Walnut Municipal Code Ch. 5.16 Cable, Video, and Telecommunications

This chapter is known and may be cited as the "Cable, Video and Telecommunications Service Providers Ordinance" of the City of Walnut. This chapter is enacted by the City of Walnut pursuant to the City’s charter authority, the Cable Act, the City’s police powers, its powers and rights to control the use of the public right-of-way within the City, and all other applicable laws.

For the purposes of this chapter, the following terms, phrases, words, and abbreviations shall have the meaning given herein. When not inconsistent with the context, words used in the present tense include the future tense, and words in singular number include the plural number. Words not defined by this section shall be given the meaning set forth in the Cable Act, and if not defined therein, their common and ordinary meaning.

"Access," "peg access" or "peg use"

means the availability or use of a cable system or open video system for public, educational or government use (including institutional network use) by public or private agencies, institutions, organizations, groups, and individuals, including, but not limited to grantor, and its designated access providers, to acquire, create, and distribute programming not under grantee’s editorial control, including, but limited to, the following:

Public access or public use where members of the general public are the primary or designated programmers or users having editorial control over their programming;

Educational access or educational use where educational institutions are the primary or designated programmers or users having editorial control over their programming;

Government access or government use where grantor or other governmental institutions designated by grantor are the primary or designated programmers having editorial control over their programming.

"Affiliate"

means a person that (directly or indirectly) owns or controls, is owned or controlled by, or is under common ownership or control with, another person. For purposes of this definition, the term "own" means to own an equity interest (or the equivalent thereof) of more than 10%.

"Cable Act"

means the Cable Communications Policy Act of 1984 (47 U.S.C. Section 521 et seq., as amended by the Cable Television Consumer Protection and Competition Act of 1992 (Public Law No. 102-385) and the Telecommunications Act of 1996 (Public Law No. 104-104), and as hereinafter may be amended.

"Cable service"

means the following: (1) the one-way transmission to subscribers of (a) video programming, or (b) other programming service, (2) subscriber interaction, if any, that is required for the selection or use of such video programming or other programming service, as hereinafter may be amended, regardless of the content of such video programming or communications or the technology or method used to deliver such programming.

"Cable system" or "system"

means grantee’s facilities, consisting of a set of closed transmission paths and associated signal generation, reception, and control equipment that is designed to provide video programming and that is provided to multiple subscribers within the City. Such term does not include:

A facility that serves solely to retransmit the television signals of one or more television broadcast stations;

A facility that serves subscribers without using any public right-of-way;

A facility of a common carrier that is subject, in whole or in part, to the provisions of Subchapter II of Chapter 5 of Title 47 of the United States Code, except that such facility shall be considered a cable system (other than for purposes of 47 U.S.C. Section 541(c)) 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; or if such facility is used to provide cable service, whether on a common carrier or noncommon carrier basis, directly to customers;

An open video system, as defined below, that complies with 47 U.S.C. Section 573; or

Any facilities of any electric utility used solely for operating its electric utility systems.

"City"

means the City of Walnut, California.

"City Manager"

means the City Manager of the City of Walnut, or designee.

"Communications Act"

means the Communications Act of 1934 (48 Stat. 1064, 15 U.S.C. Section 21; 47 U.S.C. Sections 35, 151 through 155, 201 through 221, 301 through 329, 401 through 416, 501 through 505, 601 through 609 (as subsequently amended and as hereinafter may be amended).

"Complete system construction"

means the point in time when all transmission equipment, facilities, and construction work is installed and completed, and when all appropriate tests have been completed such that applicable performance standards pertaining to or dependant upon such construction is verified. The term complete system construction does not include marketing and installation of subscriber service.

"Control(ing/ed)"

means the possession, directly or indirectly, of the power to direct, or to cause the direction of, the management and policies of a specified person, whether through the ownership of voting securities, by contract or otherwise.

"Distribution facility/(ies)"

means cable equipment that is not specific to a subscriber, including trunk and distribution lines, but excluding drop lines to specific locations.

"Drop lines"

means the cable and related equipment connecting the cable system’s plant to equipment at the subscriber’s premises.

"Educational access channel"

means a channel on the cable system that designates educational institutions as the primary providers of noncommercial programming.

"FCC"

means the Federal Communications Commission.

"Franchise"

means the right to construct, operate and maintain a cable system using the City’s streets and rights-of-way pursuant to the terms and conditions of this chapter and other relevant provisions of the municipal code, the franchise agreement, and any ordinance or resolution approving the transfer of the franchise, and any agreement between the City and grantee relating to the operation of the cable system.

"Franchise agreement"

means an agreement granting a franchise pursuant to the terms of the agreement and this chapter. Any conflict between the terms of this chapter and the franchise agreement shall be resolved in favor of the franchise agreement. In the event a franchise is in existence as of the effective date of this chapter, the terms of the franchise shall govern; provided, however, that upon the renewal, extension, amendment or other modification of any such franchise, the renewed, extended, amended or otherwise modified franchise shall comply with this chapter.

"Franchise area"

means the geographic area within the City designated in a franchise where grantee may operate a cable system, as defined in the franchise agreement.

"Government access channel"

means a channel on the cable system that is provided by grantee to grantor and other governmental institutions designated by grantor on which noncommercial informational programming regarding government activities and programs may be presented.

"Grantee"

means any person to whom a valid franchise is granted by the City under this chapter, and the lawful successor, transferee or assignee of such person.

"Gross revenues"

means all revenue, cash, credits, property of any nature, and other consideration derived directly or indirectly by grantee, from or attributable to the sale or exchange of any cable service by or through the cable system, or from or attributable to the sale or exchange of any video programming over the respective open video service system; or in any manner derived from the operation of the cable system or the respective video service system, unless otherwise prohibited by federal or state law. Such revenue and other consideration, regardless of technological platform, includes, without limitation, the following:

Fees received from residential and commercial subscribers to any tier of cable service and for all video programming services;

Fees received for installation, reconnection, downgrade, upgrade and similar services;

Late fees and interest collected on delinquent subscriber fees or charges;

Fees paid for channels that are designated for commercial use;

Fees paid in connection with the rental, lease, or sale of converters, remote controls, and other equipment;

Leased or access channel revenues received in connection with the distribution of any cable service;

All bad debts that are recovered;

All revenue that is received by grantee, or its subsidiaries or affiliates, from the conduct of any service-related activity directly involving the video portion of the cable system, including without limitation revenues derived from advertising sales, the sale of products or services on home shopping channels, and the sale of program guides;

The fair market value of any nonmonetary consideration received by grantee in any transaction with another person relating to the receipt of cable service or the operation of the cable system as it pertains to the offering of cable service, such as a barter transaction, but not less than the customary prices paid in connection with equivalent transactions;

All carriage revenues received from video programming providers, including incentive fees for carriage, contra expense, barters, or other transactions where generally accepted accounting principles would require treatment as revenue;

A franchise fee if itemized and added to the bill.

The term "gross revenues" does not include the following:

"Multichannel video programming distributor"

means a person such as, but not limited to, a cable system operator, an open video system operator, as defined below, a multichannel multipoint distribution service, a direct broadcast satellite service, or a television receive-only satellite program distributor, who makes available multiple channels of video programming for purchase by subscribers or customers.

"Normal operating conditions"

mean service conditions that are within the control of grantee. Those conditions that are ordinarily within the control of grantee include, but are not limited to, special promotions, rate increases, regular peak or seasonal demand periods, and scheduled maintenance or upgrade of the cable system. Those conditions that are not in control of grantee include, but are not limited to, natural disasters, civil disturbances, power outages, telephone network outages, and severe or unusual weather conditions.

"Open video system"

means a facility consisting of a set of transmission paths and associated signal generation, reception, and control equipment that is designed to provide cable services, including video programming, and that is provided to multiple subscribers within the City, provided that the FCC has certified that such system complies with 47 CFR Section 1500 et seq., entitled "open video systems."

"Open video system operator"

means any person or group of persons who provides cable services over an open video system and directly or through one or more affiliates owns a significant interest in that open video system, or otherwise controls or is responsible for the management and operation of that open video system.

"Person"

means any individual, corporation, partnership, proprietorship, or other organization authorized to do business in the State of California.

"Public access channel"

means a channel on the cable system that is provided by grantee for noncommercial programming produced by members of the public or a nonprofit corporation formed by the City to operate and manage such a channel.

"Public right(s)-of-way"

means any of the following that are controlled, used or dedicated for use by the public and located within the City’s jurisdictional limits: streets, roadways, highways, avenues, lanes, alleys, side-walks, public utility easements, rights-of-way and similar public property within which grantee may place its facilities for operating a cable system.

"Service interruption"

means the loss or impairment of the cable services on one or more channels or frequency bands of the cable system used in connection with the provision of cable services to any subscriber.

"Subscriber"

means any person who pays for cable services provided by grantee by means of the cable system.

"Video programming"

means any and all video programming (including, but not limited to, origination programming) provided by the grantee to subscribers and any communications that are ancillary, necessary or common to the use or enjoyment of such video programming.

"Video programming provider and video service supplier"

means any person, company, or service that provides one or more channels of video programming including any communications that are ancillary, necessary or common to the use and enjoyment of the video programming, to or from an address in the City, including to or from a business, home, condominium, or apartment, where some fee is paid, whether directly or included in dues or rental charges for that service, when public rights-of-way are utilized in the delivery of the video programming or communications, regardless of the content of such video programming or communications or the technology or method used to deliver such programming.

A. It is unlawful for any person to establish, operate or carry on the business of distributing to any persons in the City any cable service or video programming, by means of a cable system, unless a franchise therefor is first obtained pursuant to the provisions of this chapter, and unless such franchise is in full force and effect.

B. It is unlawful for any person to construct, install or maintain within any public right-of-way 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 right-of-way but is designated or delineated as a proposed public right-of-way on any tentative subdivision map approved by the City, any equipment or facilities for distributing any cable services or video programming, by means of a cable system, unless a franchise authorizing such use of such street or property or area has first been obtained pursuant to the provisions of this chapter, and unless such franchise is in full force and effect.

C. It is unlawful for any person to make any unauthorized connection, whether physically, electronically, acoustically, inductively or otherwise, with any part of a franchised cable system within this City for the purpose of enabling him or herself or others to receive any cable services carried on a cable system, without the permission of grantee.

D. It is unlawful for any person, without the consent of grantee, to wilfully tamper with, remove, or injure any cables, wires, or equipment used in conjunction with a cable system.

E. This section shall be construed to require a franchise in every instance, except to the extent that such requirement is preempted by state or federal law.

The City may, by ordinance or resolution, grant a franchise to any person, whether operating pursuant to an existing franchise or not, who offers to provide a cable service pursuant to the terms and provisions of this chapter. The franchise shall be subject to all ordinances and regulations of general application now in effect or subsequently enacted, including, without limitation, those concerning encroachment permits, business licenses, zoning, and building.

A. The term of the franchise or any franchise renewal shall be established in the franchise agreement.

B. A franchise may be renewed by the City upon application of grantee pursuant to procedures established by the City, subject to applicable federal and state law. In the event the City does not establish such renewal procedures, the franchise renewal procedures set forth in the Cable Act shall apply.

A. Any franchise granted under this chapter shall be nonexclusive and for the term specified by the franchise agreement.

B. No privilege or exemption shall be granted or conferred by any franchise granted under this chapter except those specifically presented herein.

C. The grant of a franchise, right, or license to use public right-of-way for purposes of providing cable service shall not be construed as a right or license to use such public right-of-way for any other purpose.

D. Any privilege claimed by grantee under a franchise in a public right-of-way or any other public property shall be subordinate to any prior or subsequent lawful occupancy or use thereof, or easement therein, by the City or other government entity.

E. A franchise granted hereunder shall not relieve grantee of any obligation related to obtaining pole space from any department of the City, utility company, or from others maintaining poles in the public right-of-way.

F. Any right or power in, or duty imposed upon any officer, employee, department, or board of the City shall be subject to transfer by the City to any other officer, employee, department, or board of the City.

A. Subject to those restrictions, if any, that are mandated by state or federal law, neither the granting of any franchise nor any of the provisions of this chapter shall be construed to prevent the City from granting additional franchises.

B. Grantee, by its acceptance of any franchise, agrees to be bound by all ordinances and regulations of general application now in effect or subsequently enacted (including, without limitation, those that concern encroachment permits, business licenses, zoning and building) and to comply with any action or requirements of the City in its exercise of such rights or power; provided, however, that such ordinances and regulations shall not materially affect grantee’s rights or obligations under the franchise.

C. Neither the granting of any franchise, nor any of the provisions of this chapter, shall constitute a waiver or bar to the exercise of any governmental right or power of the City.

D. This chapter shall not be construed to impair or affect, in any way, the right of the City to acquire the property of grantee through the exercise of the power of eminent domain, in accordance with applicable law.

E. The City Council may do all things that are necessary in the exercise of its jurisdiction under this chapter and may determine any question of fact that may arise during the existence of any franchise granted under this chapter.

