Tracy Municipal Code Art. 1 Franchise Terms and Conditions

This chapter shall constitute the "Cable System Regulatory Ordinance" of the City of Tracy.

(Ord. 1025 § 6 (part), 2001)

For the purposes of this ordinance, the following terms, phrases, words and their derivations shall have the meaning given herein. Words used in the present tense include the future, words in the plural number include the singular number, and words in the singular number include the plural number. Words not defined shall be given their common and ordinary meaning.

"Basic cable service" means any service tier which includes the retransmission of local television broadcast signals.

"Cable operator" means any person or group of persons who:

(1) provides cable service over a cable system and directly or through one (1) or more affiliates owns a significant interest in such cable system; or

(2) otherwise controls or is responsible for, through any arrangement, the management and operation of such cable system.

"Cable service" means:

(1) The one-way transmission to subscribers of

(i) video programming; or

(ii) other programming service; and

(2) Subscriber interaction, if any, which is required for the selection or use of such video programming or other programming service.

"Cable system" or "system" means a facility, consisting of a set of closed transmission paths and associated signal generation, reception, and control equipment that is designed to provide cable service which includes video programming and which is provided to multiple subscribers within a community, but such term does not include:

(1) a facility that serves only to retransmit television signals of one (1) or more television broadcast stations;

(2) a facility that serves subscribers without using any public rights-of-way;

(3) a facility of a common carrier which is subject, in whole or in part, to the provisions of Title II of the Communications Act of 1934, as amended, except that such facility shall be considered a cable system (other than for the purposes of 47 U.S.C. 541) to the extent such facility is used in the transmission of video programming directly to subscribers; unless the extent of such use is solely to provide interactive on-demand services;

(4) an open video system that complies with Title VI of the Communications Act of 1934 (47 U.S.C. 573), as amended; or

(5) any facilities of any electric utility used solely for operating its electric utility system.

"Channel" or "Cable Channel" means a portion of the electromagnetic frequency spectrum which is used in a cable system which is capable of delivering a television channel as defined by the Federal Communications Commission.

"Council" means the City Council of the City of Tracy.

"Franchise" means an initial authorization, or renewal thereof, issued by the Council, whether such authorization is designated as a franchise, permit, license, resolution, contract, certificate, agreement, or otherwise, which authorizes the construction or operation of a cable system. Any such authorization, in whatever form granted, shall not supersede the requirement to obtain any other license or permit required for the privilege of transacting business within the City as required by the other ordinances and laws of the City.

"Franchise agreement" means a franchise grant ordinance, accepted by the grantee, or a contractual agreement, containing the specific provisions of the franchise granted, including references, specifications, requirements and other related matters.

"Franchise area" or "service area" means the entire geographic area within the municipal boundaries of the City as it is now constituted or may in the future be constituted, unless otherwise specified in the franchise.

"Franchise fee" means any fee or assessment of any kind imposed by the City on a grantee as compensation for the grantee's use of the public rights-of-way. The term "franchise fee" does not include:

(1) any tax, fee or assessment of general applicability (including any such tax, fee, or assessment imposed on both utilities and cable operators or their services, but not including a tax, fee or assessment which is unduly discriminatory against cable operators or cable subscribers);

(2) capital costs which are required by the franchise to be incurred by grantee for public, educational, or governmental access facilities;

(3) requirements or charges incidental to the awarding or enforcing of the franchise, including payments for bonds, security funds, letters of credit, insurance, indemnification, penalties, or liquidated damages; or

(4) any fee imposed under Title 17, United States Code.

"Grantee" means any "person" receiving a franchise pursuant to this ordinance and under the granting franchise ordinance or agreement, and its lawful successor, transferee or assignee.

"Grantor" or "City" means the City of Tracy as represented by the council or its delegate, acting within the lawful scope of its jurisdiction.

"Gross annual cable service revenues" means the annual gross revenues received by a grantee from the operations of the cable system within the City to provide cable service utilizing the public rights-of-way for which a franchise is required, excluding refundable deposits, rebates or credits, and any sales, excise or other taxes or charges imposed externally to the franchise, and collected for direct pass-through to local, state or federal government.

"Installation" means the connection of the system to subscribers' terminals for the provision of cable service.

"Normal operating conditions" means those service conditions which are within the control of grantee. Those conditions which are not within the control of the grantee include, but are not limited to, natural disasters, civil disturbances, power outages, telephone network outages, and severe or unusual weather conditions. Those conditions which are ordinarily within the control of the cable operator include, but are not limited to, special promotions, pay-per-view events rate increases, regular peak or seasonal demand periods, and maintenance or upgrade of the cable system.

