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ACCEPTANCE OF COXCOM, INCORPORATED
NONEXCLUSIVE FRANCHISE
WHEREAS, on August 8, 2006, the City Council of the City of Newport
Beach adopted Ordinance No, 20 entitled an Ordinance of the City Council of
the City of Newport Beach Granting a Nonexclusive Franchise to Provide Cable
Television Services within the City of Newport Beach; and
WHEREAS, the Charter of the City of Newport Beach, Section 1303, and
Ordinance No: 20 provide that any franchise granted shall not become
effective until written acceptance is filed by the Grantee with the City Clerk. The
acceptance shall be filed within fifteen (15) days after the adoption of Ordinance
No. 20 ;and
WHEREAS; the undersigned Grantee wishes to accept the grant of the
Franchise.
NOW THEREFORE, CoxCom, Inc., a Delaware corporation, hereby
accepts the grant of the Nonexclusive Franchise granted by Ordinance No. go
and hereby agrees to comply with the provisions of the Newport Beach Charter,
Chapter 5.44, Ordinance No, 20 and the Franchise Agreement in all its
operations pursuant to the grant of the Franchise.
DATE: August 14, 2006 ox ( 0'., 1 N C -
FRANCH E
BY:
NAME: ThornakLeone
idiom
CITY CLERKS'S VERIFICATION OF ACCEPTANCE
I, LaVonne M. Harkless, City Clerk, Apertify that the above acceptance of
Franchise was received by me on u uL f- /'% 2006, at
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CITY CLERK
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FRANCHISE TO PROVIDE CABLE TELEVISION SERVICES
BETWEEN THE CITY OF NEWPORT BEACH, CALIFORNIA
AND COXCOM, INCORPORATED
THIS AGREEMENT AND FRANCHISE (the "Franchise ") is made and entered into this
day of 2006, by and between CoxCom, Incorporated, a Delaware corporation
m
dba Cox Coms Orange County (hereinafter "Cox ") and the City of Newport Beach,
California ("City").
Authority.
This Franchise has been granted and approved pursuant to the provisions of Title 5
Business Licenses and Regulations, Chapter 5.44, Cable Communications Franchise, of
the Municipal Code of the City of Newport Beach ( "NBMC "). This Franchise is in the
form of a nonexclusive franchise, contract and agreement.
2. Definitions.
A. All terms used in this Franchise Agreement shall be as defined herein and in Title
5, Business Licenses and Regulations, Chapter 5.44, Cable Communications
Franchise, of the NBMC. The provisions of the NBMC and the wordings,
specifications, and requirements in this Franchise shall constitute the terms of a
franchise as authorized in the NBMC in the form of an agreement to permit use of
the public rights -of -way and to provide cable television services by Cox. For the
purposes of this Franchise, the following words, terms; phrases, and their
derivations have the meanings given herein. When not inconsistent with the
context, words used in the present tense include the future tense, and words in the
singular number include the plural number.
"Complaint" means a dispute in which a Subscriber. notifies Cox of an outage or
degradation in picture quality, billing or other issue pertaining to the Subscriber's
Cable Service which is not corrected during the initial telephone or service call.
"Control" or "Controlling Interest" means actual working control in whatever
manner exercised, including, without limitation; working control through
ownership, management, debt instruments, or negative control, as the case may
be, of the Cable System or of Cox. A rebuttable presumption of the existence of
Control or a Controlling Interest shall arise from the beneficial ownership,
directly or indirectly, by any Person or group of Persons acting in concert (other
than underwriters during the period in which they are offering securities to the
public) of twenty percent (20 %) or more of any Person (which Person or group of
Persons is referred to as "Controlling Person"), or being a party to a management
contract to manage the Cable System in lieu of Cox.