A. No franchise shall be transferred, sold or assigned, nor shall any of the rights, privileges, interests or property related to the franchise be transferred, sold, hypothecated or assigned, either in whole or in part, directly or indirectly, voluntarily or involuntarily, to any person without the prior consent of the City granted by resolution of the City Council. The granting of a security interest in any assets of the grantee, or any mortgage or other hypothecation, will not be deemed a transfer for the purposes of this section.

B. Transfer of a franchise includes, but is not limited to, any transaction in which control of the franchise is transferred from one person or group of persons to another person or group of persons, or ownership or other interest in grantee or its cable system is transferred from one person or group of persons to another person or group of persons, or the rights and obligations held by grantee under the franchise agreement are transferred or assigned to another person or group of persons. In addition, a transfer of the franchise shall be deemed to have occurred upon the transfer on a cumulative basis of ownership or control of 20% of (1) the voting interest of grantee, or (2) the person exercising management authority over grantee.

C. Grantee shall promptly notify the City in writing of a proposed transfer and shall file with the City Manager an application requesting approval of the proposed transfer ("transfer application"). The transfer application shall meet the requirements of Section 5.16.100 (with the transferee being the applicant), and shall provide complete information on the proposed transaction, including a copy of the bona fide offer, and details on the legal, financial, technical and other qualifications of the transferee.

D. In making a determination on whether to approve the transfer application, the City Council shall consider the legal, financial, technical and other qualifications of the transferee to operate the system, whether the incumbent cable system operator is in compliance with its franchise agreement and this chapter and, if not, the candidate transferee’s commitment and plan to cure such noncompliance, whether operation by the transferee would adversely affect cable services to subscribers or otherwise be contrary to the public interest, and such other criteria provided for by applicable state and federal law.

E. A transfer application shall not be granted unless the proposed transferee agrees in writing that it will abide by and accept all terms of this chapter, the franchise agreement, and such other agreements, regulations or restrictions that pertain to the franchise, assume the obligations and liabilities of the previous grantee under the franchise, and assume such other conditions as may be prescribed by the City Council resolution approving the transfer.

F. Approval by the City of a transfer application does not constitute a waiver or release of any of the rights of the City under this chapter or a franchise agreement, whether arising before or after the date of the transfer.

A. The franchise area shall be established by the franchise agreement.

B. Territory annexed to the City ("annexed territory") that is not within the franchise area of an existing franchise may be added to grantee’s franchise pursuant to City Council resolution.

C. All rights acquired under a franchise or license granted by a public entity other than the City ("foreign franchise") shall terminate by operation of law as to annexed territory where grantee of such franchise or license has not commenced installation of a cable system in the annexed territory before the date such annexation becomes effective. Where feasible, the City shall provide notice to the holder of a foreign franchise of the City’s intent to annex territory that may result in a termination under this section. Failure to provide such notice shall not affect the termination of the foreign franchise.

D. Where grantee of a foreign franchise has commenced installation of a cable system in annexed territory on or before the date such annexation becomes effective, grantee may continue to provide cable services to the annexed territory for the balance of the initial term of said franchise (exclusive of any renewal or extension not granted by the City), subject to the terms and conditions then in effect under such franchise, and the timely payment to the City of all franchise fees paid in connection with such service (or such other fees imposed by the City up to the maximum permitted by law).

A. Applications for the grant of a new franchise may be submitted by any person pursuant to the requirements of this chapter and subject to the terms of Walnut Resolution 4149, as such resolution may, from time to time, be amended. The City may, by advertisement or any other means, solicit applications for a new franchise pursuant to a request for proposal ("RFP").

B. An application for a new franchise to construct, operate, or maintain any cable system in the City shall be filed with the office of the City Clerk and shall be on forms prescribed by the City. The City reserves the right to waive all application formalities where the City determines that the best interests of the City would be served by such waiver. The City may, at its sole discretion, request new or additional proposals.

C. Unless waived in writing by the City, all applications for a franchise shall at the minimum contain the following:

1. The name, address and telephone number of the applicant;

2. A detailed statement of the corporation or business entity organization of the applicant, including, but not limited to, the following:

a. The names, residence and business addresses of all officers and directors of the applicant,

b. The names, residence and business address of all officers, persons and entities having an ownership interest of five percent or more in the applicant and the respective ownership share of each such officer, person or entity,

c. The names and address of any parent or subsidiary of the applicant, namely, any other business entity owning or controlling applicant in whole or in part or owned or controlled in whole or in part by the applicant, and a statement describing the nature of any such parent or subsidiary business entity, including, but not limited to, cable systems owned or controlled by the applicant, its parent and subsidiary and the areas served thereby,

d. A detailed description of all previous experience of the applicant in providing cable service or other similar or related communications services,

e. A detailed and complete financial statement of the applicant, certified by an independent certified public accountant, for the fiscal year preceding the date of the application. The City may require a statement from an independent certified public accountant or a recognized lending institution, certifying that the applicant has available sufficient financial resources to construct and operate the proposed cable system in the City,

f. A detailed financial plan (pro forma) for the operation of the proposed cable system, during the term of the proposed franchise, in the format required by the City, and

g. A description of any other cable system franchise(s) awarded to the applicant, its parent or subsidiary, including the place and term of these franchises; the status of their completion, the total cost of completion of each cable system; and the amount of applicant’s and its parent’s or subsidiary’s resources committed to the completion of these cable systems;

3. A detailed description of the proposed plan of operation of the applicant which shall include, but not be limited to, the following:

a. A detailed map indicating all areas proposed to be served, and a proposed time schedule for the construction of the cable system and the installation of all equipment necessary to become operational throughout the entire area to be serviced;

b. A statement or schedule setting forth all proposed classifications of rates and charges to be made against subscribers, including installation charges and other service charges;

c. A detailed statement describing the actual equipment and operational standards proposed by the applicant;

d. A copy of the form of any agreement, undertaking, or other instrument proposed to be entered into between the applicant and any subscriber;

e. A detailed statement describing any existing or proposed agreements and undertakings between the applicant and any person, which materially relates to the application and the granting of the franchise;

f. A detailed description of the applicant’s plan to provide public, educational and government access channel capacity services, facilities and equipment;

g. A detailed description of the applicant’s plans to address the institutional network needs of the City;

h. A copy of any agreement covering the franchise area, if existing between the applicant and the local telephone and/or electric utilities providing for the use of any facilities of the utility including, but not limited to, poles, lines or conduits; and

i. Any other details, statements, or information pertinent to the subject matter of such application which shall be required or requested by the City.

A. The City may make such investigations as it deems necessary to determine the ability of an applicant to satisfactorily perform its obligations under a franchise. The applicant shall timely furnish to the City all such information and data as the City may request. Failure to provide any such information shall constitute sufficient grounds for rejection of any application.

B. Upon receipt of a complete application, with all information required by the City, and after the City staff completes its investigation and review of the application, the City Manager shall prepare a report and make recommendations to the City Council concerning the application.

C. The City Council shall hold a noticed public hearing on the application. Written notice shall be given at least 10 days prior to the hearing on the application by U.S. mail, postage prepaid to the applicant and by publication once in a newspaper of general circulation within the City. Within 60 days after the close of the hearing, unless an extension of time is mutually agreed upon by the City and the applicant, the Council shall make a written decision as to whether the franchise should be granted, and if granted, subject to what conditions. The Council may grant one or more franchises, or may decline to grant any franchise.

D. In making its determination as to whether to grant an application for a new franchise, the City may consider any and all factors which affect the interests of the community including, but not limited to, the quality of the cable service proposed, the areas to be served, the rates to be charged, the amount of franchise fee to be generated, the experience, character, background, performance history and financial responsibility of an applicant (and its management and owners), the technical performance and quality of equipment, the applicant’s willingness and ability to meet construction requirements and all other limitations and requirements pertaining to the franchise, and all other matters deemed pertinent by the City for protecting the interests of the City and the public.

E. Any decision of the City Council concerning the granting or denial of a franchise pursuant to this chapter shall be final.

Franchise renewals shall be processed and reviewed in accordance with then applicable law. The City and grantee, by mutual consent, may enter into renewal negotiations at any time during the term of the franchise.

A. The City may, in its sole discretion, limit the number of franchises granted at any one time based upon its consideration of all appropriate criteria which shall include, but not be limited to, the following:

1. The capability of the public rights-of-way to accommodate the facilities of any proposed additional cable systems;

2. The advantages and disadvantages that may result from additional cable system competition.

B. The City may require that any grantee be responsible for its own underground trenching and any associated costs if, in the City’s opinion, the public rights-of-way in any area do not feasibly and reasonably accommodate the additional cables, machinery, equipment, or other items contemplated in connection with the construction, maintenance and operation of a proposed new cable system. In addition, grantee shall comply with applicable federal and state laws regarding pole attachments.

A. All charges and fees incidental to awarding, renewing, extending and/or enforcing any franchise shall be paid by the franchisee or applicant. No application shall be considered without payment of a deposit with the City covering such fee. If the City’s actual costs in processing and reviewing the application are less than the amount of the fee, any remaining funds from the fee shall be refunded to the applicant within 60 days after final approval or denial of their application. In the event that the deposit is less than the City’s actual costs, grantee shall pay such additional costs to the City within 30 days after written notice from the City that such additional payment is required. If payment of such amount is not made within such time, the City shall cease all further proceedings connected with the application.

B. Any application fees are exclusive of grantee’s obligation to pay other costs and fees required by this chapter, the franchise agreement or the franchise, including, without limitation, construction inspection fees, permit fees, and franchise fees.

A. As compensation for any franchise granted, and in consideration of permission to use the public right-of-way in the operation of its cable system, and because the City will incur costs (other than application fees) in regulating and administering the franchise, grantee shall pay to the City a franchise fee in the amount equal to five percent of grantee’s gross revenues, or such other amount as the City Council may set by resolution or specify in the franchise agreement.

B. The franchise fee assessed shall be paid quarterly, to be received by the City Treasurer not later than 45 days after the close of each quarter of grantee’s fiscal year.

C. On a quarterly basis, grantee shall provide the City a complete and accurate statement verified by a financial officer of grantee indicating gross revenues for the past quarter, listing every revenue source, and depicting gross revenue computations.

D. On an annual basis, grantee shall file a complete and accurate statement certified by grantee’s chief financial officer, indicating all gross revenues for said year, listing every revenue source, and depicting gross revenue computations. If the City has any concerns or objections relating to such report, the City shall have 60 days to notify grantee and request additional information. Grantee shall have 60 days to provide additional information to resolve any concerns or objections to the City’s satisfaction. Thereafter, the City may, at its sole discretion, request that such statement be certified by an independent certified public accountant, at grantee’s sole cost; provided, however, that any such request shall be made within 60 days after grantee’s response is received.

E. At any time during the term of a franchise, the City shall have the right to conduct, or require grantee to obtain, an independent audit by certified public accountants of any and all records of grantee that are related to gross revenue reports or computations. Grantee shall pay the costs of such audit not more frequently than once every five years or upon a proposed transfer or change of control of the franchise. Grantee shall cooperate with any such audit making readily available any and all information requested by the City. The certified public accountants shall be required to certify in the audit that the grantee is in compliance with this chapter and the franchise agreement. Grantee shall maintain in a readily accessible place all such records for a minimum of four years after any payment period that such record pertains to. This right shall be in addition to the City’s right to conduct any other audit.

F. In the event that any franchise fee payment is not paid by the due date, interest shall be charged monthly at a monthly rate of one and one-half percent. In addition, if any franchise fee is not paid in full within 15 days after receipt of notice from the City as to the delinquency of such payment, a late fee in amount of five percent of the delinquent amount shall be assessed.

G. In the event grantee claims to have overpaid by more than five percent the amount of franchise fee actually due during any given quarter, it shall file an application with the City within one year after said payment was made. The failure to timely and properly make such claim shall constitute a waiver by grantee of any right to such claimed overpayment, whether by refund, offset, credit or any other accommodation. All such applications shall state the amount of claimed overpayment, the reason for the claimed overpayment, and sufficient documentation to allow the City to verify grantee’s claim. Upon request by the City, grantee shall provide any further information that is deemed relevant by the City. All such applications shall be considered by the City Council, and the City Council’s decision with respect to such applications shall be final.