"Person" means an individual, partnership, association, joint stock company, trust, corporation or governmental entity.

"Public, educational or government access facilities" or "PEG access facilities" means the total of the following:

(1) Channel capacity designated for noncommercial public, educational, or government use; and

(2) facilities and equipment for the use of such channel capacity.

"Section" means any section, subsection or provision of this ordinance.

"Service tier" means a category of cable service or other video programming services provided by a cable operator and for which a separate rate is charged.

"State" means the State of California.

"Street" or "public way" or "public rights-of-way" means each of the following which have been dedicated to the public or are hereafter dedicated to the public and maintained under public authority or by others and located within the service area: streets, roadways, highways, avenues, lanes, alleys, sidewalks, easements, and all rights-of-way and similar public property as defined in the City of Tracy Municipal Code.

(v) "Subscriber" or "customer" or "consumer" means any person who or which elects to subscribe to, for any purpose, cable service provided by the grantee by means of or in connection with the cable system, and who pays the charges therefore.

(Ord. 1025 § 6 (part), 2001)

A franchise granted by the City under the provisions of this ordinance shall encompass the following purposes:

(a) to permit the grantee to engage in the business of providing cable service, and such other services as may be permitted by law which grantee chooses to provide to subscribers within the designated service area.

(b) to permit the grantee to erect, install, construct, repair, rebuild, reconstruct, replace, maintain, and retain, cable lines, related electronic equipment, supporting structures, appurtenances, and other property in connection with the operation of the cable system in, on, over, under, upon, along and across public rights-of-way, streets or other public places within the designated service area.

(c) to permit the grantee to maintain and operate said franchise properties for the origination, reception, transmission, amplification, and distribution of television and radio signals and for the delivery of cable services, and such other services as may be permitted by law.

(d) To set forth the obligations of the grantee under the franchise.

(Ord. 1025 § 6 (part), 2001)

After the effective date of this ordinance, it shall be unlawful for any person to construct, install or operate a cable system in the City within any public way without a properly granted franchise awarded pursuant to the provisions of this ordinance, provided, that any franchise granted prior to the effective date of this ordinance shall remain in effect until such franchise expires or is renewed.

(Ord. 1025 § 6 (part), 2001)

(a) A franchise granted hereunder shall be for a term established in the franchise agreement, commencing on the effective date of an ordinance or resolution authorizing the franchise.

(b) A franchise granted hereunder may be renewed upon application by the grantee pursuant to the provisions of applicable state and federal law.

(Ord. 1025 § 6 (part), 2001)

Any franchise shall be valid within all the municipal limits of the City, and within any area added to the City during the term of the franchise, unless otherwise specified in the franchise agreement.

(Ord. 1025 § 6 (part), 2001)

This ordinance shall be construed in a manner consistent with all applicable federal and state laws, and shall apply to all franchises granted or renewed after the effective date of this ordinance to the extent permitted by applicable law.

(Ord. 1025 § 6 (part), 2001)

(a) Grantee shall not sell, transfer, lease, assign or dispose of, in whole or in part, either by forced or involuntary sale, or by ordinary sale, contract, consolidation or otherwise, the franchise or any of the rights or privileges therein granted, without the prior consent of the Council, which consent shall not be unreasonably denied, withheld or delayed; provided, however, that the prior consent of the Council shall not be required for an intracorporate or intracompany transfer from one wholly-owned subsidiary to another wholly-owned subsidiary. Any attempt to sell, transfer, lease, assign or otherwise dispose of the franchise without the consent of the Council shall be null and void. The granting of a security interest in any grantee assets, or any mortgage or other hypothecation or by assignment of any right, title or interest in the cable system, or use of the cable system as collateral in order to secure indebtedness, shall not be considered a transfer for the purposes of this section.

(b) The requirements of subsection (a) shall apply to any change in control of grantee. The word "control" as used herein includes majority ownership, and actual working control in whatever manner exercised. In the event that grantee is a corporation, prior consent of the Council shall be required where ownership or control of more than thirty (30%) percent of the voting stock of the grantee is acquired by a person or group of persons acting in concert, none of whom own or control the voting stock of the grantee as of the effective date of the franchise, singularly or collectively.

(c) Grantee shall notify grantor in writing of any foreclosure or any other judicial sale of all or a substantial part of the franchise property of the grantee or upon the termination of any lease or interest covering all or a substantial part of said franchise property. Such notification shall be considered by grantor as notice that a change in control or ownership of the franchise has taken place and the provisions under this section governing the consent of grantor to such change in control or ownership shall apply.

