Article II — Franchising Procedures

No person shall establish, construct, operate, or maintain within this city a cable system unless a franchise has been obtained pursuant to the provisions of this chapter, and unless such franchise is in full force and effect.

(Ord. 815 § 1, 2006)

The city council may grant one or more nonexclusive, revocable franchises to establish, construct, operate and maintain cable systems within the city. A franchise shall be effective only upon execution of a franchise agreement between the city and a cable operator and compliance with all requirements of this code. In the event of any conflict between the express terms of this chapter and a franchise agreement, including any amendments to this chapter, the terms of such an agreement shall prevail, except with respect to matters falling within the scope of the city's police powers.

(Ord. 815 § 1, 2006)

A franchise shall be granted a term as specified in the franchise agreement, but in any event not greater than 15 years.

(Ord. 815 § 1, 2006)

• A. A franchise authorizes use of public rights-of-way for installing cables, wires, lines, optical fiber, underground conduit, and other devices necessary and appurtenant to the operation of a cable system to provide cable service within a franchise area, but does not expressly or implicitly authorize a cable operator to provide service to, or install a cable system on, private property without the owner's consent or to use publicly or privately owned conduits or any public property other than the public rights-of-way without a separate agreement with the owners thereof.

• B. A franchise shall constitute both a right and an obligation to provide the cable services regulated by the provisions of this chapter and a franchise agreement.

• C. A franchise is nonexclusive and shall not: explicitly or implicitly preclude the issuance of other franchises to operate cable systems within the city; affect the city's right to authorize use of public rights-of-way or city-owned property by other persons to operate cable systems or for other purposes as the city deems appropriate; or affect the city's right to itself construct, operate, or maintain a cable system.

• D. All privileges prescribed by a franchise shall be subordinate to (without limitation) the city's use and prior lawful occupancy of the public rights-of-way or public property.

• E. The city reserves the right to reasonably designate, in accordance with its generally applicable procedures, where a cable operator's facilities are to be placed within the public rights-of-way or on any city-owned property the cable operator is otherwise authorized to use, and to resolve any disputes among users of the public rights-of-way or such city-owned property.

• F. A franchise authorizes use of the public rights-of-way for the installation and operation of a cable system to provide cable service within a franchise area. The city reserves its rights with respect to the regulation of telecommunications services and facilities, and, to the extent allowed by applicable law, reserves the right to adopt a telecommunications ordinance.

• (Ord. 815 § 1, 2006)

All applicants for a new franchise shall submit a written application to the city. All applicants shall be expected to offer to subscribers a modern, efficient, cost-effective system that will facilitate high-quality maintenance, deliver a variety of programming and services, and provide the flexibility needed to adjust to changing technology and new developments in the industry. Applicants are encouraged to formulate their proposals in an innovative fashion, so as to meet the informational requirements of the city and the service needs of subscribers. Proposals shall contain sufficient material to enable the city council to make fully informed judgments concerning the adequacy of the proposal and the applicant's qualifications to construct, operate and maintain a cable system in the city. All applicants shall, at a minimum, provide the following information unless waived by the city manager:

• A. The name, address and form of business of the applicant, and an identification of the ownership and control of the applicant, including: the names and addresses of the 10 largest holders of an ownership interest in the applicant and affiliates of the applicant, and all persons with 5% or more ownership interest in the applicant and its affiliates; the persons who exercise working control over the applicant and its affiliates, and the persons who control those persons, to the ultimate parent; all officers and directors of the applicant and its affiliates; and any other business affiliation and cable system ownership interest of each named person.

• B. A description of the cable services that are or will be offered or provided by the applicant over its existing or proposed facilities.

• C. A description of the transmission facilities that will be used by the cable operator to offer or provide such cable services.

• D. Preliminary engineering plans, specifications and a network map of the facilities to be located within the city, all in sufficient detail to identify:

  1. The location and route requested for applicant's proposed cable facilities, including a description of the miles of plant to be installed, and a description of the size of equipment cabinets, shielding and electronics that will be installed along the plant route, the power sources that will be used, and a description of the noise, exhaust and pollutants, if any, that will be generated by the operation of the same.