The terms and provisions of a franchise agreement for the operation of a cable system may include, without limitation, the following subject matters:

A. The nature, scope, geographical area and duration of the franchise;

B. The applicable franchise fee to be paid to the City, including the percentage amount, the method of computation, and the time for payment;

C. Requirements relating to compliance with and implementation of state and federal laws and regulations pertaining to the operation of the cable system;

D. Requirements relating to the construction, upgrade, or rebuild of the cable system, as well as the provision of special services, such as outlets for public buildings, emergency alert capability, and parental control devices;

E. Requirements relating to the maintenance of a performance bond, a security fund, a letter of credit, or similar assurances to secure the performance of the grantee’s obligations under the franchise agreement;

F. Requirements relating to liability insurance, workers’ compensation insurance and indemnification;

G. Additional requirements relating to consumer protection and customer service standards, including the resolution of subscriber complaints and disputes and the protection of subscribers’ privacy rights;

H. Requirements relating to the grantee’s support of local cable usage, including the provision of public, educational, and government access channels, the coverage of public meetings and special events, and financial or technical support for public, education, and governmental access uses;

I. Requirements relating to construction, operation, and maintenance of the cable system within the public rights-of-way, including compliance with all applicable building codes and permit requirements, the abandonment, removal, or relocation of facilities, and compliance with FCC technical standards;

J. Requirements relating to recordkeeping, accounting procedures, reporting, periodic audits, and performance reviews, and the inspection of grantee’s books and records;

K. Acts or omissions constituting material breaches of or defaults under the franchise agreement, and the applicable penalties or remedies for those breaches or defaults, including fines, penalties, liquidated damages, suspension, revocation and termination;

L. Requirements relating to the sale, assignment, or other transfer or change in control of the franchise;

M. The grantee’s obligation to maintain continuity of service and to authorize, under certain specified circumstances, the City’s operation and management of the cable system;

N. Such additional requirements, conditions, policies, and procedures as may be mutually agreed upon by the parties to the franchise agreement and that will, in the judgment of the City, best serve the public interest and protect the public health, welfare, and safety.

In addition to all other rights and powers retained by the City under this chapter or otherwise, the City reserves the right to terminate any franchise and all rights and privileges of grantee, revoke any franchise, or assess damages or penalties against grantee, in the event of any material breach of its terms and conditions. A material breach by grantee shall include, but not be limited to, the following:

A. Violation of any material provision of this chapter, the franchise agreement or any material rule, order, regulation or directive issued in connection with the franchise;

B. Evasion of any material provision of this chapter or the franchise agreement, or the practice of fraud or deceit upon the City or its subscribers and customers;

C. Material misrepresentation of fact in an application for a new franchise, renewal or transfer of a franchise, whether by act or omission;

D. Failure to pay any franchise fee when said payment is due;

E. Failure to restore cable service after 72 consecutive hours of interrupted cable service, except in the event that the City approves in writing a longer period of interruption after making a determination that there exists just cause for such longer period of interruption;

F. Failure to provide at least 80% of subscribed cable services over the cable system for a period of five days, except in the event that the City approves in writing a longer period of interruption after making a determination that there exists just cause for such longer period of interruption;

G. Failure to substantially meet customer service standards established in the franchise over any consecutive three-month period of time in accordance with Section 5.16.490;

H. Failure to initiate or complete system construction, or reconstruction within the time set forth in the franchise, unless the City Council expressly approves the delay by motion or resolution, due to the occurrence of conditions beyond grantee’s control;

I. Failure to provide or maintain in full force and effect at all times any insurance coverage, letter of credit or bonds required by the franchise agreement;

J. Violation of orders or rulings of any regulatory body having jurisdiction over grantee relating to the franchise;

K. Failure to provide, upon written request, data, documents, reports or information; and

L. Failure to pay debts and obligations as they mature in accordance with normal business practices; assignment of grantee or its assets for the benefit of its creditors; dissolution, liquidation or ceasing to conduct business; application by grantee for (or consent by grantee to) the appointment of a receiver, trustee, liquidator; or the filing of a bankruptcy petition by grantee to the extent permitted by federal law or the sale of all or substantially all of grantee’s assets.

A. Prior to imposing any liquidated damages, sanction or penalty upon grantee, including termination or revocation of the franchise, the City Manager, shall demand in writing that grantee cure such breach or diligently commence a cure of such breach within a specified period, which period shall not be less than 30 days following notification. However, only 15 days’ notice shall be required in the case of failure to pay monies due. In addition, the City may, in an emergency, prescribe a notice less than 30 days consistent with the nature of the emergency. An emergency under this subsection means an occurrence or condition that creates an actual or imminent danger to life or property.

B. Should grantee fail to provide sufficient written proof within the specified cure period that corrective action has been taken, or that corrective action is being actively and expeditiously pursued by grantee, then the City Manager may, in his or her sole discretion, elect to either place the issue of termination, revocation or other penalty before an appropriate hearing officer for his or her determination pursuant to Section 5.16.190 or the City Council pursuant to Section 5.16.200 of this chapter.

C. The City Council, the City Manager, or any hearing officer authorized to act pursuant to this chapter shall have the power to issue subpoenas in order to carry out the fact-finding activities authorized by this chapter. The process for the issuance and enforcement of such subpoenas shall be governed by the California Code of Civil Procedure.

A. The City Manager may, at his or her sole discretion and in lieu of the procedures set forth in Section 5.16.200, refer to a hearing officer any controversy or claim arising out of or relating to the franchise or its existence, construction, interpretation, performance, enforcement, operation, breach, continuance or termination. Such hearing proceedings shall be initiated by the City Manager by written notice to grantee.

B. The procedures set forth in Section 5.16.420(B)(2) shall govern the conduct of such administrative hearing.

C. The hearing officer shall be vested with quasi-judicial authority, and shall be authorized to:

1. Order grantee to undertake remedial action to cure any breach of its obligations under its franchise;

2. Assess liquidated damages and/or levy a penalty upon grantee in accordance with the terms of this chapter and the franchise agreement;

3. Determine that grantee has not violated any of its obligations under its franchise; and/or

4. Recommend to the City Council grounds for the revocation of the franchise.

D. Failure of grantee to fully and promptly comply with an order of a hearing officer shall be deemed a material breach of the franchise.

A. In the event the City Manager elects, in his or her sole and absolute discretion to refer a matter to the City Council pursuant to Section 5.16.180, the City Council shall hold a public hearing to determine whether grantee materially breached the franchise and the appropriate penalty to be imposed, if any, as a result of such breach. The City shall cause to be served upon grantee, at least 10 days prior to the date of such hearing, written notice of any intent to terminate the franchise and the time and place of the hearing. Grantee may appear at such hearing and present such evidence, orally or in writing that it deems relevant and appropriate to the Council’s deliberations. Based on the evidence presented at the hearing, the City Council shall determine, in writing, in its discretion whether or not a material breach occurred and whether to terminate the franchise or take other appropriate action.

B. Should the City Council find that there has been a material breach of the franchise, but that termination of the franchise is inappropriate, then the Council may assess and levy or impose such other relief as the Council deems appropriate, including, but not limited to, any relief specified in Sections 5.16.190(C), 5.16.210 or any combination thereof.

C. The City shall cause grantee to be served with written notice of any action taken by the City Council following such public hearing. The decision of the City Council as to such matters shall be final, but may be challenged by grantee in a court of competent jurisdiction.

D. Nothing herein is intended to limit the City Council’s right to make other determinations that are reasonably related to the franchise, or to seek any other appropriate relief to which the City may be entitled, at law or equity, as a result of any breach by grantee of its obligations under the franchise.

The hearing officer or City Council may impose the following penalties for any breach of the franchise, except any breach of subscriber service standards, which shall be governed by Section 5.16.490 of this chapter:

A. Up to $500.00 for each day of each material breach, or such other amount provided in the franchise agreement;

B. For a second material breach of the same nature occurring within 12 months where a fine or penalty was previously assessed, $1,000.00 for each day of each material breach;

C. For a third or further material breach of the same nature occurring within 12 months of the first such breach, where a fine or penalty was previously assessed, up to $2,000.00 for each day of each material breach.

The remedies provided in this chapter are cumulative and in addition to all other rights the City may have at law or equity or under the franchise agreement, including, but not limited, to liquidated damages, which remedies may be exercised at any time. In no event shall the amount of any insurance, bond, letter of credit or any other security instrument be construed to limit grantee’s liability for damages.

A. Subject to applicable law, in the event that a franchise is terminated, revoked, or is not renewed upon expiration, then grantee shall, upon demand of the City, and at its sole expense, promptly remove all or any portion of its cable system. In removing its cable system, grantee shall restore all streets to the City’s standard specifications and repair any damage to utilities or other infrastructure caused by such removal. The liability, indemnity, insurance, security fund and bonds required under the franchise shall continue in full force and effect until such removal is accepted as complete by the City.

B. Subject to applicable law, in the event that a franchise is not renewed and the City acquires ownership of a cable system or effects a transfer of ownership of a cable system to another person, any such acquisition or transfer shall be at fair market value, determined on the basis of the cable system valued as a going concern, but with no value allocated to the franchise itself. If a franchise is revoked for cause and the City acquires ownership of the cable system or effects a transfer of ownership of the cable system to another person, any such acquisition or transfer shall be at an equitable price. The value of a cable system (fair market value or equitable price) shall be determined by an appraisal committee consisting of three disinterested appraisers. The City and grantee shall each select one appraiser, and the two selected appraisers shall agree upon and appoint a third appraiser.

C. If a grantee’s plant, or a portion thereof, is deactivated for a continuous period of 30 days (except for reasons beyond the grantee’s control), and without prior written notice to and approval by the City, then the grantee must, at the City’s option and demand, and at the sole expense of the grantee, promptly remove all of the grantee’s property from any streets or other public rights-of-way. The grantee must promptly restore the streets or other public areas from which its property, including distribution facilities, has been removed to the condition existing prior to the grantee’s use.

D. The City may, upon written application by a grantee, approve the abandonment in place by a grantee of any property, under such terms and conditions as the City may approve. Upon City-approved abandonment in place of any property, the grantee must cause to be executed such instruments as the City may prescribe in order to transfer and convey ownership of the abandoned property to the City.

A. Subject to applicable provisions of the United States Bankruptcy Code, any franchise shall, at the option of the City, cease and terminate 120 days after the appointment of a receiver or trustee to take over and conduct the business of grantee whether in a receivership, reorganization, bankruptcy or other action or proceeding unless such receivership or trusteeship shall have been vacated prior to the expiration of said 120 days, or unless:

1. Such receiver or trustee shall have, within 120 days after his or her election or appointment, fully complied with all terms of the franchise and remedied all breaches of the franchise or provided a plan for the remedy of such breaches which is approved in writing by the City; and

2. Such receiver or trustee shall, within said 120 days, execute an agreement duly approved by the court having jurisdiction, under which such receiver or trustee agrees to be bound by each and every term, provision and limitation of the franchise.

B. Upon the foreclosure or other judicial sale of all or a substantial part of a cable system, grantee shall notify the City of such fact, and such notification shall be treated as a notification that a change in ownership of grantee has taken place and the provisions of this chapter governing such changes shall apply.

A. At no time shall grantee place cable underground without appropriate authorization from the City.

B. The cable system shall be placed underground in all portions of the franchise area where either telephone or electric lines are underground. Whenever the poles on which the cable system is constructed are eliminated, grantee shall concurrently replace its aerial facilities with underground facilities. At no time shall the cable system be the only aerial facility in any given area.

C. Where the cable system is installed underground, line extenders, amplifiers, taps, power supplies, traps and related electronic equipment and components may be placed in appropriate housings above the surface of the ground to the extent that the method employed is compliant with any and all applicable city, state, federal or other regulations, and consistent with any other generally applicable guidelines, policies or procedures that may, from time to time, be adopted by the City or other applicable government agency. Grantee shall provide a procedure for undergrounding taps and pedestals, the cost of which the subscriber will bear, and relocating the taps and pedestals within the technical constraints of the cable system.

Grantee shall be authorized to utilize existing poles, conduit, and other facilities of a public utility, but shall not be authorized to construct or install any new, different, or additional poles in any City streets without prior written approval by the City.

Grantee shall install and maintain its wires, cables, fixtures, and other equipment in accordance with applicable California Public Utilities Commission pole attachment standards, electrical codes and industry standards of the cable television industry generally applicable to the type of cable system which grantee has constructed, owns or operates any applicable pole agreements, and all franchise agreement requirements. Grantee shall adhere to all building and zoning regulations currently in force or hereafter enacted. Grantee shall repair and restore any cuts and/or trenching in the roadway or sidewalks to City standards. Grantee shall locate and maintain its lines, cables, and other appurtenances, on public property, in such a manner as to cause no unreasonable interference with the use of such public property by any person.

The City Engineer shall approve the location and method of construction of all underground facilities and equipment located on public rights-of-way (including any above-grade portion of such facilities and equipment). The City Engineer also shall approve the location and installation of all new aerial facilities. All construction shall be subject to City permit and inspection fees as may be required by other applicable laws or regulations.

Grantee shall file with the City "as-built" drawings of the entire cable system, excluding technical specifications. Additionally, within 30 days after completion of any material modification of the cable system (e.g., a system rebuild or distribution facility replacement), grantee shall file with the City "as-built" drawings, excluding technical specifications, of the modified cable system. The City may require that the "as-built" drawings be submitted in an electronic format specified by the City.

A. Grantee shall remove or relocate at its sole cost any facilities installed, used or maintained in connection with the franchise if and when such removal or relocation is made necessary by any project. For purposes of this section, the word "project" means any change of grade, alignment or width of any public street, way, alley or place, including, but not limited to, the construction of any subway or viaduct, that the City may initiate, either by or through itself or any redevelopment agency, community facility district, assessment district, undergrounding district, reimbursement agreement or generally applicable impact fee program.

