this franchise by reason of grantee's default, the purchase price to the city of all or any part of the franchise property shall be the depreciated original cost with no value assigned to the franchise as determined by agreement of the grantee and the city. If such agreement cannot be reached, the matter shall be referred to arbitration pursuant to subsection (d) of this section; provided, however, that no arbitration award shall include installation costs or the value of any goodwill, contracts with third parties, or other intangibles of grantee. Any award by arbitration to grantee shall be reduced by the amount of any damages incurred by the city in connection with the cancellation of the franchise; and damages shall include, without limitation, reasonable and necessary payments made by the city pursuant to a resolution of the city authorizing or directing another person or entity to operate the system for a temporary period for the benefit of the subscribers until a franchise therefor may be granted.

(d) A panel of three arbitrators shall determine such matters which are expressly subject to arbitration under provisions of this franchise. Arbitration shall be mandatory as to both grantee and the city. The grantee and the city shall each appoint one arbitrator, and the third arbitrator shall be appointed by the presiding judge in the Superior Court of Orange County; provided, however, that the city and the grantee may agree that the two arbitrators appointed by each may in turn appoint a third arbitrator. All provisions of the California Arbitration Act of the Code of Civil Procedure §§ 1280—1294.2, shall apply to all matters herein subject to arbitration. In no event shall the city be obligated for more than half the expenses of such arbitration, including the fees of the arbitrators.

(Ord. No. 88-12, § 4(5-4-31), 6-27-88)

If any provision of this chapter or the application of this chapter to any person or circumstances is held invalid by a court of competent jurisdiction or is not in compliance with any requirement of the FCC, the Public Utilities Commission, or any other federal or state agency, the remainder of this chapter, or the application of this chapter to persons or circumstances other than those to which it is held invalid or not in such compliance shall not be affected thereby.

(Ord. No. 88-12, § 4(5-4-32), 6-27-88)

(a) In the carrying out of the construction, maintenance and operation of the CATV system, grantee shall not discriminate against any employee or applicant for employment because of race, religious creed, color, sex, national origin, ancestry, physical handicaps, medical condition or age.

(b) Grantee shall take affirmative action to ensure that applicants are employed, and that employees are treated during employment without regard to their race, religious creed, color, sex, national origin, ancestry, physical handicaps, medical condition or age. Such action shall include, but not be limited to, the following: employment, upgrading, demotion or transfer, recruitment or recruitment advertising, layoff or termination, rates of pay or other forms of compensation, and selection for training, including apprenticeship.

(c) Grantee shall post in conspicuous places, available to employees and applicants for employment, notices setting forth the provisions of this nondiscrimination clause.

(d) Grantee shall, in all solicitations or advertisements for employees placed by or on behalf of the grantee, state that all qualified applicants will receive consideration for employment without regard to race, creed, color, sex, national origin, religion, physical or cultural handicaps, or age.

(e) Grantee shall incorporate the foregoing requirements in all of its contracts for work relative to construction, maintenance and operation of the CATV system, other than contracts for standard commercial supplies or raw materials, and shall require all of its contractors for such work to incorporate such requirements in all subcontracts for such work.

(Ord. No. 88-12, § 4(5-4-33), 6-27-88)

(a) It shall be unlawful for any person to operate a CATV system within the city unless a franchise authorizing such operation has first been obtained from the city and unless such franchise is in full force and effect. Further, from and after the effective date of this chapter, it shall be unlawful for any person to construct, install or maintain within any public street in the city or within any other public property of the city or within any privately owned area within the city which has not yet become a public street, but is designated or delineated as a proposed public street on any tentative subdivision map approved by the city, any equipment or facilities for distributing cable television signals, regardless of whether such equipment or facilities constitute a CATV system within the meaning of section 5.04.020 of this division, unless a franchise authorizing such use of such street or property or area has first been obtained, and unless such franchise is in full force and effect.

(b) It shall be unlawful for any person to make any unauthorized connection, whether physically, electrically, acoustically, inductively or otherwise, with any part of the franchised CATV system within the city for the purpose of enabling himself or others to receive any television signal, radio signal, picture, program or sound, without payment to the operator of the system.

(c) It shall be unlawful for any person, without the consent of the owner, to willfully tamper with, remove or injure any cables, wires or equipment used for distribution of television signals, radio signals, pictures, programs or sound.