"Gross Annual Revenue" or "Gross Annual Receipts" or "Gross Receipts" means
all revenue, as determined in accordance with Generally Accepted Accounting
Principles, which is received, directly or indirectly, by Cox and by each Affiliated
Person from or in connection with the distribution of any Cable Service, and any
• • Cox -CNB Franchise Agreement
Page 2
other Service which may, under now or then applicable federal law, be included
in the Cable Act definition for the purpose of calculating and collecting the
maximum allowable franchise fee for operation of the System whether or not
authorized by any Franchise, including, without limitation, leased or access
channel revenues received, directly or indirectly, from or in connection with the
distribution of any Cable Service. It is intended that all revenue collected by Cox
from the provision of Cable Service over the System; whether or not authorized
by the Franchise, be included in this definition. Gross Annual Revenue also
specifically includes any revenue received, as reasonably determined from time to
time by the City, through any means which is intended to have the effect of
avoiding.the payment of compensation that would otherwise be paid to the City
for the Franchise granted. Gross Annual Revenue also includes any bad debts
recovered. Gross Annual Revenue also includes all advertising revenue which is
received directly or indirectly by Cox or any Affiliated Person from or in
connection with the distribution of any Service over the System or the provision
of any Service- related activity in connection with the System. Gross Annual
Revenue does not include: (i) the revenue of any Person to the extent that said
revenue is also included in the Gross Annual Revenue of Cox; (ii) taxes imposed
by law on Subscribers which Cox is obligated to collect; and (iii) amounts which
must be excluded pursuant to applicable law.
B. Terms Not Defined — Words, terms, or phrases not defined in the NBMC or
herein shall first have the meaning as defined in the Cable Act, and: then the
special meanings or connotations used in any industry, business, trade, or
profession where they commonly carry such special meanings. If those special
meanings are not common, they will have the standard definitions as set forth in
commonly used and accepted dictionaries of the English language.
3. Scope of Franchise.
A. Cox is authorized and obligated to construct, reconstruct, and operate the System
within the public streets and rights -of -way. This authority includes the privilege
to use Cox's cable television system in the Service Area, as defined in Section 14
below, (hereinafter the "System ") to provide Cable Service to customers in the
Service Area located in all residential dwellings, commercial structures and
industrial structures,
B. This Franchise Agreement solely and exclusively creates, defines, and limits the
legal rights and obligations between City and Cox and does not; in any way,
obligate City to take any action, actions or refrain from taking any action, or
actions, to or in relation to any third party.
4. Payments.
Regular Percentage Franchise Fee. From and after the Effective Date, Cox shall pay a
Franchise Fee; in quarterly installments; in a, sum equal to five percent (5 %) of the Gross
• Cox -CNB Franchise Agreement
Page 3
Annual Revenue. The Franchise Fee shall be paid to the City within forty -five (45) days
after the close of the calendar quarter. Cox expressly acknowledges and agrees that:
A. Except for the payments expressly required by this Section 4, none of the
payments or contributions made by, or the services, equipment, facilities, support,
resources, or other activities required to be provided or performed by Cox
pursuant to this Agreement are franchise fees chargeable against the compensable
payments to be paid to City by Cox pursuant to this Section 4; and
B. As applicable, except for the compensation payments expressly required by this
Section, each of the payments or contributions made by, or the services,
equipment, facilities, support, resources, or other activities to be provided by Cox,
are voluntary and are not "franchise fees" within the meaning of the Cable Act
(47 U.S.C. §542.(g)(2)); and
C. The compensation payments due from Cox to City pursuant to this Section shall
take precedence over all other payments; contributions, services; equipment;
facilities, support, resources, or other activities to be paid or supplied by Cox
pursuant to this Franchise; and
D. The compensation and: other payments to be made pursuant to this Franchise
Agreement shall not be deemed to be in the nature of a tax, and shall be in
addition to any and all taxes of general applicability or other fees or charges
which Cox or any Affiliated Person shall be required to pay to the City or to any
state or federal agency or authority, all of which shall be separate and distinct
obligations of Cox and Affiliated Persons; and
E. Neither Cox nor any Affiliated Person shall have or make any claim for any
deduction or other credit of all or any part of the amount of the compensation or
other payments to be made pursuant to this Franchise from or against any City or
other governmental taxes 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 or income taxes) or other fees or charges which
Cox or any Affiliated Person is required to pay to City or other governmental
agency; and
F. Neither Cox nor any Affiliated Person shall apply or seek to apply all or any part