B. In the event that such removal or relocation is required, grantee shall commence physical fieldwork on the removal or relocation on or before 120 days after written notice of such requirement is provided by the City Manager. If, despite its reasonable efforts, grantee is unable to commence removal or relocation within such period, grantee shall provide the City Manager with written notice explaining in detail the reasons for the delay and a date certain upon which such removal or relocation is expected to commence. Grantee shall diligently proceed and promptly complete all such removal or relocation after it is commenced.

Should grantee fail, refuse or neglect to properly perform any maintenance or construction work required by the franchise following due notice from the City and a reasonable opportunity to cure as provided for under this chapter, or should grantee fail to commence performance of such work within the required period of time, or fail to diligently proceed and promptly complete such work thereafter, the City Manager may, upon five days prior written notice to grantee (except in cases of emergency), cause such work or other act to be completed in whole or in part by the City forces or others, and upon so doing shall submit to grantee an itemized statement of the costs thereof. Grantee shall pay to the City the entire amount due, without offset or deduction, within 30 days from the date of such statement.

A. Grantee must maintain the necessary facilities, equipment, and personnel to comply with the following consumer protection and service standards under "normal operating conditions" as that term is defined below in subsection D:

1. Provide sufficient toll-free telephone line capacity during normal business hours to ensure that telephone calls are answered promptly. Telephone answer time by a customer service representative, including wait time, shall not exceed 30 seconds when the connection is made. Callers who must be transferred may not be required to wait more than 30 seconds before being connected to a service representative.

2. Under normal operating conditions, callers may not receive a busy signal more than three percent of the time, measured on a quarterly basis.

3. Provide emergency toll-free telephone line capacity on a 24-hour basis, including weekends and holidays. After normal business hours, the telephone calls may be answered by a service or an automated response system, including an answering machine. Calls received after normal business hours must be responded to by a trained company representative on the next business day.

4. Provide a conveniently located local business and service or payment office open during normal business hours at least eight hours daily on weekdays, and at least four hours weekly on evenings or weekends, and adequately staffed with trained customer service representatives to accept subscriber payments and to respond to service requests, inquiries, and complaints.

5. Provide an emergency system maintenance and repair staff, capable of responding to and repairing major system malfunctions on a 24-hour per day basis.

6. Maintain a trained installation staff to provide service to any subscriber requiring a standard installation within seven days after receipt of a request, or such longer time as may be requested by the subscriber, in all areas where trunk and feeder cable have been activated. "Standard installations" are those that are located up to 150 feet from the existing distribution system, unless otherwise defined in the franchise agreement.

7. The grantee must schedule, within a specified four-hour time period Monday through Saturday (legal holidays excluded), all appointments with subscribers for installation of service, service calls, and other activities at the subscriber’s location. The grantee may schedule installation and service calls outside of normal business hours for the convenience of the subscriber. The grantee may not cancel an appointment with a subscriber after the close of business on the business day prior to the scheduled appointment. If a grantee representative is delayed in keeping an appointment with a subscriber and will not be able to honor the scheduled appointment, the subscriber must be contacted prior to the time of the scheduled appointment, and the appointment must be rescheduled, as necessary, at a time that is convenient for the subscriber. The grantee must undertake appropriate quality control measures to ensure that the customer is satisfied with the work.

8. Subscribers who have experienced a late or a missed appointment due to the fault of the grantee will either receive an installation free of charge or a $20.00 credit.

9. Upon a subscriber’s request, the grantee will arrange for pickup or replacement of converters or other equipment provided by the grantee at the subscriber’s address within 14 days after the request is made if the subscriber is mobility-limited.

B. Under normal operating conditions, the standards of subsections (A)(1) through (4) and (A)(7) of this section must be met not less than 90% of the time, measured on a quarterly basis.

C. As used in subsection A of this section, the term "normal business hours" means those hours during which most similar businesses in the community are open to serve customers. In all cases, "normal business hours" must include some evening hours at least one night per week and/or some weekend hours.

D. As used in subsection A of this section, the term "normal operating conditions" means those service conditions that are within the control of the cable operator. Conditions that are not within the control of the cable operator include, but are not limited to, natural disasters, civil disturbances, power outages, telephone network outages, and severe or unusual weather conditions. Conditions that 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.

A. The grantee will render efficient service, make repairs promptly, and interrupt service only for good cause and for the shortest time possible. Except in emergency situations, scheduled interruptions will occur during a period of minimum use of the cable system, preferably between midnight and 6:00 a.m. Unless the scheduled interruption lasts for no more than two hours and occurs between midnight and 6:00 a.m. (in which event 24 hours’ prior notice must be given to the City), 48 hours’ prior notice must be given to subscribers.

B. The grantee will maintain a repair force of technicians who will respond to subscriber requests for service within the following time frames:

1. For a system outage: Within two hours, including weekends, of receiving subscriber calls or requests for service that by number identify a system outage of sound or picture of one or more channels, affecting five or more subscribers of the system.

2. For an isolated outage: Within 24 hours, including weekends, of receiving requests for service identifying an isolated outage of sound or picture for one or more channels.

3. For inferior signal quality: No later than the following business day, excluding Sundays and holidays, after a request for service identifying a problem concerning picture or sound quality.

C. The grantee will be deemed to have responded to a request for service under the provisions of subsection B of this section when a technician arrives at the service location and begins work on a problem that cannot be corrected from a remote location. If a subscriber is not home when the technician arrives, the technician must leave written notification of arrival.

D. The grantee may not charge for the repair or replacement of defective or malfunctioning equipment provided by the grantee to subscribers, unless the defect or malfunction was caused by the subscriber.

E. The grantee must determine the nature of the problem within 24 hours after commencing work and resolve all cable system related problems within three business days, unless technically infeasible.

A. Subscriber bills must be clear, concise, and understandable. Bills must be fully itemized, with itemizations including, but not limited to, basic and premium service charges and equipment charges. Bills also must clearly delineate all activity during the billing period, including optional charges, rebates and credits.

B. The first billing to a subscriber after a new installation or service change must be prorated based upon when the new or changed service commenced. Subscribers must not be charged a late fee or otherwise penalized for any failure attributable to the grantee, including the failure to timely or correctly bill the subscriber.

C. In case of a billing dispute, the grantee must respond in writing to a written complaint from a subscriber within 10 days after receiving the complaint at the office specified on the billing statement for receiving that complaint.

D. Upon request by a subscriber, credits or refunds must be provided by grantee to subscribers who experienced an outage, interruption, or disconnection of service of four or more consecutive hours, provided that such loss of service is neither caused by the subscriber nor attributable to scheduled repairs, maintenance, or construction in circumstances where grantee has provided advance written notice to a subscriber, and the loss of service does not exceed the time period specified by grantee. For subscribers terminating service, credits or refunds must be issued promptly, but no later than 30 days after the return of any grantee-supplied equipment.

E. The grantee must provide written information on each of the following matters at the time of the installation of service, at least annually to all subscribers, and at any time upon request:

1. Products and services offered;

2. Prices and options for programming services and conditions of subscription to programming and other services;

3. Installation and service maintenance policies;

4. Instructions on the use of the cable service;

5. Channel positions of programming carried on the system;

6. Billing and complaint procedures, including the address and telephone number of the City’s office designated for dealing with cable-related issues;

7. Consumer protection and service standards and penalties for noncompliance.

F. Subscribers must be notified of any changes in rates, programming services, or channel positions as soon as possible through announcements on the cable system and in writing. Notice must be given to subscribers a minimum of 30 days in advance of those changes if the change is within the control of the grantee. In addition, grantee will endeavor to notify the City of those changes at least five working days before subscribers are notified.

G. The grantee must maintain a public file containing all notices provided to subscribers under these consumer protection and service standards and all published promotional offers made by grantee to subscribers. These documents must be maintained for a minimum period of two years.

A. Upon 30 days’ prior written notice, the City may require the grantee to provide a written report demonstrating its compliance with any of the consumer service standards specified in this section. The grantee must provide sufficient documentation to enable the grantor to verify compliance.

B. A repeated and verifiable pattern of noncompliance with the consumer protection and service standards of this section, after the grantee’s receipt of written notice and an opportunity to cure, may be deemed a material breach of the franchise agreement.

A. The grantee must establish written procedures for receiving, acting upon, and resolving subscriber complaints without intervention by the City. The written procedures must prescribe the manner in which a subscriber may submit a complaint, either orally or in writing, specifying the subscriber’s grounds for dissatisfaction. The grantee must file a copy of these procedures with the City. These procedures must include a requirement that the grantee respond in writing to any written complaint from a subscriber within 10 days after receiving the complaint at the office specified on the billing statement for receiving that complaint, as provided for above in Section 5.16.320(A)(4) of this chapter.

B. Upon request, and subject to applicable law protecting subscriber privacy rights, the City has the right to review the grantee’s response to subscriber complaints.

C. All subscribers have the right to continue receiving service so long as their financial and other obligations to the grantee are honored. If the grantee elects to rebuild, modify, or sell the system, or if the City gives notice of intent to terminate or not to renew the franchise, the grantee must act so as to ensure that all subscribers receive service while the franchise remains in force.

D. Upon a change of control of the grantee, or if a new operator acquires the cable system, the original grantee must cooperate with the City, the new grantee, or the new operator in maintaining continuity of service to all subscribers. During that transition period, the grantee is entitled to the revenues derived from its operation of the cable system.

A. A subscriber may terminate or downgrade service at any time, and the grantee must promptly comply with the subscriber’s request within seven days or at any later time requested by the subscriber. No period of notice prior to voluntary termination or downgrade of service may be required of subscribers. Grantee will impose no charges for the voluntary termination or downgrade of service unless a visit to the subscriber’s premises is required to remove a converter box or other equipment or property owned by grantee. Grantee may, in accordance with applicable law, charge a fee to downgrade service if a service call is required.

B. The grantee may disconnect a subscriber’s service in compliance with paragraphs (i), (j), and (k) of Section 53088.2 of the California Government Code. If service is disconnected for nonpayment of past due fees or charges, the grantee must promptly reinstate service upon payment in full by the subscriber of all such fees and charges, including late charges.

C. Notwithstanding the requirements of subsection B of this section, the grantee may immediately disconnect service to a subscriber if the subscriber is damaging or destroying the grantee’s cable system or equipment.

D. The grantee may also disconnect service to a subscriber when it causes signal leakage exceeding federal limits. If service is disconnected, the grantee will immediately resume service without charge upon the satisfactory correction of the signal leakage problem if the signal leakage problem is attributable to the grantee.

E. The grantee may also disconnect service in case where customers are stealing service or have threatened grantee’s personnel with physical violence.

F. Upon termination of service to a subscriber, the grantee will remove its equipment from the subscriber’s premises within 30 days. The equipment will be deemed abandoned if it is not removed within such time period unless the grantee has been denied access to the subscriber’s premises.

No charge may be imposed for any service or equipment that the subscriber has not affirmatively selected. Payment of the regular monthly bill will not by itself constitute an affirmative selection.

Grantee may require a reasonable, nondiscriminatory deposit on equipment provided to subscribers. Such deposits must be placed in an interest-bearing account. The deposit must be returned, with interest earned to the date of repayment, within 30 days after the equipment is returned to the grantee.

Grantee must provide parental control devices at no charge to all subscribers who desire to block the video or audio portion of any pay channels providing adult programming that the subscriber finds objectionable. For other programming, such devices will be provided at a reasonable charge to the subscriber.

A. All officers, agents, and employees of the grantee, or of its contractors or subcontractors, who, in the normal course of work come into contact with members of the public, or who require entry onto subscribers’ premises, must display a photo-identification card. The grantee must account for all identification cards at all times. All vehicles of the grantee or its subcontractors must be clearly identified as vehicles engaged in providing services for the grantee.

B. Additional standards relating to service, consumer protection, and response by the grantee to subscriber complaints not otherwise provided for in this section may be adopted by ordinance, and the grantee must comply with those standards in the operation of the cable television system. A verified and continuing pattern of noncompliance may be deemed a material breach of the franchise agreement, provided that the grantee receives written notice and an opportunity to cure before any penalty or other remedy is imposed.

A. Purpose. The purpose of this section is to authorize the imposition of monetary penalties for the violation of the customer service standards established by this chapter. The imposition of penalties authorized by this section will not prevent the City or any other affected party from exercising any other remedy to the extent permitted by law, including, but not limited to, any judicial remedy as provided in subsection (B)(4) of this section or otherwise by this chapter.

B. Administration and Appeals.

1. The City Manager or the City Manager’s designee is authorized to administer this section. Decisions by the City Manager to assess monetary penalties against the grantee must be in writing and must contain findings supporting the decisions. The written decision shall be filed with the City Clerk and a copy thereof shall be served on the appellant in accordance with Section 1094.6 of the California Code of Civil Procedure.

