Poway Municipal Code Art. III Regulation of Franchise

The grantor shall exercise appropriate regulatory authority under the provisions of this chapter and applicable law.

(Ord. 129 § 5.1, 1984; Ord. 298 § 1, 1989)

The grantor, acting alone or acting jointly with other grantors, may exercise or delegate the following regulatory responsibility:

A. Administering and enforcing the provisions of the cable communications system franchise(s);

B. Coordinating the operation of government and educational channels;

C. Providing technical, programming and operational support to public agency users, such as government departments, schools and public health care institutions;

D. Establishing procedures and standards for use of channels dedicated to public use and sharing of public facilities, if provided for in any franchise agreement;

E. Planning expansion and growth of public benefit cable services;

F. Analyzing the possibility of integrating cable communications with other local, State or Federal telecommunications networks;

G. Formulating and recommending long-range telecommunication policy.

(Ord. 129 § 5.2, 1984)

If so specified in the franchise agreement, the grantor may utilize a portion of the cable communications system capacity, and associated facilities and resources, to develop and provide cable services that will be in the public interest. In furtherance of this purpose, the grantor may establish a commission, public corporation, or other entity to receive and allocate facilities, support funds and other considerations provided by the grantee, and/or others. Such an entity, if established, may be delegated the following responsibilities:

A. Receive and utilize or reallocate for utilization, channel capacity, facilities, funding and other support provided specifically for public usage of the cable communications system;

B. Review the status and progress of each service developed for public benefit;

C. Reallocate resources on a periodic basis to conform with changing priorities and public needs;

D. Report to the grantor annually on the utilization of resources, the new public services developed and the benefits achieved for the City and its residents.

(Ord. 129 § 5.3, 1984)

The grantor reserves the right, at its discretion, from time to time, to determine if the entity described in PMC § 5.60.145 is performing its purposes in a manner satisfactory to the grantor, and if it is not, the grantor may receive and allocate all or a portion of the channel capacity, operations, and capital appropriation, including any facilities and equipment purchased previously with such appropriation, to another entity. A new entity shall be required to comply in all respects with the legal responsibilities described in PMC § 5.60.145.

(Ord. 129 § 5.4, 1984)

A. The grantee shall establish initial rates that must be applied fairly and uniformly to all subscribers in the franchise area for its services except as provided below.

B. In the event that grantee’s franchise area, or any portion thereof, is actually overbuilt by another franchised or licensed cable operator, or other person or entity who provides the equivalent of cable television services, grantee may, but shall not be required to, reduce its rate schedule for those subscribers within the overbuild area without being required to reduce its rate(s) throughout the entirety of its service area; provided, however, grantee’s published rates shall constitute the maximum rate which can be charged to any subscriber within grantee’s service area irrespective of the presence of overbuild competition or the lack thereof.

C. Grantee may, but shall not be required to, adopt promotional policies which reduce rates upon all or a portion of the services offered by grantee. Grantee shall give notice of the promotional policies to the grantor. Grantee’s promotional policies may be implemented or changed by grantee from time to time without the consent of the grantor; provided, however, grantee’s promotional policies, until changed, shall be applied uniformly throughout an identifiable portion of the grantee’s entire service area.

(Ord. 129 § 5.5, 1984; Ord. 298 § 1, 1989)

A. The grantee may establish its own rates and charges for services rendered to subscribers under this chapter.

B. The grantor may recapture its rate-making authority at any time as is allowed by applicable law.

C. When the grantee elects to increase its rates it shall notify, in writing, the grantor, a minimum of 45 calendar days before the increase is scheduled to take effect.

D. Within 60 days following the notification to the grantee that the grantor wishes to challenge the rate increase, the grantor shall hold a public hearing to consider the proposed rate change, at which hearing all persons desiring to be heard, including the grantee, shall be heard on any matter including, but not limited to, the performance of its franchise, the grantee’s service, and the proposed new rates.

E. Upon notice of any public hearing as provided above, the grantee shall notify its subscribers of the time, place, and subject matter of the public hearing by announcement on at least two channels of its system between the hours of 7:00 p.m. and 9:00 p.m., for at least five consecutive days prior to the hearing or by such suitable means and messages as may be approved by the grantor.