of the amount of the compensation or other payments to be made pursuant to this
Franchise as a deduction or other credit from or against any City or other
government taxes of general applicability (other than income taxes) or other fees
or charges, each of which shall be deemed to be separate and distinct obligations
of Cox and Affiliated Persons; and
G. Neither Cox nor any Affiliated Person shall apply or seek to apply all or any part
of the amount of any City or other government taxes or other fees or charges of
general applicability (including any such tax, fee, or assessment imposed on both
0 Cox-CNB Franchise Agreement
Page 4
utilities and cable operators or their services) as a deduction or other credit from
or against any of the compensation or other payments to be made pursuant to this
Franchise, each of which shall be deemed to be separate and distinct obligations
of Cox and Affiliated Persons; and
H. City acknowledges that, during the term of this Agreement, Cox may offer to its
subscribers, at a discounted rate, a bundled or combined package of certain cable
services that are subject to the franchise fee referenced above in Section 4, and
other services that are not subject to that fee. With regard to such bundled or
combined services, the following provisions are applicable:
During the term of this Agreement, if Cox offers to individual subscribers cable
services subject to the franchise fee that are bundled or combined with non - cable
services that are not subject to the franchise fee, then the revenue from those
bundled or combined services must be allocated on the basis of proportionality, as
follows:
1. The percentage that the price for all bundled services is discounted from
the established retail rates for the individual services; as those rates are
advertised by Cox in its marketing materials or published rate cards, will
be prorated across all services in the bundled package, subject to the
adjustment referenced below in Section 4(H)(2). Cox shall provide the
City with the all requested information regarding the charge for each
individual service for any bundled package within ten (10) days of the
City requesting this information.
2. The revenue derived by Cox from services that are subject to mandatory
tariff rates imposed by the California Public Utilities Commission, or any
similar governmental rate - setting authority, will be deducted from the
aggregate revenue to determine the revenue that is subject to the franchise
fee. By way of example, Cox may offer a bundle of voice, video, and data
services for a flat fee of $75, where the aggregate retail rate of those
services when purchased on an individual basis would equal $100. If
there is no service in that bundled package subject to a, mandated tariff
rate, Cox would apply a 25 percent discount to each individual service.
Thus, if the established retail rate for video service was then $50, Cox
would recognize revenue in the amount of $37.50 and would pay a
franchise fee on that amount.
3. Cox will not structure the pricing of any bundled or combined services so
as to intentionally or unreasonably cause a reduction in the Gross Annual
Revenue against which franchise the City may impose fees or other
proportionately derived taxes, surcharges, or fees.
4. If City reasonably determines that Cox has unlawfully, inequitably, or
contrary to Section 4(H) allocated Gross Annual Revenue between video
services and non -video services in calculating franchise fee payments,
Cox -CNB Franchise Agreement
Page 5
then the parties will meet upon advance notice from the City to discuss the
allocation methodology. If the parties cannot resolve the dispute within a
reasonable ,period of time, then the parties will submit the matter to a
mutually agreeable third party for non - binding mediation. The parties will
share the cost of the mediation equally. I "f the mediation is not successful,
or if the parties cannot mutually agree upon a, mediator, then either party
may file an action in a court of competent jurisdiction or pursue any other
remedies available under the law or this Agreement.
I. If any franchise payment or recomputed amount is not made on or before the
dates specified above in Section 4, Cox shall pay as additional compensation the
greater of the following:
An interest charge, computed from the applicable due date, at an annual
rate equal to the prevailing commercial prime interest rate in effect upon
the due date, plus three percent (3 %).
2. In addition to any late payment made pursuant to this section, if a payment
is late by sixty (60) days or more, Cox shall pay a sum of money equal to
five percent (5 %) of the amount due in order to defray reasonable
additional documented and itemized expenses and costs incurred by City
as a result of such delinquent payment.
3. No acceptance of any payment shall be construed as a release of, or an
accord, or satisfaction of, any claim that the City might have for further or
additional sums payable under the terms of this Franchise, or for any other
performance by Cox of an obligation hereunder.
4. Payments of compensation made by a Cox to the City pursuant to the
provisions of this Franchise are in addition to, and exclusive of, any and
all authorized taxes, business license fees, and other fees, levies, or
assessments now in effect or subsequently adopted in accordance with
state and federal law.