2. If the grantee or any interested person ("appellant") is aggrieved by a decision of the City Manager made pursuant to this section, the aggrieved party may, within 10 days of the written decision, appeal that decision in writing to the City Clerk. Such appeal shall be in a form prescribed by the City Clerk. The appeal letter must be accompanied by the fee established by the City Council for processing the appeal. The City Clerk will refer the matter to the City Manager who will initiate the administrative hearing process outlined below:

a. The hearing officer shall be selected by the City Manager and compensated for the time expended in providing such service based upon a written agreement for that purpose. The hearing officer’s employment or compensation shall not be based on the outcome rendered by the hearing officer. If the appellant so elects in writing prior to the hearing, the appellant shall be entitled to pay for one-half of the costs of the services of the hearing officer.

b. The hearing shall be conducted by the hearing officer on the date, time and place specified by the hearing officer. The hearing shall proceed solely on the issues or defenses raised in the request for a hearing filed by the appellant; and all matters not contested in said request shall be deemed admitted.

c. The appellant shall have the burden to establish, by a preponderance of the evidence, that either: (i) the City Manager has proceeded without, or in excess of jurisdiction; (ii) there was not a fair trial; or (iii) there was any prejudicial abuse of discretion. Abuse of discretion is established if the City Manager has not proceeded in the manner required by law, the decision is not supported by the findings, or the findings are not supported by the evidence. The City Manager’s written decision and findings shall be admitted into evidence and shall constitute prima facie evidence of all matters contained therein. The parties may present such other evidence and reports as may be necessary or helpful to the hearing officer to resolve the issues raised by the citee.

d. The parties shall be given the opportunity to testify and to present evidence relevant to the matters raised in the appeal.

e. The City Manager’s written decision and findings, and other reports prepared by the City Manager, or at his or her request, concerning the alleged violation or violations or their attempted correction shall be accepted by the hearing officer as prima facie evidence of the violation or violations.

f. The hearing shall be conducted informally and the rules of evidence need not be followed; provided however that the decision of the hearing officer on any material issue may not be based upon hearsay evidence alone. The hearing officer may adopt such supplementary rules of procedure and evidence as may be useful in a determination of the issues involved, to the extent such rules are not otherwise provided for herein.

g. The failure of the appellant to appear at the hearing shall constitute a waiver of his or her contest to the City Manager’s decision and a failure to exhaust administrative remedies concerning the City Manager’s decision. Such failure to appear shall constitute an admission of the truth of all matters contained in the City Manager’s decision, which shall be ordered in the decision of the hearing officer.

h. The hearing officer may continue the hearing upon the request of the appellant, or the appellant’s representative, or the representative of the City, or on the hearing officer’s own motion, upon a showing of good cause. All continuance requests shall be made in writing. If the continuance is granted, a new hearing date shall be set, which continued hearing date shall be within 15 days.

i. After considering all the evidence and testimony submitted at the hearing, the hearing officer shall issue his or her written decision within five business days following the conclusion of the hearing. The decision of the hearing officer shall, either uphold or deny the City Manager’s decision or any portion thereof and state the facts and reasons supporting the decision. The hearing officer also shall order any remedy necessary to effectuate the hearing officer’s decision, including, but not limited to, a revision of the amount of money owed by the grantee after due consideration of the circumstances pursuant to paragraph (B)(6)(b) of this section. The written decision shall be filed with the City Clerk and a copy thereof shall be served on the appellant in accordance with Section 1094.6 of the California Code of Civil Procedure.

j. All decisions and orders of a hearing officer shall become final unless appealed as provided herein.

k. The appellant or the City may seek judicial review of the decision of the hearing officer by filing an appeal with the superior court within 90 days in accordance with applicable law, including the provisions of California Code of Civil Procedure Section 1094.6. No appeal shall be permitted from a decision based upon the failure of the appellant to appear at the administrative hearing or upon any other waiver of the administrative hearing by the appellant.

l. If an appeal of any decision or order of a hearing officer that ordered the appellant to pay any amount due is affirmed by the reviewing court, in whole or part, the court shall enter an order requiring the appellant to pay such amount and said order shall constitute a money judgment.

3. Schedule of Penalties. The following schedule of monetary penalties may be assessed against the grantee for the material violation of the provisions of the customer service standards set forth in this section, provided that the violation is within the reasonable control of the grantee:

a. The maximum penalty for a first material violation is $200.00 for each day of the material violation.

b. For a second material violation of the same nature within a 12-month period for which the City has provided notice and a penalty has been assessed, the maximum penalty is $500.00 for each day of the material violation.

c. For a third or further material violation of the same nature within a 12-month period for which the City has provided notice and a penalty has been assessed, the maximum penalty is $750.00 for each day of the material violation.

4. Judicial Remedy. This paragraph does not preclude any affected party from pursuing any judicial remedy available to that party without regard to this subsection.

5. Notice of Violation. The City must give the grantee written notice of any alleged violation of the consumer service standards and allow the grantee at least 30 days from receipt of the notice to remedy the specified violation.

6. Assessment of Monetary Penalties.

a. If a violation has not been corrected or cured by grantee within the time specified by the City, the monetary penalties specified above in subsection (B)(3)(c) of this section may be assessed from the date of delivery to grantee of the City’s written notice of violation.

b. In assessing monetary penalties under subsection (B)(2)(k) of this section, the City Manager, hearing officer, or the City Council, as applicable, may take into account the nature, circumstances, extent and gravity of the violation and, with respect to the grantee, the degree of culpability, any history of prior violations, and such other matters as may be relevant. If warranted under the circumstances, the monetary penalty to be assessed may be less than the maximum penalty amount specified above in subsection (B)(3)(c) of this section.

A. In addition to the consumer protection and service standards that are specified in Sections 5.15.320 through 5.16.500 of this chapter, the franchise agreement with a grantee may require compliance with the following:

1. Federal statutes, and the rules, regulations, and orders of the Federal Communications Commission, including the following:

a. The provisions of Section 76.309(c) of Title 47 of the Code of Federal Regulations, as it now exists or may later be amended;

b. The provisions of Section 76.630 of Title 47 of the Code of Federal Regulations, as it now exists or may later be amended;

c. The provisions of Section 551 of Title 47, United States Code, as it now exists or may later be amended;

d. The provisions of California Government Code Section 53054, et seq., entitled the "Cable Television and Video Provider Customer Service and Information Act";

e. The provisions of California Government Code Section 53088, et seq., entitled the "Video Customer Service Act";

f. The provisions of California Civil Code Section 1722(b)(1) through (6) relating to service or repair transactions between cable television companies and their subscribers;

g. The provisions of California Penal Code Section 637.5 relating to subscribers’ rights to privacy protection.

B. The City may, in its discretion, incorporate in a franchise agreement those customer service and protection standards referenced in subsection A of this section that are the most stringent, and that afford the greatest protection to consumers. These standards will apply, to the extent authorized by law, to all video, voice, and data services that are provided by the grantee to its subscribers within the franchise service area.

A. The grantee shall not scramble or otherwise encrypt signals carried on the basic service tier. Requests for waivers of this prohibition must demonstrate either a substantial problem with theft of basic tier service or a strong need to scramble basic signals for other reasons.

B. The grantee shall comply with equipment compatibility rules and commercial availability of navigation equipment rules of the FCC.

C. The grantee shall offer subscribers the option to receive an A/B switch at the time of initial cable service installation and shall provide subscribers with written information as to how to use such a switch. The grantee may charge a reasonable price for said switch. Upon subscriber request, the grantee shall provide an A/B switch after the initial installation of cable service. If the subscriber requests installation of such a switch (to receive broadcast television without cable hookup), the grantee may charge reasonable fees for such installation and equipment.

The City may regulate a grantee’s rates, charges, and prices to the maximum extent permitted by law now or at a future time.

A. Filing of Rates and Charges. Throughout the term of any franchise agreement entered into pursuant to this chapter, grantee shall maintain on file with the City a complete schedule of all rates and charges related to providing cable services under the franchise, in a form satisfactory to the City.

B. Changes in Rates and Charges. Grantee shall provide written notice to the City and subscribers at least 30 days in advance of any proposed change in rates and charges within the control of grantee. Such notice shall be provided in the subscriber’s bill, or in a separate mailing.

C. Regulation of Equipment for Hearing-Impaired. To the extent authorized by law, the City reserves the right to require and regulate the installation or rental of equipment that facilitates the reception of cable service by hearing impaired individuals.

Billing procedures shall be as follows:

A. Bills will be clear, concise and understandable. Bills must be fully itemized, with itemizations including, but not limited to, basic and premium service charges and equipment charges. Bills will also clearly delineate all activity during the billing period, including:

1. A list of each service or package received for that billing period;

2. The rate or charge for each service or package received;

3. The period of time over which said services are billed;

4. The total charges due for the monthly period, separate from any previous balance due;

5. Credits posted during the month: Credits for service will be issued no later than the subscriber’s next billing cycle following the determination that a credit is warranted;

6. A specific date by which payment is required; and

7. The customer service telephone number to which billing inquiries or complaints can be directed.

B. A grantee’s first billing statement after a new installation or service change shall be prorated as appropriate and shall reflect any security deposit.

C. A grantee’s billing statement must show a specific payment due date, and no late payment fee may be imposed on a subscriber earlier than 30 calendar days from the due date on the billing statement. Any balance not received within 30 calendar days of the due date may be assessed a late fee consistent with this chapter. Any late fee assessed must appear on the following month’s billing statement.

D. A grantee must notify the subscriber that he or she can remit payment in person at the grantee’s office located in or near the City and inform the subscriber of the address of that office.

E. Every customer who pays his or her bill directly shall have at least 15 days from the date of the bill for services is mailed to pay the listed charges. Customer payments shall be posted promptly. The grantee shall not terminate any residential service for nonpayment of a delinquent account without 15 days’ prior written notice. Such notice shall not be mailed until after the 16th day from the time the bill for services was mailed to the customer. The grantee may not assess a late charge earlier than the 22nd day from the time the bill for services has been mailed.

F. In case of a billing dispute, the grantee must respond to a written complaint from a subscriber within 30 days.

G. At the time of the initial complaint, grantee shall provide written or verbal notice to customers that in the event of a billing dispute, the grantee, upon resolution of the dispute when grantee is at fault, shall waive a late fee.

H. Subscribers shall not be charged a late fee or otherwise penalized for any failure by the grantee, its employees, or contractors, including failure to timely or correctly bill the subscriber, or failure to properly credit the subscribers for a payment made in a timely manner.

I. Every notice of termination of service shall include: name and address of subscriber whose account is delinquent; the amount of the delinquency; the date by which payment is required in order to avoid termination of service; the telephone number of the grantee for additional information and/or to handle complaints or initiate an investigation concerning service and charges in question.

J. Service may only be terminated on days and at times in which the subscriber can reach a customer service representative of the grantee either in person or by telephone.

K. The grantee shall afford each subscriber of the cable system with a right to rescind the subscriber’s ordering of service within three days after ordering, provided that such right of rescission shall end upon activation of the service ordered.

L. The grantee shall assess any late fees in accordance with California law. In no event shall a late fee exceed the maximum amount permissible under California law.

M. Any franchise agreement entered into pursuant to this chapter may contain provisions for a discount on basic and cable programming tiers or any other cable services for persons with specific income and disability qualifications.

N. Grantee will set rates for equipment deposits no higher than the actual replacement value of the equipment for which the deposit is applied. Equipment deposits shall be promptly returned to subscribers upon the return in good working condition to the grantee of the equipment for which said deposit was required.

A. Refund checks will be issued promptly, but no later than either:

1. The subscriber’s next billing cycle following resolution of the request or 30 days, whichever is earlier; or

2. In cases involving the return of the equipment supplied by the grantee if service is terminated for any reason, by the subscriber’s next billing cycle following resolution of the request or 30 days, whichever is earlier.

B. If the grantee does not mail a check for a refund to any subscriber disconnecting service with an outstanding credit within the next billing cycle or 30 days, whichever is earlier, the subscriber may request and is entitled to receive a $10.00 payment.

Grantee shall provide written notice to the City and subscribers at least 30 days in advance of the implementation of changes in any of its rates and charges which are not subject to regulation by the City.

A. Service Availability.

1. No person, firm or corporation in the existing service area of a grantee shall be arbitrarily refused service; provided, however, that the grantee shall not be required to provide service to any subscriber who does not pay the applicable connection fee or monthly service charge hereby authorized.

2. A grantee may not require the subscription to any tier other than the basic service tier as a condition of access to video programming offered on a per channel or per program basis. A grantee may not discriminate between subscribers to the basic service tier and other subscribers with regard to the rates charged for video programming offered on a per channel or per program basis.

3. A grantee will abide by all customer privacy requirements of federal and state law. At least annually, a grantee shall provide notice in the form of a separate, written statement to each subscriber, which clearly and conspicuously informs the subscriber of:

a. The nature of personally identifiable information collected or to be collected with respect to the subscriber and the nature of the use of such information;

b. The nature, frequency and purpose of any disclosure, which may be made of such information, including the identification of the types of persons to whom the disclosure may be made;

c. The period during which such information will be maintained by the grantee;

d. The times and place at which the subscriber may have access to such information in accordance with federal and state law; and

e. The limitations provided in federal and state law with respect to the collection and disclosure of information by a grantee and the right of the subscriber under law.

B. Data Collection. A grantee’s data collection and dissemination practices regarding subscribers shall be in compliance with the Cable Act (including Section 631) and this chapter.