F. Within 90 days after said hearing, the grantor shall render a written decision on the grantee’s petition, either accepting, rejecting, modifying or deferring the same and reciting the basis for its decision. The grantor shall consider, but not be limited to, the following factors in approving or disapproving the petition:

1. Grantee’s fulfillment of all requirements of the franchise;

2. Quality of service, as indicated by the number and type of service complaints, grantee’s response to complaints, and the result of periodic system performance tests and the annual reviews specified in PMC § 5.60.195;

3. Prevailing rates for comparable services in other cable systems of similar size and complexity;

4. Rate of return on grantee’s equity, as compared to businesses of equivalent risk; for the purposes of this chapter, the rate of return on equity shall be defined as the net, after tax profit divided by the equity portion of grantee’s investment in tangible assets; the investment shall be defined as the cumulative cost of tangible assets such as plant, property and equipment, less the cumulative depreciation charges, plus working capital, which shall be defined as equivalent to three months total operating expenses; the rate of return shall be calculated on a cumulative basis for all system revenues and costs including services such as pay-cable that may be exempt from local rate regulation; upon request of the grantor, grantee shall promptly provide, from the grantee, its parent company and any subsidiary company, all information as shall be reasonably necessary to determine system revenues and costs;

5. Performance of grantee in introducing new services and expanding the cable system’s capability, as compared to other systems of similar size and complexity, and as evaluated by the system and services review specified in PMC § 5.60.195;

6. Tax benefits received by grantee, its partners or share holders, as the result of their investment in the system;

7. Cash flow derived from system services; the grantor shall not consider any valuation based upon the franchise or the grantee’s goodwill and these items of value shall neither be amortized as an expense nor shall a return be paid on them.

G. If the grantor fails to render a written decision either accepting, rejecting, modifying, or deferring grantee’s petition within 180 days of the grantee’s petition pursuant to this chapter, the grantee shall thereafter be entitled to put its proposed new rates into effect;

H. The grantee’s request for a rate increase shall at the request of the grantor, include, but not be limited to, the following financial reports, which shall reflect the operations of the system:

1. Balance sheet;

2. Income sheet;

3. Statement of sources and applications of funds;

4. Detailed supporting schedules of expenses, income, assets, depreciation and other items as may be required;

5. Statement of current and projected subscribers and penetration.

(Ord. 129 § 5.6(a – h), 1984; Ord. 298 § 1, 1989)

The grantee shall maintain and file with the grantor, a complete schedule of subscriber rates including all fees and charges for services not subject to regulation or approval by the grantor.

(Ord. 129 § 5.6(i), 1984)

There shall be no charge for disconnection from the system. However, if a subscriber has failed to pay properly due monthly fees or if a subscriber disconnects for seasonal periods, the grantee may require, in addition to full payment of any delinquent fees, a reasonable fee for reconnection.

(Ord. 129 § 5.6(j), 1984)

The grantee shall receive no consideration whatsoever for or in connection with its provision of service to its subscribers other than as filed with the grantor.

(Ord. 129 § 5.6(k), 1984; Ord. 298 § 1, 1989)

The grantee shall not submit a request for rate increases earlier than 12 months after a prior request.

(Ord. 129 § 5.6(l), 1984)

The grantee shall give notice to subscribers at least 30 days in advance of the implementation of a rate increase, and no part of the increase shall be applicable to any bills for service which have already been sent to subscribers.

(Ord. 129 § 5.6(m), 1984)

At the grantor’s sole option, within 90 days of the first anniversary of the effective date of each franchise, and each year thereafter throughout the term of the franchise, the grantor and grantee shall meet publicly to review the performance, quality of service and rates of the cable communications system. The reports required in Article VII of this chapter regarding subscriber complaints, the records of performance tests and the opinion survey report shall be utilized as the basis for review. In addition, any subscriber may submit complaints during the review meetings, either orally or in writing, and these shall be considered.

A. Within 30 days after the conclusion of the system performance review meetings, the grantor shall issue findings with respect to the adequacy of system performance and quality of service. If inadequacies are found, the grantor may direct grantee to correct the inadequacies within a reasonable period of time.