(d) For the purpose of determining whether it shall consent to such change, transfer, or acquisition of control, grantor may inquire into the qualifications of the prospective transferee or controlling party, and grantee shall assist grantor in such inquiry. In seeking grantor's consent to any change of ownership or control, grantee shall have the responsibility of insuring that the grantee and/or the proposed transferee complete an application in accordance with Federal Communications Commission Form 394 or equivalent. An application shall be submitted to grantor not less than 120 days prior to the proposed date of transfer. The transferee shall be required to establish that it possesses the legal, technical and financial qualifications to operate and maintain the system and comply with all franchise requirements for the remainder of the term of the franchise. If the franchisee is then in compliance with the requirements of the franchise, and the legal, financial and technical qualifications of the applicant are satisfactory, the grantor shall consent to the transfer of the franchise. If the grantor has not taken action on the grantee's request for transfer within 120 days after receiving such request, grantor's consent to such transfer shall be deemed given. The consent of the grantor to such transfer shall not be unreasonably denied or delayed.

(e) Any financial institution having a pledge of the grantee or its assets for the advancement of money for the construction and/or operation of the franchise shall have the right to notify the grantor that it or its designee satisfactory to the grantor shall take control of and operate the cable system, in the event of a grantee default of its financial obligations. Further, said financial institution shall also agree in writing to continue cable service and comply with all franchise requirements during the term the financial institution exercises control over the system.

(f) Upon transfer, grantee shall reimburse grantor for grantor's reasonable processing and review expenses in connection with the transfer of the franchise including without limitation, costs of administrative review, financial, legal and technical evaluation of the proposed transferee, consultants (including technical and legal experts and all costs incurred by such experts), notice and publication costs and document preparation expenses. Any such reimbursement shall not be charged against any franchise fee due to grantor during the term of the franchise.

(Ord. 1025 § 6 (part), 2001)

(a) Grantee shall design, construct and maintain the cable system to have the capability to pass every residential dwelling unit in the service area, subject to any service area line extension requirements of the franchise agreement.

(b) After service has been established by activating trunk and/or distribution cables for any service area, grantee shall provide service to any requesting subscriber within that service area within sixty (60) days from the date of request, provided that the grantee is able to secure all rights-of-way, permits and landlord agreements necessary to extend service to such subscriber within such sixty (60) day period on reasonable terms and conditions.

(Ord. 1025 § 6 (part), 2001)

Any franchise granted pursuant to this ordinance shall be nonexclusive. The grantor specifically reserves the right to grant, at any time, such additional franchises for a cable system, as it deems appropriate, subject to applicable state and federal law, provided that if the grantor grants an additional franchise, then the material provisions of any such additional franchise shall be reasonably comparable to the terms and conditions contained in the initial grantee's franchise, so that all grantees are accorded competitively neutral and nondiscriminatory treatment.

(Ord. 1025 § 6 (part), 2001)

(a) Grantor may grant any number of franchises subject to applicable state or federal law. Grantor may limit the number of franchises granted, based upon, but not necessarily limited to, the requirements of applicable law and specific local considerations, such as:

(1) The capacity of the public rights-of-way to accommodate multiple cables in addition to the cables, conduits and pipes of the utility systems, such as electrical power, telephone, gas and sewerage.

(2) The benefits that may accrue to subscribers as a result of cable system competition, such as lower rates and improved service.

(3) The disadvantages that may result from cable system competition, such as the requirement for multiple pedestals on residents' property, and the disruption arising from numerous excavation of the public rights-of-way.

(b) For any new residential housing, commercial or industrial development, grantor shall address in the project development conditions of approval where electrical and telephone utilities and cable lines are to be placed underground. The developer of such new development shall coordinate with each grantee serving the franchise area for installation of conduits, pedestals and vaults, and provide each grantee at least ten (10) working days prior written notice of the date on which open trenches will be available for such installation. On request of the developer, the grantee shall coordinate with the developer and provide specifications for trenching, vaults and conduit requirements in compliance with grantor standards to accommodate the cable system. The developer shall be responsible for constructing the underground and above grade utility improvements on the housing development to comply with the grantee's specifications and meeting the grantor's requirements. Developers of new residential housing with underground utilities shall provide conduit of sufficient size to accommodate cables for at least two (2) cable systems and dedicate the use of such conduit to the City. If the grantor leases any such conduit space, said leases shall be on a nondiscriminatory basis to similarly situated users.

(c) Any grantee may install its own conduit, subject to grantor permit conditions.

(d) Grantor may require that any new entrant, non-incumbent grantee be responsible for its own underground trenching and the costs associated therewith, if, in grantor's opinion, the public rights-of-way in any particular area cannot feasibly and reasonably accommodate additional cables.

(Ord. 1025 § 6 (part), 2001)