(d) It shall be unlawful for any person, receiving signals from a franchised CATV system to charge a rate to any subscriber for the redistribution of such signals which is greater the rate approved by the city council for the franchised CATV system.

(Ord. No. 88-12, § 4(5-4-34), 6-27-88)

Any person violating or failing to comply with the provisions of section 5.04.340 of this chapter shall be guilty of a misdemeanor and for each day of violation or failure to comply may be punished by a fine not to exceed $100.00 or by imprisonment for a term of not to exceed 30 days or by both such fine and imprisonment.

(Ord. No. 88-12, § 4(5-4-35), 6-27-88)

(a) In addition to any remedies imposed for a violation of the franchise or this chapter, the city may impose the following penalties in accordance with the following procedures if the grantee violates any provision of the franchise or this chapter, provided that the grantee has not commenced corrective action within 30 days' written notice to the grantee to correct such violation:

(1) Impose a financial remedy for each occurrence, in an amount not to exceed $500.00, whether per day, incident or other measure of violation, as the city may deem reasonable, provided that the basis for determining the remedy shall be that grantee shall not benefit financially by choosing to pay the remedy rather than meet the franchise requirements, as specified in this chapter.

(2) Require grantee to make payments to its customers or classes of customers in such amount and on such basis as is described in section 5.04.140.

(3) Require grantee to correct or otherwise remedy the violation prior to any rate increase becoming effective.

(b) If the stated violation is not reasonably curable within 60 days, the franchise will not be terminated or revoked or a remedy imposed pursuant to subsection (c) of this section if the grantee provides, within the 60 days, a plan, satisfactory to the city, to remedy the violation and continues to demonstrate good faith in seeking to correct the violation.

(c) In determining which remedy or remedies for grantee's violation are appropriate, the city shall take into consideration the nature of the violation, the person or persons bearing the impact of the violation, the nature of remedy required in order to prevent further such violations, and such other matters as the city may deem appropriate; provided, however, that adequate remedies must be imposed if service is in any way materially lessened, or if any material provision of this franchise or agreement is not complied with.

(d) If correction is not made after 30 days of the notice to correct the violation, the city manager, or his authorized designee, may set a noticed hearing for purposes of determining the existence of such violation and imposing penalties in accordance with the procedures set forth in section 5.04.140.

(Ord. No. 88-12, § 4(5-4-36), 6-27-88)

This section applies to unincorporated areas where cable television is not constructed. In the event of conflict with other sections of this chapter, this section shall govern in all areas not yet constructed with cable television.

(1) Service area.

a. Grantee shall service every residential structure unless grantee can show reason why it would not be technically or economically feasible to do so. In the case of currently undeveloped areas, service must be provided within 12 months of construction of new residential units. Service shall not be provided to newly constructed areas until such time as grantee has submitted a plan acceptable to the city which provides a schedule of construction of existing residential areas within grantee's service area. The city may waive or defer grantee's obligation to provide service.

b. All governmental and educational institutions, community and cultural centers, libraries, law enforcement facilities and fire stations within the service area shall be provided one bidirectional cable installation on both the residential and institutional networks, and highest tier of noninteractive service offered to residential subscribers. These installations shall be made at the expense of the grantee.

c. The cable system shall have the capability to provide institutional service to all institutions located in the service area.

(2) System design.

"Built into the system and fully activated" means that all of the system components for the 54 television channels and four television channels plus data upstream must be in place and operational as of the date of the completion of construction, with the exception of channel components, which will be provided with the activation of each channel. "Channel component" is a device that is added to the cable television system at the headend. Two examples of channel component are: a "signal processor" and a "modulator." Unless otherwise required, the following capabilities must be built into the system and must be fully activated as of the date of completion of construction:

a. Residential network: There shall be at least 54 TV channels plus FM (400 MHZ) downstream and four TV channels plus data (five—30 MHZ) upstream.

b. Institutional network: Grantee shall submit a plan, for approval by the city council, for construction and activation of the institutional network. The plan shall include evaluation criteria for determining when the construction and activation of the institutional system shall be implemented. An evaluation shall test whether the criteria occurred. If the evaluation shows the criteria have occurred, grantee shall begin construction of the system within six months and complete construction of the system within 18 months of the evaluation. Construction and activation plan must be submitted to and approved by the council at the time a franchise is granted, or before an existing franchisee's service area extension request is approved, or before an existing franchisee begins construction in areas covered by this section.