C. Revealing Subscriber Preferences.

1. A grantee shall not reveal individual subscriber preferences, viewing habits, beliefs, philosophy, creeds or religious beliefs to any third person, firm, agency, governmental unit or investigating agency without court authority or prior written consent of the subscriber.

2. Such written consent, if given, shall be limited to a period of time not to exceed one year or a term agreed upon by the grantee and subscriber.

3. A grantee shall not condition the delivery or receipt of cable services to any subscriber on any such consent.

4. Such a subscriber may revoke without penalty or cost any consent previously made by delivering to the grantee in writing a substantial indication of his or her intent to so revoke.

D. Revealing Subscriber Lists. A grantee shall not reveal, or sell, or permit the release or sale of its subscriber list without the prior affirmative written consent of each subscriber, provided that the grantee may use its subscriber list as necessary for the construction, marketing, and maintenance of the grantee’s services and facilities authorized by its franchise, and the related billing of subscribers for cable services. Consistent with applicable law, the City may use grantee’s subscribers list for the purpose of communication with subscribers in connection with matters relating to operation, management, and maintenance of the cable system.

E. Other Persons Affected. This section shall apply to all of the following as well as to any grantee:

1. Officers, directors, employees and agents of the grantee;

2. General and limited partners of the grantee;

3. Any person or combination of persons owning, holding or controlling five percent or more of any corporate stock or other ownership interest of the grantee;

4. Any affiliated or subsidiary entity owned or controlled by the grantee, or in which any officer, director, stockholder, general or limited partner or person or group of persons owning, holding or controlling any ownership interest in the grantee, shall own, hold or control five percent or more of any corporate stock or other ownership interest;

5. Any person, firm or corporation acting or serving in the capability of holding or controlling company of the grantee.

Under normal operating conditions, grantee shall provide written or oral notice, in light of circumstances, prior to entering any private property.

Subscribers shall be given at least 30 days’ written notice of any scrambling of a channel, and any de-scrambling of a channel(s) containing R-rated or stronger programming. Subscribers do not need to be notified of blackout periods required of the grantee by programmers.

It is the City’s intent that tenants not be discriminated against in the ability to subscribe to cable services. Grantee shall be required to provide service to tenants in individual units of a multiple housing facility with all services offered to other dwelling units within the franchise area, so long as the owner of the facility consents in writing, if requested by grantee, to the following:

A. Grantee’s providing the service to units of the facility on such terms and conditions as are reasonable, provided that:

1. The owner of the facility shall not seek to charge grantee any fee or consideration for access to the facility or for the right of providing cable service to the dwelling units within the facility,

2. Grantee shall not seek to charge the owner of the facility any fee or consideration for installing such service other than its actual costs as provided for herein, and

3. Such terms and conditions shall be in compliance with applicable law;

B. Reasonable access to the premises by grantee for installation, maintenance, and inspection of the system on the premises;

C. Reasonable conditions promulgated by grantee to protect grantee’s equipment and to encourage widespread use of the system;

D. The owner shall not discriminate in rental charges, or otherwise, between tenants who receive cable service and those who do not; and

E. The owner shall provide all easements, rights-of-way, and other rights of access deemed reasonably necessary or appropriate by grantee for purposes of providing cable television service to the facility.

A. Subscribers shall have the right to continue to receive service so long as their financial and other obligations to grantee are honored. Grantee shall at all times, and under all conditions, to the greatest extent economically and technically possible, maintain continuity of service. In the event of an assignment of the cable system, the assignor shall cooperate with the City and the assignee in order to maintain continuity of service to all subscribers.

B. In the event grantee wilfully fails to operate the cable system for a period of five consecutive days without prior approval of the City, the City may, in its sole discretion, elect to operate the cable system or designate an operator until grantee restores service under conditions acceptable to the City, or until the City selects a permanent operator. During the entire period while the City operates the cable system on behalf of grantee, or causes another party to do so, the City shall be entitled to collect any and all revenues from the operation of the cable system, and grantee shall reimburse the City for all reasonable costs or damages in excess of the revenues collected by the City that are caused by grantee’s failure to perform.

The provisions of this chapter apply to an open video system operator that intends to deliver video programming to consumers in the City over an open video system.

A. Before commencing the delivery of video programming services to consumers in the City over an open video system, the open video system operator must file an application with the City. That application must include or be accompanied by the following, as applicable:

1. The identity of the applicant, including all affiliates of the applicant;

2. Copies of FCC Form 1275, all "Notices of Intent" filed under 47 CFR Section 76.1503(b)(1), and the order of the FCC, all of which relate to certification of the applicant to operate an open video system in accordance with Section 653(a)(1) of the Communications Act and the FCC’s rules;

3. The area or areas of the City that the applicant desires to serve;

4. A description of the open video system services that will be offered by the applicant over its existing or proposed facilities;

5. A description of the transmission medium that will be used by the applicant to deliver the open video system services;

6. Information in sufficient detail to establish the applicant’s technical qualifications, experience, and expertise regarding the ownership and operation of the open video system described in the application;

7. Financial statements prepared in accordance with generally accepted accounting principles that demonstrate the applicant’s financial ability to:

a. Construct, operate, maintain and remove any new physical plant that is proposed to be constructed in the City,

b. Comply with the City’s public, educational, and government access channel requirements as specified in Section 5.16.570(B)(4) of this chapter,

c. Comply with the City’s requirement that gross revenue fees be paid in the sum of five percent, as specified in Section 5.16.570(B)(2) of this chapter;

8. An accurate map showing the location of any existing telecommunications facilities in the City that the applicant intends to use, to purchase, or to lease;

9. If the applicant’s operation of the open video system will require the construction of new physical plant in the City, the following additional information must be provided:

a. A preliminary construction schedule and completion dates,

b. Preliminary engineering plans, specifications, and a network map of any new facilities to be constructed in the City, in sufficient detail to identify:

i. The location and route requested for the applicant’s proposed facilities,

ii. The locations, if any, for interconnection with the facilities of other telecommunications service providers,

iii. The specific structures, improvements, facilities, and obstructions, if any, that the applicant proposes to remove or relocate on a temporary or permanent basis;

c. The applicant’s statement that, in constructing any new physical plant, the applicant will comply with all applicable ordinances, rules, and regulations of the City, including the payment of all required permit and processing fees;

10. The information and documentation that is required to be submitted to the City by a video provider, as specified below in Section 5.16.590(B) of this chapter;

11. Such additional information as may be requested by the City Manager;

12. A nonrefundable filing fee in an amount established by resolution of the City Council.

B. If any item of information specified above in subsection A of this section is determined under paramount federal or state law to be unlawful, the City Manager is authorized to waive the requirement that such information be included in the application.

Within 30 days after receipt of an application filed under Section 5.16.550 of this chapter that is deemed to be complete, the City Manager will give written notice to the applicant of the City’s intent to negotiate an agreement setting forth the terms and conditions under which the operation of the proposed open video system will be authorized by the City. The commencement of those negotiations will be on a date that is mutually acceptable to the City and to the applicant.

A. No video programming services may be provided in the City by an open video system operator unless the operator and the City have executed a written agreement, which may be designated as a franchise, setting forth the terms and conditions under which the operation of the proposed open video system will be authorized by the City.

B. The agreement between the City and the open video system operator may contain terms and conditions that relate to the following subject matters, to the extent that such terms, conditions, and subject matters are not preempted by federal statute or regulations:

1. The nature, scope, and duration of the agreement, including provisions for its renewal or extension.

2. The obligation of the open video system operator to pay to the City, at specified times, fees on the gross revenue received by the operator, as authorized by 47 CFR Section 76.1511, in accordance with the following standards and procedures:

a. The amount of the fees on the gross revenue will be five percent, and will be paid in lieu of the franchise fees authorized under Section 622 of the Communications Act.

b. The term "OVS gross revenue" means all gross revenue as defined in Section 5.16.020 of this chapter and (i) all revenue and all carriage revenue received from unaffiliated video programming providers; and (ii) all other revenue derived directly or indirectly from or attributable to the operation of open video system. The term "OVS gross revenue" does not include revenue, such as subscriber or advertising revenue, collected by unaffiliated video programming providers and other exclusions described in the definition of "gross revenues" defined within Section 5.16.020 of this chapter.

3. The obligation of the open video system operator to comply with requirements relating to information collection and recordkeeping, accounting procedures, reporting, periodic audits, and inspection of records in order to ensure the accuracy of the fees on the OVS gross revenue that are required to be paid as specified above in subsection (B)(2) of this section.

4. The obligation of the open video system operator to meet the City’s requirements with respect to public, educational, and governmental access channel capacity, services, facilities, and equipment, as provided for in 47 CFR Section 76.1505. In this regard, the following standards and procedures are applicable:

a. The open video system operator is subject to the same public, educational, and governmental access channel requirements that apply within the cable television franchise service area with which its system overlaps.

b. The open video system operator must ensure that all subscribers receive all public, educational, and government access channels within the franchise service area in which the City’s subscribers are located.

c. The open video system operator may negotiate with the City to establish the operator’s obligations with respect to public, educational, and government access channel capacity, services, facilities, and equipment. These negotiations may include the City’s franchised cable operator if the City, the open video system operator, and the franchised cable operator so desire.

d. If the open video system operator and the City are unable to reach an agreement regarding the operator’s obligations with respect to public, educational, and government access channel capacity, services, facilities, and equipment within the City’s jurisdiction, then the following obligations will be imposed:

i. The open video system operator must satisfy the same public, educational, and government access channel obligations as the City’s franchised cable operator by providing the same amount of channel capacity for public, educational, and governmental access and by matching the City’s franchised cable operator’s annual financial contributions in support of public, educational, and government access services, facilities, and equipment that are actually used by the City. For in-kind contributions, such as cameras or production studios, the open video system operator may satisfy its statutory obligation by negotiating mutually agreeable terms with the City’s franchised cable operator, so that public, educational, and governmental access services to the City are improved or increased. If such terms cannot be agreed upon, the open video system operator must pay to the City the monetary equivalent of the franchised cable operator’s depreciated in-kind contribution, or, in the case of facilities, the annual amortization value. Any matching contributions provided by the open video system operator must be used to fund activities arising under Section 611 of the Communications Act.

ii. The City will impose upon the open video system operator the same rules and procedures that it imposes upon the franchised cable operator with regard to the open video system operator’s use of channel capacity designated for public, educational, and government access channel use when that capacity is not being used for such purposes.

e. The City’s franchised cable operator is required under federal law to permit the open video system operator to connect with its public, educational, and government access channel feeds. The open video system operator and the franchised cable operator may decide how to accomplish this connection, taking into consideration the physical and technical characteristics of the cable and the open video systems involved. If the franchised cable operator and the open video system operator cannot agree on how to accomplish the connection, the City has the right to decide. The City may require that the connection occur on City-owned property or on public rights-of-way.

f. All costs of connection to the franchised cable operator’s public, educational, and government access channel feed must be borne by the open video system operator. These costs will be counted towards the open video system operator’s matching financial contributions set forth in paragraph (d)(i) of subsection (B)(4) of this section.

g. The City will not impose upon the open video system operator any public, educational, or government access channel obligations that are more favorable or less burdensome than those imposed upon the franchised cable operator.

h. If there is no existing franchised cable operator, the provisions of 47 CFR Section 76.1505(d)(6) will be applicable in determining the obligations of the open video system operator.

i. The open video system operator must adjust its system to comply with new public, education, and access channel obligations imposed on the City’s franchised cable operator following a renewal of the cable television franchise; provided, however, that the open video system operator will not be required to displace other programmers using its open video system to accommodate public, educational, and government access channels. The open video system operator must comply with such new public, educational, and government access channel obligations whenever additional capacity is or becomes available, whether it is due to increased channel capacity or to decreased demand for channel capacity.

5. If the City and the open video system operator cannot agree on the application of the FCC’s rules regarding the open video system operator’s obligations to provide public, educational, and government access channel under the provisions of subsection (B)(4) of this section, then either party may file a complaint with the FCC in accordance with the dispute resolution procedures set forth in 47 CFR Section 76.1514. No agreement will be executed by the City until the dispute has been finally resolved.

6. If the open video system operator intends to maintain an institutional network, as defined in Section 611(f) of the Communications Act, the City will require that educational and government access channels be designated on that institutional network to the same extent that those channels are designated on the institutional network of the City’s franchised cable operator. In addition, to the extent authorized by federal law, the open video system operator may be required by the City to satisfy the same financial obligations and other requirements that are imposed upon the franchised cable operator to support data-transmission and related services that are provided by the institutional network.

7. The authority of an open video system provider to exercise editorial control over any public, educational, or government use of channel capacity will be restricted in accordance with the provisions of 47 CFR Section 76.1505(f).

8. The obligation of the open video system operator to comply with all applicable federal, state, and local statutes, ordinances, and regulations relating to customer service standards, including the Cable Television and Video Customer Service and Information Act (Government Code Section 53054, et seq.), the Video Customer Service Act (Government Code Section 53088, et seq.).