  2. The location of all overhead and underground public utility, telecommunication, cable, water, sewer drainage and other facilities in the public rights-of-way along the proposed route.

  3. The location(s), if any, for interconnection with the facilities of other cable operators.

  4. The specific trees, structures, improvements, facilities and obstructions, if any, that applicant proposes to temporarily or permanently remove or relocate.

• E. If applicant is proposing to install overhead facilities, evidence that surplus space is available for locating its cable facilities on existing utility poles along the proposed route.

• F. If applicant is proposing an underground installation in existing ducts or conduits within the public ways, information in sufficient detail to identify:

  1. The excess capacity currently available in such ducts or conduits before installation of applicant's cable facilities.

  2. The excess capacity, if any, that will exist in such ducts or conduits after installation of applicant's cable facilities.

• G. A preliminary construction schedule and completion dates.

• H. Financial statements prepared in accordance with generally accepted accounting principles by a certified public accountant or other accountant satisfactory to the city, demonstrating the applicant's financial ability to construct, operate, maintain, relocate and remove the facilities. If in the normal course of its business, the applicant does not prepare a separate financial statement for the cable system, the applicant may submit a combined financial statement for the local region, which statement shall include the cable system.

• I. Information in sufficient detail to establish the applicant's technical qualifications, experience and expertise regarding the facilities and services described in the application, including identification of key personnel.

• J. Information to establish the applicant's legal qualifications, including evidence that it has obtained all other governmental approvals and permits to construct and operate the facilities and to offer or provide cable service.

• K. A detailed description of all other services that the applicant intends to provide and sufficient information to determine whether such services are subject to franchising.

• L. An accurate map showing the location of any existing facilities in the city that applicant intends to use or lease.

• M. A description of the services or facilities that the applicant will offer or make available to the city and other public, educational and governmental institutions.

• N. A description of applicant's access and line extension policies.

• O. A written description and detailed map of the exact area or areas of the city the applicant desires to serve and a schedule for build-out to the entire franchise area.

• P. The number of activated, programmed channels that the applicant intends to provide together with the programming that the applicant intends to provide.

• Q. All fees, deposits or charges required pursuant to PHMC § 13.15.080, Application fee.

• R. Such other and further information as may be requested by the city manager.

If a franchise is granted to a person who is acting on behalf of another or presenting its qualifications for the benefit of another and such information is not disclosed in the original application, such franchise shall be deemed void and of no force and effect whatsoever. (Ord. 815 § 1, 2006)

An application fee for a new or renewal franchise or for transfer of a franchise may be required in the amount established from time to time by resolution of the city council, to the extent consistent with applicable law.

(Ord. 815 § 1, 2006)

Upon receipt of an application for a new franchise, the city council may, by resolution, approve or conditionally approve a franchise agreement with the applicant or deny the application. In making any determination hereunder as to any application, the city council shall give due consideration to: the quality of the service proposed; rates to subscribers; experience, character, background and financial responsibility of the applicant, its management and owners; system design; technical and performance quality of equipment; willingness and ability to meet construction requirements and to abide by franchise limitations and requirements; and other considerations deemed pertinent by the city council for safeguarding the interests of the city and the public.

(Ord. 815 § 1, 2006)

• A. The procedure for franchise renewal shall be in accordance with applicable federal and state statutes.

• B. In the absence of any federal or state statute specifically governing franchise renewal procedures, the following procedure shall apply, to the extent consistent with applicable law:

  1. At any time between 24 months and 12 months prior to the expiration of a franchise, a cable operator may apply for renewal of its franchise. Such application shall be made under the provisions of PHMC §§ 13.15.070, Franchise applications, and 13.15.080, Application fee.

  2. Within 12 months of receipt of a completed application for renewal, the city council shall hold a public hearing, having afforded the operator reasonable notice of such hearing. After this public hearing, the city council shall grant or deny the application, basing its decision on the following factors:

     • a. The operator's substantial compliance with the material terms of the existing franchise and applicable law;

     • b. The quality of the operator's services to its subscribers, including signal quality, response to consumer complaints and billing practices, but without regard to the mix or quality of cable services provided over the cable system, has been reasonable in light of community needs;

     • c. Present and future cable-related community needs and interests of the operator's current and potential subscribers, taking into account the cost of meeting such needs and interests;

     • d. The operator's financial, legal and technical qualifications to provide the services, facilities and equipment as set forth in the operator's proposal; and

     • e. Such additional factors as the city council considers relevant to the renewal of the franchise.