Evaluations shall be conducted by the grantee at least every 18 months beginning within six months after grantee's cable television system has 4,000 subscribers for three consecutive months. The as-built physical plant shall include 15 bidirectional channels. The system shall be designed and built in such a manner as to have the capability to expand to pass every institution including commercial location, school, government facility and nonprofit organization within the service area.

c. Home interactive services: The cable television system shall be constructed so as to include the capability for home interactive services including, but not limited to, security, alarm monitoring, home shopping, energy management, video text, subscriber polling, video games, meter reading, one-way or interactive education and electronic banking service.

Grantee shall submit a plan, for approval by the council, for the activation of home interactive services system. The plan shall include evaluation criteria for determining when the system shall be activated. An evaluation shall test whether the criteria occurred. If the evaluation shows the criteria have occurred, grantee shall activate the system within three months of the evaluation.

The activation plan must be submitted to and approved by the council at the time a franchise is granted, or before an existing franchisee's service area extension request is approved, or before an existing franchisee begins construction in areas covered by this section.

Factors that shall be considered in the evaluation plan include, but are not limited to, cost, current number of subscribers, and the percent demanding service. Demand as used herein shall mean the willingness of the subscriber to incur a cost for service for at least 12 consecutive months.

Evaluations shall be conducted at least every 12 months beginning within six months after grantee's cable television system has 3,000 subscribers for three consecutive months.

d. Satellite-delivered programming from all operational U.S. satellites that carry at least six services offered to cable subscribers.

e. Standby power generating capability at the cable communications control center and at all hubs. Grantee shall maintain standby power system supplies, rated at least four hours' duration, throughout the distribution networks.

f. The capability to transmit an emergency alert signal to all participating subscribers. Grantee shall also provide an emergency alert override capability to permit the city to interrupt and cablecast an audio message on all channels simultaneously in the event of a disaster or public emergency.

g. All two-way residential and institutional systems must include an automatic status monitoring system, or an equivalent comprehensive maintenance and diagnostic capability. In the event of the latter, approval by the city manager or his designee shall be required.

h. Grantee must submit a plan to the council for approval, which provides for cablecasting facilities, on either an exclusive or shared basis, including a main studio for local origination and access, mobile studio(s) and portable video packages. The plan must address grantee's plans for providing training and availability of equipment and other facilities to its subscribers. The plan must also indicate the ongoing technical support that the grantee will provide, including, but not limited to, equipment maintenance and replacement, training of access users, and program production assistance. The plan must be submitted to and approved by the council at the time a franchise is granted, or before an existing franchisee's service extension request is approved, or before an existing franchisee begins construction in areas covered by this section.

i. Areawide interconnection.

1. Interconnection required. The grantee shall interconnect at least origination and access channels of the cable system with any or all other cable systems in adjacent areas, upon directive of the city in response to a request for interconnection by any adjacent cable television system, adjacent franchisor, or by an educational institution within grantee's service area or an adjacent area. Interconnection of systems shall permit interactive transmission and reception of program material, and may be done by direct cable connection, microwave link, satellite, or other appropriate method. Interconnection must be activated within a reasonable period of time after a request by the city to grantee, but not later than 15 months after such request by the city.

2. Interconnection procedure. Upon receiving the directive of the city to interconnect, the grantee shall immediately initiate negotiations with the other affected system or systems. The cost shall be borne by both grantees, in the proportion of number of channels received, under the assumption that benefits accrue primarily through receipt of additional channels. In the case of regional or statewide interconnection, the same principle shall apply.

3. Relief. The grantee may be granted reasonable extensions of time to interconnect or the city may rescind its order to interconnect upon petition by the grantee to the city. The city may grant the request if it finds that the grantee has negotiated in good faith and has failed to obtain an approval from the system or systems of the proposed interconnection, or that the cost of the interconnection would cause an unreasonable or unacceptable increase in subscriber rates.