9. If a new physical plant is proposed to be constructed within the City, the obligation of the open video system operator to comply with the following rights-of-way use and management responsibilities that are also imposed by the City upon other telecommunications service providers in a nondiscriminatory and competitively neutral manner:

a. Compliance with all applicable City codes, including applications for excavation, encroachment, and construction permits and the payment of all required permit and inspection fees;

b. The coordination of construction activities;

c. Compliance with established standards and procedures for constructing lines across private property;

d. Compliance with all applicable insurance and indemnification requirements;

e. The repair and resurfacing of construction-damaged streets;

f. Compliance with all public safety requirements that are applicable to telecommunications service providers using public property or public rights-of-way.

10. Acts or omissions constituting breaches or defaults of the agreement, and the applicable penalties, liquidated damages, and other remedies, including fines or the suspension, revocation, or termination of the agreement.

11. Requirements relating to the sale, assignment, or transfer of the open video system.

12. Requirements relating to the open video system operator’s compliance with and implementation of state and federal laws, rules, and regulations pertaining to the operation of the open video system.

13. Such additional requirements, conditions, terms, policies, and procedures as may be mutually agreed upon by the City and the open video system operator and that will, in the judgment of the City Council, best serve the public interest and protect the public health, welfare, and safety.

A. The term "cable system" does not include a facility that serves subscribers without using any public rights-of-way. Consequently, the categories of multichannel video programming distributors identified below are not deemed to be "cable systems" and are therefore exempt from the City’s franchise requirements and from certain other local regulatory provisions authorized by federal law, provided that their distribution or transmission facilities do not involve the use of the City’s public rights-of-way.

B. Multichannel multipoint distribution service ("MMDS"), also known as "wireless cable," which typically involves the transmission by an FCC-licensed operator of numerous broadcast stations from a central location using line-of-sight technology.

C. Local multipoint distribution service ("LMDS"), another form of over-the-air, wireless video service for which licenses are auctioned by the FCC, and that offers video programming, telephone, and data networking services.

D. Direct broadcast satellite ("DBS"), also referred to as "direct-to-home satellite services," which involves the distribution or broadcasting of programming or services by satellite directly to the subscriber’s premises without the use of ground receiving or distribution equipment, except at the subscriber’s premises or in the uplink process to the satellite. Local regulation of direct-to-home satellite services is further proscribed by the following federal statutory provisions:

1. 47 U.S.C. Section 303(v) confers upon the FCC exclusive jurisdiction to regulate the provision of direct-to-home satellite services.

2. Section 602 of the Communications Act states that a provider of direct-to-home satellite service is exempt from the collection or remittance, or both, of any tax or fee imposed by any local taxing jurisdiction on direct-to-home satellite service. The terms "tax" and "fee" are defined by federal statute to mean any local sales tax, local use tax, local intangible tax, local income tax, business license tax, utility tax, privilege tax, gross receipts tax, excise tax, franchise fees, local telecommunications tax, or any other tax, license, or fee that is imposed for the privilege of doing business, regulating, or raising revenue for a local taxing jurisdiction.

A. Unless the customer protection and customer service obligations of a video provider are specified in a franchise, with the City, a video provider must comply with all applicable provisions of the following state statutes:

1. The Cable Television and Video Customer Service and Information Act (Government Code Section 53054, et seq.);

2. The Video Customer Service Act (Government Code Section 53088, et seq.).

B. All video providers that are operating in the City on the effective date of the ordinance codified in this chapter, or that intend to operate in the City after the effective date of the ordinance codified in this chapter, and are not required under applicable law to operate under a franchise, license, lease, or similar written agreement with the City, must register with the City. The registration form must include or be accompanied by the following:

1. The video provider’s name, address and local telephone numbers;

2. The names of the officers of the video provider;

3. A copy of the video provider’s written policies and procedures relating to customer service standards and the handling of customer complaints, as required by California Government Code Section 53054, et seq. These customer service standards must include, without limitation, standards regarding the following:

a. Installation, disconnection, service and repair obligations, employee identification, and service call response time and scheduling,

b. Customer telephone and office hours,

c. Procedures for billing, charges, refunds and credits,

d. Procedures for termination of service,

e. Notice of the deletion of a programming service, the changing of channel assignments, or an increase in rates,

f. Complaint procedures and procedures for bill dispute resolution,

g. The video provider’s written acknowledgment of its obligation under California Government Code Section 53055.1 to provide to new customers a notice describing the customer service standards specified above in paragraphs (a) through (f) at the time of installation or when service is initiated. The notice must also include, in addition to all of the information described above in paragraphs (a) through (f), all of the following:

i. A listing of the services offered by the video provider that clearly describes all levels of service and the rates for each level of service,

ii. The telephone number or numbers through which customers may subscribe to, change, or terminate service, request customer service, or seek general or billing information,

iii. A description of the rights and remedies that the video provider may make available to its customers if the video provider does not materially meet its customer service standards,

h. The video provider’s written commitment to distribute annually to its employees and customers, and to the City, a notice describing the customer service standards specified above in paragraphs (a) through (f). This annual notice must include the report of the video provider on its performance in meeting its customer service standards, as required by California Government Code Section 53055.2;

4. Unless a video provider is exempt under federal law from its payment, a registration fee in an amount established by resolution of the City Council to cover the reasonable costs incurred by the City in reviewing and processing the registration form;

5. In addition to the registration fee specified in paragraph 4 above, the written commitment of the video provider to pay to the City, when due, all costs and expenses reasonably incurred by the City in resolving any disputes between the video provider and its subscribers, which dispute resolution is mandated by California Government Code Section 53088.2(o).

C. The customer service obligations imposed upon video providers by the Video Customer Service Act California Government Code Section 53088, et seq. consist of the following:

1. Every video provider must render reasonably efficient service, make repairs promptly, and interrupt service only as necessary;

2. All video provider personnel contacting subscribers or potential subscribers outside the office of the provider must be clearly identified as associated with the video provider;

3. At the time of installation, and annually thereafter, all video providers must provide to all customers a written notice of the programming offered, the prices for that programming, the provider’s installation and customer service policies, and the name, address, and telephone number of the City’s office that is designated for receiving complaints;

4. All video providers must have knowledgeable, qualified company representatives available to respond to customer telephone inquiries Monday through Friday, excluding holidays, during normal business hours;

5. All video providers must provide to customers a toll-free or local telephone number for installation, service, and complaint calls. These calls must be answered promptly by the video providers;

6. All video providers must render bills that are accurate and understandable;

7. All video providers must respond promptly to a complete outage in a customer’s service. The response must occur within 24 hours of the reporting of such outage to the provider, except in those situations beyond the reasonable control of the video provider. A video provider will be deemed to respond to a complete outage when a company representative arrives at the outage location within 24 hours and begins to resolve the problem;

8. All video providers must provide a minimum of 30 days’ written notice before increasing rates or deleting channels. All video providers must make every reasonable effort to submit the notice to the City in advance of the distribution to customers. The 30-day notice is waived if the increases in rates or deletion of channels are outside the control of the video provider. In those cases, the video provider must make reasonable efforts to provide customers with as much notice as possible;

9. Every video provider must allow every residential customer who pays his or her bill directly to the video provider at least 15 days from the date the bill for services is mailed to the customer, to pay the listed charges unless otherwise agreed to pursuant to a residential rental agreement establishing tenancy. Customer payments must be posted promptly. No video provider may terminate residential service for nonpayment of a delinquent account unless the video provider furnishes notice of the delinquency and impending termination at least 15 days prior to the proposed termination. The notice must be mailed, postage prepaid, to the customer to whom the service is billed. Notice must not be mailed until the 16th day after the date the bill for services was mailed to the customer. The notice of delinquency and impending termination may be part of a billing statement. No video provider may assess a late fee any earlier than the 22nd day after the bill for service has been mailed;

10. Every notice of termination of service pursuant to paragraph 9 above must include all of the following information:

a. The name and address of the customer whose account is delinquent,

b. The amount of the delinquency,

c. The date by which payment is required in order to avoid termination of service,

d. The telephone number of a representative of the video provider who can provide additional information and handle complaints or initiate an investigation concerning the service and charges in question;

11. Service may only be terminated on days in which the customer can reach a representative of the video provider either in person or by telephone;

12. Any service terminated without good cause must be restored without charge for the service restoration. Good cause includes, but is not limited to, failure to pay, payment by check for which there are insufficient funds, theft of service, abuse of equipment or system personnel, or other similar subscriber actions;

13. All video providers must issue requested refund checks promptly, but no later than 45 days following the resolution of any dispute, and following the return of the equipment supplied by the video provider, if service is terminated;

14. All video providers must issue security or customer deposit refund checks promptly, but no later than 45 days following the termination of service, less any deductions permitted by law;

15. Video providers must not disclose the name and address of a subscriber for commercial gain to be used in mailing lists or for other commercial purposes not reasonably related to the conduct of the businesses of the video providers or their affiliates, unless the video providers have provided to the subscriber a notice, separate or included in any other customer notice, that clearly and conspicuously describes the subscriber’s ability to prohibit the disclosure. Video providers must provide an address and telephone number for a local subscriber to use without toll charge to prevent disclosure of the subscriber’s name and address.

D. Penalties for Noncompliance.

1. Purpose. The purpose of this subsection is to authorize the imposition of monetary penalties for the violation of the customer service standards established by this section. The imposition of penalties authorized by this subsection will not prevent the City or any other affected party from exercising any other remedy to the extent permitted by law, including but not limited to any judicial remedy as provided in paragraph (2)(d) below.

2. Administration and Appeals.

a. The City Manager or the City Manager’s designee is authorized to administer this subsection. Decisions by the City Manager to assess monetary penalties against the grantee must be in writing and must contain findings supporting the decisions. Decisions by the City Manager are final, unless appealed by the grantee or aggrieved party.

b. If the grantee or any interested person is aggrieved by a decision of the City Manager, the aggrieved party may, within 10 days of the written decision, appeal that decision in writing to the City Clerk. The appeal shall be conducted in accordance with the provisions of Section 5.16.420(B)(2) of this chapter.

c. Schedule of Penalties. The following schedule of monetary penalties may be assessed against the grantee for the material violation of the provisions of the customer service standards set forth in this section, provided that the violation is within the reasonable control of the grantee:

i. The maximum penalty for a first material violation is $200.00 for each day of the material violation.

ii. For a second material violation of the same nature within a 12-month period for which the City has provided notice and a penalty has been assessed, the maximum penalty is $550.00 for each day of the material violation.

iii. For a third or further material violation of the same nature within a 12-month period for which the City has provided notice and a penalty has been assessed, the maximum penalty is $750.00 for each day of the material violation.

d. Judicial Remedy. This paragraph does not preclude any affected party from pursuing any judicial remedy available to that party without regard to this subsection.

e. Notice of Violation. The City must give the grantee written notice of any alleged violation of the consumer service standards and allow the grantee at least 30 days from receipt of the notice to remedy the specified violation.

f. Assessment of Monetary Penalties.

i. If a violation has not been corrected or cured by grantee within the time specified by the City, the monetary penalties specified in paragraph (c) above may be assessed from the date of delivery to grantee of the City’s written notice of violation.

ii. In assessing monetary penalties under this subsection, the City Manager or the City Council, as applicable, may take into account the nature, circumstances, extent and gravity of the violation and, with respect to the grantee, the degree of culpability, any history of prior violations, and such other matters as may be relevant. If warranted under the circumstances, the monetary penalty to be assessed may be less than the maximum penalty amount specified above in paragraph (c).

E. Additional Consumer Protection and Service Standards.

1. In addition to the consumer protection and service standards that are specified in subsection (B)(3) of this section, the franchise agreement with a grantee may require compliance with the following:

a. Federal statutes, and the rules, regulations, and orders of the Federal Communications Commission, including the following:

i. The provisions of Section 76.309(c) of Title 47 of the Code of Federal Regulations, as it now exists or may later be amended;

ii. The provisions of Section 76.630 of Title 47 of the Code of Federal Regulations, as it now exists or may later be amended;

iii. The provisions of Section 551 of Title 47, United States Code, as it now exists or may later be amended;

iv. The provisions of California Government Code Section 53054, et seq., entitled the "Cable Television and Video Provider Customer Service and Information Act";

v. The provisions of California Government Code Section 53088, et seq., entitled the "Video Customer Service Act";

vi. The provisions of California Civil Code Section 1722(b)(1) through (6) relating to service or repair transactions between cable television companies and their subscribers;

vii. The provisions of California Penal Code Section 637.5 relating to subscribers’ rights to privacy protection.

2. The City may, in its discretion, incorporate in a franchise agreement those customer service and protection standards referenced in paragraph 1 above that are the most stringent, and that afford the greatest protection to consumers. These standards will apply, to the extent authorized by law, to all video, voice, and data services that are provided by the grantee to its subscribers within the franchise service area.

Any video programming that is provided by a telephone corporation that uses public rights-of-way in the delivery of the video programming, regardless of the technology used, will be considered a cable service under this chapter, unless such programming is otherwise preempted by state or federal law.

A. In recognition of and in compliance with the statutory authorizations and requirements set forth in the recitals of the ordinance codified in this chapter, the following regulatory provisions are applicable to a telephone corporation that desires to provide telecommunications service by means of facilities that are proposed to be constructed within the City’s public rights-of-way:

1. The telephone corporation must apply for and obtain, as may be applicable, an excavation permit, an encroachment permit, or a building permit ("ministerial permit.")