  3. In any renewal proceeding, the operator shall be afforded adequate notice and shall be afforded fair opportunity for full participation. The operator at its election and expense may have a transcript made of any such proceeding.

  4. The city council, after a public hearing, may grant or deny a renewal application based on the criteria set forth in this section. The city council shall grant or deny such application by resolution and, where the application is denied, the city council shall state the reasons therefor.

• (Ord. 815 § 1, 2006)

The city shall select persons to whom it issues a franchise based upon the unique technical skills and talents of such persons to operate a cable communications system as well as upon such person's relevant experience and financial condition. As such, a franchise is personal to the franchisee and the identity of a franchisee is a material part of the city's decision to issue a franchise. The granting of approval for a transfer in one instance shall not render unnecessary approval of any subsequent transfer.

(Ord. 815 § 1, 2006)

• A. City council approval required. No transfer shall occur unless prior application is made by the operator to the city and the city council's prior written consent is obtained, pursuant to the operator's franchise agreement and this chapter. Any such transfer without the prior written consent of the city council shall be considered to impair the city's assurance of due performance, and shall be invalid. The granting of approval for a transfer in one instance shall not render unnecessary approval of any subsequent transfer.

  1. Application. An operator shall promptly notify the city manager of any proposed transfer. If any transfer should take place without prior notice to the city manager, the operator shall promptly notify the city that such a transfer has occurred. At least 120 calendar days prior to the contemplated effective date of a transfer, the operator shall submit to the city manager an application for approval of the transfer. Such an application shall provide complete information on the proposed transaction, including details of the legal, financial, technical, and other qualifications of the new controlling entity or transferee, and on the potential impact of the transfer on subscriber rates and service. At a minimum, the following information shall be included in the application; provided, that the operator is not required to duplicate information that it submits to the city manager to comply with its obligations under federal or state law:

     • a. All information and forms required under federal law;

     • b. All information required by this chapter;

     • c. Any contracts or other agreements that relate to the proposed transaction, and all documents, schedules, exhibits, or the like referred to therein; and

     • d. Any shareholder reports or filings with the Securities and Exchange Commission that discuss the transaction.

  2. Supplemental information. The city shall notify an operator of any insufficiency in the information provided in the application within 30 days after receipt thereof. The failure of the city to so notify operator of such insufficiency shall result in the application being deemed complete. For the purposes of determining whether it shall consent to a transfer, the city or its agents may inquire into the qualifications of the prospective controlling entity or transferee and such other matters as the city may deem necessary to determine whether the transfer is in the public interest and should be approved, denied, or conditioned as provided under this chapter. Notwithstanding whether the application has been deemed complete, the city may request additional information related to the proposed transaction to the extent permitted by applicable law.

• B. Determination by city. In making a determination as to whether to grant, deny, or grant subject to conditions, an application for a transfer, the city may consider, without limitation, the legal, financial, technical and other qualifications of the proposed controlling entity or transferee to operate the cable system; whether the operator is in compliance with its franchise agreement and this chapter, and, if not, the proposed controlling entity or transferee's commitment to cure such noncompliance; and whether operation by the proposed controlling entity or transferee or approval of the transfer would adversely affect the public health, safety, or welfare of subscribers or the public.

• C. Transferee's agreement. No application for a transfer of the franchise shall be granted unless the proposed controlling entity or transferee agrees in writing that it will abide by and accept all terms of its franchise agreement and this chapter and that it will assume the obligations, liabilities, and responsibility for all acts and omissions, known and unknown, of the previous operator under its franchise agreement and this chapter, for all purposes, including renewal.

• D. Approval does not constitute waiver. Approval by the city council of a transfer does not constitute a waiver or release of any of the rights of the city under a franchise agreement or this chapter, whether arising before or after the date of the transfer.