B. Failure of grantee, after due notice, to correct the inadequacies shall be considered a material breach of the franchise, and the grantor may, at its sole discretion, exercise any remedy within the scope of this chapter or State law considered appropriate.

(Ord. 129 § 5.7, 1984)

To provide for technological, economic, and regulatory changes in the proven and accepted 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 grantor and the grantee shall comply with the following system and services review provisions and the franchise agreement:

A. At the grantor’s sole option, the grantor and grantee shall hold a system and services review session; however, the grantor shall not require such sessions more frequently than every three years;

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

1. All cable system services referred to above that are known to be in large metropolitan areas;

2. A plan for provision of such services, or justification indicating why such services are not feasible for the franchise area;

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 grantor 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 grantor shall issue findings, including specifically a listing of any cable services not then being provided to the grantor that are considered technically and economically feasible. The grantor may direct grantee to provide such services within a reasonable time, under reasonable rates and conditions. Failure to provide such direct services may be considered a breach of the franchise, subject to remedies as provided in this chapter.

(Ord. 129 § 5.8, 1984)

It is the intent of the grantor to ensure that public access channels provided for in any franchise agreement, shall be managed in the best public interest, so that programming on such channels will be free of censorship, open to all residents, and available for all forms of public expression, community information and debate of public issues. Pursuant to these objectives, the grantor may delegate the responsibility for nonregionally oriented public access channel management to a nonprofit entity which may include, but not be limited to, any of the following:

A. A nonprofit public corporation;

B. An access management commission or committee, appointed by the grantor, and representing a broad spectrum of the community;

C. An established nonprofit entity with special cablecasting capability, such as a local or regional community college.

(Ord. 129 § 5.9(a), 1984; Ord. 298 § 1, 1989)

The entity designated to manage the access channels shall have the following functions:

A. Responsibility for program production for and management of the public access channel. Public access channels may include government and educational access channels, as designated in the franchise agreement;

B. To assure that the public access channels are made available to all residents of the franchise area on a nondiscriminatory, first-come, first-served basis;

C. To assure that no censorship or control over program content of the public access channels exist, except as necessary to comply with FCC prohibition of material that is obscene, or to prevent commercial advertising, or conduct a lottery;

D. To devise, establish, and administer all rules, regulations, and procedures pertaining to the use and scheduling of the public education, and government channels;

E. To prepare, in conjunction with the grantee, such regular or special reports as may be required or desirable;

F. To hire and supervise staff;

G. To make all purchases of materials and equipment that may be required;

H. To develop additional sources of funding, such as foundation or Federal or State grants, to further community programming;

I. To perform such other functions relevant to the public access channels as may be appropriate;

J. To establish budgets on an annual basis, and utilize funds and resources received from the grantor or the public usage entity designated in PMC § 5.60.145, for the purpose of access programming.

K. To solicit and receive grantee’s input in regard to these functions.

(Ord. 129 § 5.9(b), 1984; Ord. 298 § 1, 1989)

The access management entity shall complete a set of rules for the use of the public access channels which shall be promptly forwarded to the grantor. The rules shall be prepared in cooperation with the grantee, and confirmed by a contractual agreement between the access management entity and the grantee. The rules shall, at a minimum, provide for:

A. Access on a first-come, first-served, nondiscriminatory basis for all residents of the franchise area;

B. Prohibition of advertising for commercial or political purposes, as defined by the FCC;

C. Prohibition of any presentation of lottery information, or obscene or indecent material;

D. Public inspection of the log of producers, which shall be retained by the grantee for a period of two years;

E. Procedures by which individuals or groups who violate any rule may be prevented from further access to the channel;

F. Free use of such reasonable amounts of channel time, cablecasting facilities, and technical support as are provided for in the agreement between the access management entity and the grantee.

(Ord. 129 § 5.6(c), 1984; Ord. 298 § 1, 1989)

The access management entity shall provide a report to the grantor, at least annually, indicating achievements in community-based programming and services, and also shall provide a special report each time the grantee requests an increase in rates, indicating the level and quality of grantee’s support during the period elapsed since any previous rare increase was implemented.

(Ord. 129 § 5.9(d), 1984)