2. In addition to the information required by this code in connection with an application for a ministerial permit, a telephone corporation must submit to the City the following supplemental information:

a. A copy of the certificate of public convenience and necessity issued by the CPUC to the applicant, and a copy of the CPUC decision that authorizes the applicant to provide the telecommunications service for which the facilities are proposed to be constructed in the City’s public rights-of-way;

b. If the applicant has obtained from the CPUC a certificate of public convenience to operate as a "competitive local carrier," the following additional requirements are applicable:

i. As required by Decision No. 95-12-057 of the CPUC, the applicant must establish that it has filed with the City in a timely manner a quarterly report that describes the type of construction and the location of each construction project proposed to be undertaken in the City during the calendar quarter in which the application is filed, which information is sufficient to enable the City to coordinate multiple projects, as may be necessary.

ii. If the applicant’s proposed construction project will extend beyond the utility rights-of-way into undisturbed areas or other rights-of-way, the applicant must establish that it has filed a petition with the CPUC to amend its certificate of public convenience and necessity and that the proposed construction project has been subjected to a full-scale environmental analysis by the CPUC, as required by Decision No. 95-12-057 of the CPUC.

iii. The applicant must inform the City whether its proposed construction project will be subject to any of the mitigation measures specified in the negative declaration ("Competitive Local Carriers (CLCs) Projects for Local Exchange Communication Service throughout California") or to the mitigation monitoring plan adopted in connection with Decision No. 95-12-057 of the CPUC. The City’s issuance of a ministerial permit will be conditioned upon the applicant’s compliance with all applicable mitigation measures and monitoring requirements imposed by the CPUC upon telephone corporations that are designated as "competitive local carriers."

B. In recognition of the fact that numerous excavations in the public rights-of-way diminish the useful life of the surface pavement, and for the purpose of mitigating the adverse impacts of numerous excavations on the quality and longevity of public street maintenance within the City, the following policies and procedures are adopted:

1. The City Manager is directed to ensure that all public utilities, including telephone corporations, comply with all local design, construction, maintenance and safety standards that are contained within, or are related to, a ministerial permit that authorizes the construction of facilities within the public rights-of-way.

2. The City Manager is directed to coordinate the construction and installation of facilities by public utilities, including telephone corporations, in order to minimize the number of excavations in the public rights-of-way. In this regard, based upon projected plans for street construction or renovation projects, the City Manager is authorized to establish on a quarterly basis one or more construction time periods or "windows" for the installation of facilities within the public rights-of-way. Telephone corporations and other public utilities that submit applications for ministerial permits to construct facilities after a predetermined date may be required to delay such construction until the next quarterly "window" that is established by the City.

Beginning January 1, 2008, any grantee of a City franchise that elects to terminate a local cable television franchise agreement and replace it with a state franchise pursuant to the Digital Infrastructure and Video Competition Act of 2006, Division 2.5 of the Public Utilities Code commencing at Section 5800, will be governed by Sections 5.16.630 through 5.16.720 of this chapter.

Sections 5.16.630 through 5.16.720 pertain to the regulation of state video franchises.

Sections 5.16.630 through 5.16.720 are designed to regulate video service providers holding state video franchises and operating within the City. As of January 1 2007, the State of California will have the sole authority to grant state video franchises pursuant to the Digital Infrastructure and Video Competition Act of 2006. Pursuant to the Act, the City of Walnut shall receive a franchise fee and shall receive a fee for public, educational, and government (PEG) purposes from all state video franchise holders operating within the City. Additionally, the City will acquire the responsibility to establish and enforce penalties consistent with State law against all state video franchise holders operating within the City for violations of customer service standards. However, the Act grants all authority to adopt customer service standards to the State. The Act leaves unchanged the City’s authority to regulate the City’s current cable franchise in accordance with Section 5.16.010, and the cable franchise currently in effect until such time as the cable franchisee no longer holds a City franchise or is no longer operating under a current or expired City franchise.

Unless otherwise expressly set forth in this section or elsewhere in this chapter, the definitions of the terms herein shall have the same meaning as defined in the California Public Utilities Code Section 5830, and as otherwise defined in the Digital Infrastructure and Video Competition Act of 2006, as amended. For the purposes of this chapter, the words, terms, phrases, and abbreviations have the meanings set forth below. When not inconsistent with the context, words used in the present tense include the future tense, and words in the singular include the plural number. Unless otherwise expressly stated, words, terms, phrases, and abbreviations not defined in this section either directly or by reference to state law will be given their meaning as used in Title 47 of the United States Code, as amended, and, if not defined in that Code, their meaning as used in Title 47 of the Code of Federal Regulations.

"Affiliate"

means, when used in relation to any person, another person who owns or controls, is owned or controlled by, or is under common ownership or control with, such person.

"Cable system operator" or "cable operator"

means any person or group of persons:

Who provides cable service over a cable system and directly or through one or more affiliates owns a significant interest in that cable system; or

Who otherwise controls or is responsible for, through any arrangement, the management and operation of that cable system.

"CFR"

means the Code of Federal Regulations. Thus, the citation of "47 CFR 80.1" refers to Title 47, Part 80, Section 1, of the Code of Federal Regulations.

"City Manager"

means the City Manager of the City of Walnut, or the City Manager’s designee.

"Communications Act"

means the Communications Act of 1934 (47 U.S.C. Sections 153, et seq.), as amended by the Cable Communications Policy Act of 1984, the Cable Television Consumer Protection and Competition Act of 1992, and the Telecommunications Act of 1996.

"FCC" or "Federal Communications Commission"

means the Federal administrative agency, or any lawful successor, that is authorized to regulate cable and telecommunications services and cable and telecommunications service providers on a national level.

"Franchise fee"

means any fee or assessment of any kind that is authorized by state or federal law to be imposed by the City on a grantee as compensation in the nature of rent for the grantee’s use of the public rights-of-way. The term "franchise fee" does not include:

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);

Capital costs that are required by the franchise to be incurred by a grantee for public, educational, or governmental access facilities;

Requirements or charges that are incidental to the award or enforcement of the franchise, including payments for bonds, security funds, letters of credit, insurance, indemnification, penalties, or liquidated damages; or

Any fee imposed under Title 17, United States Code.

"Franchise service area" or "service area"

means the entire geographic area of the City as it is now constituted, or may in the future be constituted, unless otherwise specified in the ordinance or resolution granting a franchise, or in a franchise agreement.

"Gross revenue"

shall be defined in accordance to California Public Utilities Code Section 5860 subdivision (d).

"Person"

means an individual, partnership, limited liability company, association, joint stock company, trust, corporation or governmental entity.

"Public, educational or government access facilities," "PEG access facilities," or "PEG access"

means the total of the following:

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

Facilities and equipment for the use of that channel capacity.

"Subscriber" or "customer" or "consumer"

means any person who pays for or lawfully receives cable or video services provided by cable operator or video services provider by means of the cable system or video system.

"Street" or "public right-of-way"

means each of the following that has been dedicated to the public and maintained under public authority or by others and is located within the City limits: streets, roadways, highways, avenues, lanes, alleys, sidewalks, easements, rights-of-way and similar public property that the City from time to time authorizes to be included within the definition of a street.

"Telecommunications"

means the transmission, between or among points specified by the user, of information of the user’s choosing, without change in the form or content of the information as sent and received.

"Telecommunications equipment"

means equipment, other than customer premises equipment, used by a telecommunications service provider to provide telecommunications service, including software that is integral to that equipment.

"Telecommunications service"

means the offering of telecommunications directly to the public for a fee, or to such classes of users as to be effectively available directly to the public, regardless of the equipment or facilities that are used.

"Telecommunications service provider"

means any provider of telecommunications service.

"U.S.C. Section"

means the United States Code. Thus, the citation of "47 U.S.C. Section 153" refers to Title 47, Section 153, of the United States Code.

"Video programming provider"

means any person or group of persons who has the right under the federal copyright laws to select and to contract for the carriage of specific video programming on a cable system or an open video system.

"Video service provider"

means any person, company, or service that provides one or more channels of video programming to a residence, including a home, multifamily dwelling complex, congregate-living complex, condominium, apartment or mobilehome, where some fee is paid for that service, whether directly or as included in dues or rental charges, and whether or not public rights-of-way are used in the delivery of that video programming. A "video provider" includes, without limitation, providers of cable television service, open video system service, master antenna television, satellite master antenna television, direct broadcast satellite, multipoint distribution services and other providers of video programming, whatever their technology.

A. For any state video franchise holder operating within the boundaries of the City of Walnut, there shall be a fee paid to the City equal to five percent of the gross revenue of that state video franchise holder.

B. Gross revenue for the purposes of subsection A of this section shall have the definition set forth in California Public Utilities Code Section 5860.

Not more than once annually, the City Manager or designee may examine the business records of a holder of a state video franchise to ensure compliance with Sections 5.16.650 and 5.16.670 under the terms and conditions set forth in the Act.

A. For any state video franchise holder operating within the boundaries of the City of Walnut there shall be an additional fee paid to the City equal to one percent of the gross revenue of that state video franchise holder which shall be imposed under the terms and conditions set forth in the Act.

B. This fee shall be used by the City for PEG purposes consistent with state and federal law. The PEG fee shall be paid quarterly, to be received by the City not later than 45 days after the close of each quarter of grantee’s fiscal year.

1. On a quarterly basis, grantee shall provide the City a complete and accurate statement verified by a financial officer of grantee indicating gross revenues for the past quarter, listing every revenue source, and depicting gross revenue computations.

2. A video service provider subject to this section may recover the amount of any fee by billing a recovery fee as a separate line item on the regular bill of each subscriber.

C. Channel Designation. All video service providers that use the public rights-of-way shall designate sufficient amount of capacity on its network to allow the carriage of at least three public, educational, or governmental (PEG) access channels. For the purposes of this section, a PEG access channel is deemed activated if it is being utilized for PEG access programming within the City for at least eight hours per day.

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

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 all be carried on the basic service tier of grantee.

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.

7. Requests by the City for additional channel capacity will be made in accordance to PUC Section 5870.

D. 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.

E. 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 Section 5840 of the California Public Utilities Code, or until January 1, 2009, whichever is later.

A. 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 (Sections 5.16.330 and 5.16.430).

B. The City Manager shall monitor the compliance of state video franchise holders with respect to state and federal customer service and protection standards. The City Manager will provide the State video franchise holder written notice of any material breaches of applicable customer service standards and will allow the State video franchise holder 30 days from the 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 penalties to be imposed by the City.

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

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

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

C. A state franchise holder and any franchisee, upon request by the City, shall prepare quarterly reports showing compliance customer service standards for telephone response performance. Such reports will be due to the City within 45 days from the end of each calendar quarter. The report should detail customer call center performance within all call centers serving the City showing data tracked and aggregated for the entire market area served by the call centers. The report shall include:

1. Calls offered to interactive voice router (IVR);

2. Calls handled within IVR;

3. Percentage of calls handled within IVR;

4. Calls offered to agents;

5. Calls handled within 30 seconds;

6. Service level or percentage of calls answered within 30 seconds;

7. Number of abandoned calls;

8. Percentage of calls abandoned;

9. Average speed to answer a call;

10. Number of calls reaching a busy signal;

11. Percentage of busy calls as a function of total calls.

D. A state video franchise holder may appeal a penalty assessed by the City Manager to the City Council within 60 days of the initial assessment following procedures stipulated in Section 5.16.200. The City Council shall hear all evidence and relevant testimony and may uphold, modify, or vacate the penalty. The City Council’s decision on the imposition of a penalty shall be final.

A. Applicants for state video franchises within the boundaries of the City of Walnut must concurrently provide complete copies to the City of any application or amendments to applications filed with the Public Utilities Commission.

B. One complete copy must be provided to the City Manager. Within 30 days of receipt the City Manager will provide any appropriate comments to the PUC regarding an application or an amendment to an application for a state video franchise.

Prior to construction or alteration of any facilities in, on, over, under, upon, across, and along the public streets and rights-of-way within the City of Walnut a state video franchise holder shall for each facility submit plans and drawings to the Director of Development Services for review pursuant to Section 5.16.290. For purposes of this section facilities include wires, cables, conductors, ducts, conduits, vaults, manholes, amplifiers, appliances, pedestals, attachments, and other property and equipment as are necessary and appurtenant to the operation of the video service system.

The construction standards set forth in Sections 5.16.160, 5.16.230, 5.16.250, and 5.16.270 through 5.16.300 shall apply to state video service franchise holders constructing or altering any facilities within the City of Walnut as though fully set forth in Sections 5.16.630 through 5.16.720.

The City of Walnut shall serve as the lead agency for any environmental review that is required for construction or alteration of facilities by a state video service franchise holder within the City of Walnut and may impose conditions to mitigate environmental impacts of the applicant’s use of the public rights-of-way that may be required by the California Environmental Quality Act Division 13 commencing with Section 21000 of the Public Resources Code.