• E. Exception for intra-company transfers. Notwithstanding the foregoing, a transfer to an affiliate of the franchisee shall be excepted from the requirements of this section where:

  1. The affiliate is wholly owned and managed by the same ultimate parent as the transferor; and

  2. The transferee affiliate:

     • a. Notifies the city within 30 days of the transfer and, at that time, provides the agreements and warranties required by this section, describes the nature of the transfer, and submits complete information describing who will have direct and indirect ownership and control of the cable system after the transfer;

     • b. Warrants that it has read, accepts and agrees to be bound by each and every term of the franchise agreement and related amendments, regulations, ordinances and resolutions then in effect;

     • c. Agrees to assume all responsibility for all liabilities, acts and omissions, known and unknown, of its predecessor franchisee(s), for all purposes, including renewal;

     • d. Agrees that the transfer shall not permit it to take any position or exercise any right which could not have been exercised by its predecessor franchisee(s);

• e. Warrants that the transfer will not substantially increase the financial burdens upon or substantially diminish the financial resources available to the franchisee (the warranty to be based on comparing the burdens upon and resources that will be available to the transferee compared to its predecessors), or otherwise adversely affect the ability of the franchisee to perform;

  • f. Warrants that the transfer will not in any way adversely affect the city or subscribers;

  • g. Notifies the city that the transfer is complete within five business days of the date the transfer is completed; and

  • h. Agrees that the transfer in no way affects any evaluation of its legal, financial or technical qualifications that may occur under the franchise or applicable law after the transfer, and does not directly or indirectly authorize any additional transfers.

• F. The city's consent to a transfer shall be required upon foreclosure or other judicial sale of all or a substantial part of the system or upon the termination of a lease covering all or a substantial part of the system, and the cable operator shall notify the city. The notification shall be deemed notice of a change in control of the cable operator, which shall require the approval of the city council.

• G. The city council shall approve, conditionally approve or deny a transfer following receipt of all required materials within the period required under federal law, if any, unless an extension is agreed to by the city and the cable operator. Conditions of approval by the city council may include, but are not limited to, the following: (1) resolution of any outstanding franchise violations or performance deficiencies; (2) payment of any outstanding franchise fees; (3) filing of any appropriate bonds, insurance endorsements, letters of credit or guarantees; and (4) written assumption of all obligations of the transferor by the transferee.

• H. Within 30 days after the date of the resolution approving transfer of the franchise, or within such extended period of time as the city council in its discretion may authorize, the transferee shall file with the clerk of the city council its written acceptance of the franchise, in a form satisfactory to the city, together with all required bonds and insurance certificates, and its agreement to be bound by and to comply with and to do all things required of it by the provisions of this chapter and the franchise award resolution. Such acceptance and agreement shall be acknowledged by the transferee before a notary public and shall be in a form and content satisfactory to and approved by the city attorney.

• I. Revocation following bankruptcy.

  1. Notwithstanding any other provision of this chapter, a franchise will automatically terminate by force of law 120 calendar days after an assignment for the benefit of creditors or the appointment of a receiver or trustee to take over the business of the franchisee, whether in a receivership, reorganization, bankruptcy assignment for the benefit of creditors, or other action or proceeding.

  2. However, the franchise may be reinstated if, within the 120-day period:

     • a. The assignment, receivership or trusteeship is vacated; or

     • b. The assignee, receiver, or trustee has fully complied with the terms and conditions of this article and the franchise and has executed an agreement, approved by a court having jurisdiction, assuming and agreeing to be bound by the terms and conditions of the franchise agreement and this code.

• J. Revocation upon foreclosure.

  1. Notwithstanding any other provision of this chapter, in the event of foreclosure or other judicial sale of any of franchisee's facilities, equipment, or property, the city may revoke a franchise after a public hearing before the city council, by serving notice upon the franchisee and the successful bidder at the sale.

  2. The franchise will be revoked and will terminate 30 calendar days after serving such notice, unless:

     • a. The city approves the transfer of the franchise to the successful bidder; and

     • b. The successful bidder agrees with the city to assume and be bound by the terms and conditions of the franchise and applicable law.

• K. Failure to comply with the requirements of this section is a material breach of this chapter, subject to the remedies provided for herein.