4. Cooperation required. The grantee shall cooperate with any interconnection corporation, regional interconnection authority or city, county, state and federal regulatory agency which may be hereafter established for the purpose of regulating, financing or otherwise providing for the interconnection of cable systems beyond the boundaries of the franchise territory.

5. Initial technical requirements to assure future interconnection capability:

i. All cable companies receiving franchises to operate within an area previously franchised to another cable television operator shall attempt to use the same frequency allocations for commonly provided television signals, but at least all regional access signals. If it is not feasible to use the same frequency allocations, grantee shall provide all necessary frequency conversion equipment for those channels which are interconnected.

ii. Grantee shall provide local origination equipment that is compatible throughout the area so that video cassettes or video tapes can be shared by various systems. If it is not feasible to provide compatible equipment, grantee shall provide all necessary conversion, time base correction, or other standardizing equipment to be able to interconnect locally originated programming.

j. Planned activation of services and the institutional network may be revised by the city in accordance with changes in area development and growth, and based on operational provision of new services in other comparable communities and geographic areas.

(3) Programming and services.

a. All TV broadcast signals as required by the FCC.

b. At least the average number of satellite services as provided to subscribers by other cable television systems within the city.

c. Capability to distribute all institutional signals (video, data, audio, telemetry, etc.).

d. At least one programmed-captioned channel for the hearing-impaired when such service or services become available, or the sale or lease of closed-captioned convertors, or both.

e. At least one programmed FM service for the sight-impaired when such services become available.

The grantee shall provide, as a minimum, the services listed above. Services shall not be reduced without the prior approval of the city. If a service becomes unavailable or not economically feasible to carry, grantee shall replace the service by one considered reasonably as attractive to subscribers, if such service exists.

Basic subscriber television services (BSTS). The BSTS shall include the FCC-required services, the distant television broadcast signals, the imported broadcast signals, at least one programmed and captioned channel for the hearing-impaired, and the provisions of all other cablecast open-channel signals. This service shall be provided to all subscribers at the established BSTS monthly subscription rates. BSTS services may be offered in multiple tiers. BSTS rates shall be established and regulated as provided for in section 5.04.130.

Basic subscriber radio service. The basic subscriber radio service shall include the provision of all audio services designated in the franchise agreement, including broadcast FM radio, cablecast FM signals, and at least one programmed service for the sight-impaired.

Institutional service (IS). The institutional service shall include the provision of transmission and/or reception services to institutional users, on a leased channel basis at established IS rates. Services shall include the distribution of video and nonvideo signals.

(4) Local programming. At least ten percent of the residential network downstream channel capacity, one upstream channel on each residential network cable, and 20 percent of the institutional network capability dedicated to local public/nonprofit usage. Grantee may use this capacity for its own programming if not utilized by public/nonprofit agencies, but must dedicate any channel in this category no later than six months after a grantor request.

(5) System and services review. To provide for technological, economic, and regulatory changes in the state of the art of cable communications, to facilitate renewal procedures, to promote the maximum degree of flexibility in the cable system, and to achieve a continuing, advanced, modern system, the city and the grantee shall comply with the following system and services review provisions:

a. The city and grantee shall hold a system and services review session on or about the third anniversary date of the franchise agreement. Subsequent system review sessions shall be scheduled by the city each three years thereafter. All such review sessions shall be open to the public, and notice shall be given.

b. Sixty days prior to the scheduled system and services review session, grantee shall submit a report to city indicating the following:

1. All cable system services that are being provided on an operational basis, excluding tests and demonstrations, to cities in the state with populations above 50,000, that are not provided to the city.

2. A plan for provision of such services, or a justification indicating why such services are not feasible for the city.

c. Topics for discussion and review at the system and services review sessions shall include but shall not be limited to, services provided, rate structure, free or discounted services, application of new technologies, system performance, programming, subscriber complaints, user complaints, rights of privacy, amendments to the franchise, undergrounding processes, developments in the law, and regulatory constraints.

d. Either the city or the grantee may select additional topics for discussion at any review session.

e. Not later than 60 days after the conclusion of each system and services review session, the city shall issue findings, including specifically a listing of any cable services considered technically and economically feasible, and may require that such services be provided within a reasonable time, under reasonable rates and conditions. Failure to provide such directed services may be considered a breach of the franchise.