Letter of Credit.
A. Pursuant to Section 5.44.060(B)(1)(a) of the NBMC, within thirty (30) days of the
Effective Date of this Franchise, Cox shall post an irrevocable standby Letter of
Credit in the amount of ($17.25 per current subscriber but not less than One
Hundred Thousand Dollars ($1.00,000). The Letter of Credit provider shall have,
at aminimum, a credit rating of A issued by Moody's or Standard & Poor's The
letter of credit shall incorporate wording approved by City enabling City to draw
such sums from time to time as the City may find necessary to satisfy any
material default of Cox or to meet any payment due City under or in connection
with the NBMC or this Franchise, upon ten (10) days' written notice to the Letter
of Credit provider. The Letter of Credit shall provide in substance that, upon
written notice by City of a material default or failure to make a payment due to
Cox -CNB Franchise Agreement
Page 6
City under or in connection with the NBMC or this Franchise, City may draw
upon the Letter of Credit without any offset, contingencies or conditions of any
kind. This Letter of Credit shall provide that it may not be revoked or amended
without City's prior written approval. Cox shall obtain prior approval by the City
of the wording of the Letter of Credit, the form of the Letter of Credit, and the
Letter of Credit provider. Such approval shall not be unreasonably withheld.
B. The Letter of Credit requirement may, in the unilateral discretion of the City, be
increased by up to three times its original amount if there is an assignment;
transfer, and/or change of control of the Franchise and/or Cox.
C. The Letter of Credit required by this Section satisfies the financial security
requirements of this Franchise Agreement and is in lieu of a Security Fund or
Faithful Performance Bond pursuant to Section 5.44.060(B)(1)(a) of the NBMC.
6. Insurance.
Within ten (10) days of the Effective Date of this Franchise, Cox, at its sole cost and
expense; for the full term of this contract (and any extension thereof), shall obtain and
maintain at minimum all of the following insurance coverage:
A. des of insurance and Minimum Limits. The coverage's required herein may be
satisfied by any combination of specific liability and excess liability policies.
1. Workers' Compensation and Employers Liability Insurance in
conformance with the laws of the State of California (not required if Cox
has no employees).
2. Cox's vehicles, including owned, non -owned (e.g., owned by Cox's
employees and used in the course and scope of employment), leased or
hired vehicles, shall each be covered with Automobile Liability insurance
in the minimum amount of two million dollars ($2,000,000) combined
single limit per accident for bodily injury and property damage.
3. Cox shall obtain and maintain comprehensive or commercial General
Liability Insurance coverage in the aggregate annual amount of two
million five hundred thousand dollars ($2,500,000) combined single limit,
including bodily injury, personal injury, and broad form property damage.
Such insurance coverage shall include, without limitation:
a. Contractual liability coverage adequate to meet Cox's
indemnification obligations under this Contract; and
b. A cross - liability clause.
C. Cox shall obtain and maintain Slander /Libel/Defamation Liability
Insurance in the aggregate annual amount of one million dollars
($1,000,000).
.'
Cox -CNB Franchise Agreement
Page 7
B. All required Automobile Liability insurance and Comprehensive or Commercial
General Liability Insurance shall contain the following endorsement as a part of
each policy:
"The City of Newport Beach is hereby added as an
additional insured as respects the operations of the named
insured pursuant to cable television franchise as granted by
the City and said insurance shall specifically cover the acts
and omissions of Cox and the acts and omissions of its
employees, agents and subcontractors in the performance of
work hereunder."
C. Within thirty (30) days from Effective Date of this Franchise, Cox shall furnish
proof to City that a satisfactory insurance policy for all insurance required by this
Franchise so that the City can ensure that the insurance is in place. The insurance
policies for vehicles shall be in effect prior to usage and the City may, from time
to time, reasonably increase the required amount of said insurance so long as said
increased coverage is reasonably available at reasonable prices.
D. The insurance required of Cox pursuant to this Franchise shall be primary and no
insurance held by City shall be called upon to contribute to a loss under this
coverage.