• (Ord. 815 § 1, 2006)

Any person occupying the public rights-of-way of the city for the purpose of operating or constructing a cable system, which person does not hold a valid franchise from the city, shall be subject to all provisions of this chapter, including, but not limited to, those provisions regarding construction, technical standards and franchise fees. The city at any time may require such person to obtain a franchise agreement within 30 days of receipt of a written notice from the city that a franchise agreement is required; require such person to remove its property from the public rights-of-way, and, at such person's sole expense, restore the area to a condition satisfactory to the city within a reasonable time period as the city shall determine; remove the property itself and restore the area to a satisfactory condition and charge the person the costs therefor; and/or take any other action permitted by law, including, but not limited to, filing for and seeking damages for trespass. In no event shall a franchise be created unless it is issued by action of the city council and the franchise terms are set forth in a franchise agreement. If a cable operator operates a cable system without first obtaining a valid franchise from the city, the cable operator shall forfeit to the city all gross revenues from the system for so long as such unauthorized operation continues.

(Ord. 815 § 1, 2006)

Any act that a cable operator is or may be required to perform under this chapter, a franchise agreement, or applicable law shall be performed at the cable operator's expense, unless expressly provided to the contrary in this chapter, a franchise agreement, or applicable law. (Ord. 815 § 1, 2006)

Nothing herein shall be deemed or construed to impair or affect, in any way or to any extent, the city's rights of eminent domain to the extent to which such rights may apply to any cable system or franchise.

(Ord. 815 § 1, 2006)

Within 30 days after annexation of areas to the city which are served by a cable operator who does not have a franchise from the city, the cable operator shall apply for a new franchise. Pending consideration of such a franchise, the cable operator shall comply with each and every provision of this article, including but not limited to the franchise fee requirement. If a newly annexed area is not actively served by a cable operator, the cable operator(s) serving the area within the city contiguous to the newly annexed area shall provide service to that area within a reasonable time, subject to the provisions of any applicable franchise agreement; provided, that the cable operator may request relief from this requirement upon a showing that it would be economically infeasible to extend service to that area. (Ord. 815 § 1, 2006)

Should a joint exercise of powers agreement (Gov. Code § 6500, et seq.) or similar agreement be entered between the city and any other jurisdiction in accordance with law providing for the joint regulation of cable operators and cable services or other cooperative arrangements, involved cable operators shall be governed by and subject to that agreement, pursuant to this chapter's provisions; provided, that no such joint powers agreement shall impair any right or obligation of the cable operator under a franchise agreement. (Ord. 815 § 1, 2006)

• A. A cable operator at all times shall be subject to and shall comply with all applicable federal, state, and local laws, subject to PHMC § 13.15.040, Granting. A cable operator at all times shall be subject to all lawful exercise of the police power of the city, including but not limited to all rights the city may have under 47 U.S.C. § 552. Nothing in a franchise agreement shall be deemed to waive the requirements of the various codes, ordinances, policies, rules, regulations, and practices of the city and the city council, subject to the operator's lawful rights under its franchise agreement.

• B. No course of dealing between a cable operator and the city, or any delay on the part of the city in exercising any rights hereunder, or any acquiescence by the city in the actions of a cable operator that contravene any of the city's rights (except to the extent such rights are expressly waived by the city in writing), shall operate as a waiver of any such rights of the city.

• C. The city shall have the maximum authority to regulate cable systems, cable operators, and franchises as may now or hereafter be lawfully permissible; unless rights are expressly waived in a franchise agreement, they are hereby reserved, whether expressly enumerated or not.

• D. The city manager and the city council may, from time to time, issue such rules and regulations concerning cable systems as are consistent with, or authorized by, applicable law.

• E. The city manager and the city council may do all things which are necessary and convenient in the exercise of their jurisdiction under this chapter.

• (Ord. 815 § 1, 2006)

• A. The provisions of this chapter and any franchise agreement shall be liberally construed in order to effectuate the purposes and objectives of this chapter and the franchise agreement and to promote the public interest.

• B. Subject to federal law or regulation, a franchise agreement shall be governed by and construed in accordance with the laws of the State of California.

• (Ord. 815 § 1, 2006)