(6) Waiver. The requirements of this section may be waived by the city manager or the city council for any area not being provided with cable television, upon application by the franchisee to the city, in accordance with the following procedures:

a. Waivers of any or all of the provisions of this section may be requested by a franchisee when facts can be shown by the franchisee that it would not be economically feasible or practical for the franchisee to provide the area to be served with the service level required by this section, and it can be shown that the area could not be practically provided with the service level requirements of this section by another cable television franchisee; and it is in the base interest of the current and future subscribers of the area to grant the waiver.

b. A request for waiver shall be in writing to the city manager. It shall describe the area which is the subject of the waiver request and shall state the grounds for which the waiver is being sought. The waiver request shall state that the franchisee is in compliance with all other conditions of the franchise.

c. The city manager shall grant or deny the waiver request within 30 days of receipt of the request. The response by the city manager shall be in writing and shall state the reasons for granting or denying the waiver request. Any denial of a waiver request by the city manager shall not preclude the franchisee from reapplying for a waiver for the subject area.

d. Any denial of a waiver by the city manager may be appealed by the franchisee to the city council. The appeal must be made in writing to the clerk within 20 days of the written denial. The appeal shall state the facts upon which it is based.

e. Upon appeal, the city council shall schedule a hearing within 45 days from the date of appeal, and upon hearing shall make it a determination affirming, reversing, or modifying the denial of the city manager. The determination of the city council shall be immediately final.

f. This waiver procedure is in addition to and supplemental to any other rights for waiver provided for under this chapter or under any other franchise ordinance.

(Ord. No. 88-12, § 4(5-4-37), 6-27-88)

(a) The city may charge an application fee to cover the costs associated with the preparation of proposal solicitation documents and the evaluation of all applications, including but not limited to, consultant and attorney fees and grantor staff time. The amount of such fee shall be set by resolution of the council.

(b) For any franchise or service area extension granted pursuant to a proposal solicitation, the grantee shall bear all costs including, but not limited to, all costs of publication of notices prior to any meeting provided for pursuant to a franchise or service area extension, development and publication of relevant ordinances and franchise agreements, and any cost not covered by the fee set in subsection (a) of this section.

(Ord. No. 88-12, § 4(5-4-38), 6-27-88)

A fee paid to the city is hereby established for the support of public, educational, and governmental access facilities and activities within the city. Unless a higher percentage is authorized by applicable state or federal law, this fee shall not exceed one percent of a grantee's gross revenues, as that term is defined above in section 5.04.020, or the grantee's franchise agreement, or in applicable provisions of state or federal law. This fee is also applicable to a state video franchise holder operating within the city, which shall pay to the city one percent of its gross revenue, as defined in Public Utilities Code § 5860.

(Ord. No. 07-249, § 1, 4-2-07)

(a) Franchise fee. A state video franchise holder operating in the city shall pay to the city a franchise fee that is equal to five percent of the gross revenues of that state video franchise holder. The term "gross revenues" shall be defined as set forth in Public Utilities Code § 5860.

(b) Audit authority. Not more than once annually, the city may examine and perform an audit of the business records of a holder of a state video franchise to ensure compliance with all applicable statutes and regulations related to the computation and payment of franchise fees.

(c) Customer service penalties under state video franchises.

(1) 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.

(2) The city shall monitor state video franchise holder's compliance with state and federal customer service and protection standards. The city will provide to the state video franchise holder written notice of any material breaches of applicable customer service and protection standards, and will allow the state video franchise holder 30 days from receipt of the notice to remedy the specified material breach. Material breaches not remedied within the 30-day time period will be subject to the following monetary penalties to be imposed by the city in accordance with state law:

a. For the first occurrence of a violation, a monetary penalty of $500.00 shall be imposed for each day the violation remains in effect, not to exceed $1,500.00 for each violation.

b. For a second violation of the same nature within 12 months, a monetary penalty of $1,000.00 shall be imposed for each day the violation remains in effect, not to exceed $3,000.00 for each violation.

c. For a third or further violation of the same nature within 12 months, a monetary penalty of $2,500.00 shall be imposed for each day the violation remains in effect, not to exceed $7,500.00 for each violation.

(3) A state video franchise holder may appeal a monetary penalty assessed by the city within 60 days. After relevant evidence and testimony is received, and staff reports are submitted, the city council will vote to either uphold or vacate the monetary penalty. The city council's decision on the imposition of a monetary penalty shall be final.

(d) City response to state video franchise applications.

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

(2) The city will provide any appropriate comments to the California Public Utilities Commission regarding an application or an amendment to an application for a state video franchise.

(e) PEG channel capacity. A state video franchise holder that uses the public rights-of-way shall designate sufficient capacity on its network to enable the carriage of at least three public, educational, or governmental (PEG) access channels.

(1) PEG access channels shall be for the exclusive use of the city or its designees to provide public, educational, or governmental programming.

(2) Advertising, underwriting, or sponsorship recognition may be carried on the PEG access channels for the purpose of funding PEG-related activities.

(3) The PEG access channels shall be carried on the basic service tier.

(4) To the extent feasible, the PEG access channels shall not be separated numerically from other channels carried on the basic service tier, and the channel numbers for the PEG access channels shall be the same channel numbers used by the incumbent cable operator unless prohibited by federal law.

(5) After the initial designation of PEG access channel numbers, the channel numbers shall not be changed without the prior written consent of the city, unless the change is required by federal law.

(6) Each PEG access channel shall be capable of carrying a national television system committee (NTSC) television signal.

(f) Interconnection. Where technically feasible, a state video franchise holder and incumbent cable operator shall negotiate in good faith to interconnect their networks for the purpose of providing PEG access channel programming. Interconnection may be accomplished by direct cable, microwave link, satellite, or other reasonable method of connection. State video franchise holders and incumbent cable operators shall provide interconnection of the PEG access channels on reasonable terms and conditions and may not withhold the interconnection. If a state video franchise holder and an incumbent cable operator cannot reach a mutually acceptable interconnection agreement, the city may require the incumbent cable operator to allow the state video franchise holder to interconnect its network with the incumbent's network at a technically feasible point on the holder's network as identified by the holder. If no technically-feasible point for interconnection is available, the state video franchise holder shall make an interconnection available to the channel originator and shall provide the facilities necessary for the interconnection. The cost of any interconnection shall be borne by the state video franchise holder requesting the interconnection unless otherwise agreed to by the parties.

(g) Emergency alert system and emergency overrides. A state video franchise holder must comply with the emergency alert system requirements of the Federal Communications Commission in order that emergency messages may be distributed over the holder's network. Provisions in city-issued franchises authorizing the city to provide local emergency notifications shall remain in effect, and shall apply to all state video franchise holders in the city for the duration of the city-issued franchise, or until the term of the franchise would have expired had it not been terminated pursuant to subdivision (m) of Public Utilities Code § 5840, or until January 1, 2009, whichever is later.

(h) Processing of permit application.

(1) In accordance with Public Utilities Code § 5885(c)(2), the director shall either approve or deny an application for a permit submitted by the holder of a state video franchise in accordance with chapter 14.03 of this Code within 60 days after receiving a completed application; provided, however, that the director and a state video franchise holder may mutually agree to an extension of this 60-day time limit. An application for a permit is complete when the applicant has complied with all requirements imposed by statute or ordinance, including the California Environmental Quality Act (Public Resources Code, division 13, § 21000 et seq.).

(2) If the director determines that the application for a permit submitted by the holder of a state video franchise cannot be approved and issued in accordance with chapter 14.03 of this Code, the director shall deny the permit application and shall, at the time of notifying the applicant of the denial, provide to the applicant a detailed explanation of the reason or reasons for the denial.

(3) If the holder of a state video franchise that has applied for a permit is dissatisfied with a decision of the director denying that permit or imposing conditions of approval, that decision may be appealed to the city council. The appeal shall be in writing to the city clerk and shall set forth the basis of the appeal. The city clerk shall schedule the appeal for consideration by the city council at the next regular city council meeting. The city council shall hear the appeal at the next regular city council meeting and may uphold or reverse the director's denial of a permit and may modify, delete, or add to any of the conditions of approval specified by the director; provided that the city's council's action must be consistent with the provisions of chapter 14.03 and with the protection of the general welfare and safety of the public.

(Ord. No. 07-249, § 2, 4-2-07; Ord. No. 08-29, § 1, 6-2-08)