E. All insurance policies shall provide that in the event of material change,
reduction, or cancellation or non - renewal by the insurance carrier for any reason,
not less than thirty (30) days written notice will be given to City by registered
mail of such intent to cancel, materially change, reduce or not renew the coverage.
An authorized agent of such insurance carrier shall provide to City, on such
schedule as is requested by City, a certification that all insurance premiums have
been paid and all coverage's are in force. If for any reason Cox fails to obtain or
keep any of such insurance in force, City may (but shall not be required to) obtain
such insurance, in which event Cox shall promptly reimburse City its premium
cost therefor plus interest at the City's portfolio rate until paid.
F. All insurance shall be contracted through companies licensed to do business in
California.
G. Any deductible or self - insured retentions must be declared to and approved by
City. At the option of City, insurer shall reduce or eliminate such deductible or
self- insured retention as respects City, its officials, officers, employees and
agents, or Cox shall procure a bond guaranteeing payment of losses and related
investigations, claims, administration and defense expenses.
Defense and Satisfaction of Claims.
A. Cox shall, at the sole cost and expense of Cox, upon demand by City, defend City,
its officers, boards, commissions or employees, in any and all suits, actions or
Cox -CNB Franchise Agreement
Page 8
other legal proceedings, whether judicial, quasi judicial, administrative, or
otherwise arising out of the negligent or willful acts or omissions of Cox, its
employees; subcontractors and agents. Where Cox is required to provide legal
services to City under this paragraph, and chooses to utilize joint counsel, the
parties shall make a good faith effort to cooperate and agree upon litigation
strategy and implementation thereof. In the event that Cox's litigation strategy or
choice of legal counsel create a conflict of interest, or result in inadequate
representation to protect the City's interests and separate counsel is necessary for
the representation of City, City may obtain separate legal counsel chosen by City
at Cox's cost and expense provided, however, that if City obtains separate legal
counsel as set forth above, Cox is only obligated to pay an hourly amount for
legal services which does not exceed one hundred percent (100 1/6) of the highest
hourly rate that City has paid for legal services within the twenty -four (24) month
period prior to obtaining legal services as provided in this paragraph. City shall
submit to Cox on regular basis statements for attorney's fees which shall be paid
to City within sixty (60) days of Cox's receipt of said statement.
R Cox shall cause to be paid and satisfied any judgment, decree, or order rendered,
made, or issued against Cox, City, its officers; boards; commissions, or
employees, and hold City harmless therefrom, arising out of Cox's negligent or
willful acts or omissions in connection with the construction, operation,
maintenance, or other activities in relation to Cox's cable television system
including, but not limited to, damages arising out of copyright infringement;
defamation, personal and property liability; and antitrust liability, whether or not
said damages are compensatory or punitive, provided, however, Cox shall not be
required pursuant to this paragraph to hold City harmless for actions relating to
programming decisions outside of Cox's control. Such indemnity shall exist and
continue without reference to the amount of any bond, policy of insurance,
deposit; undertaking, or other assurance; provided, however, City may not enter
into any compromise or settlement which imposes any obligation on Cox without
Cox's consent, which consent shall not be unreasonably withheld, and Cox shall
not make or enter into any compromise or settlement of any claim, demand,
causes of action, suit, or other proceedings which settlement involves anything
other than the payment of money by Cox without contribution by City, without
first obtaining the written consent of City, which consent shall not be
unreasonably withheld.
C. The :indemnification provided pursuant to paragraphs 7(A) and 7(B) above shall
apply to all damages and claims for damages of any kind suffered by reason of
any of the aforesaid operations referred to in those paragraphs; regardless of
whether or not City has prepared, supplied, or approved the plans and/or
specifications for the operation or regardless of whether or not any insurance
policies shall have been determined to be applicable to any of such damages or
claims for damages.
Cox -CNB Franchise Agreement
Page 9
8. Liquidated Damages and Other Remedies.
A. Damages for Violation of Technical Standards, Customer Service Standards and
Other Violations.
In addition to, and without limiting the damages for delays as specified in Section
4 of this Franchise, City may impose any of the other liquidated damages
described below for the violations and in the amounts described below:
I. Technical Standards violations.
If more than ten percent (10 %) of the locations tested pursuant to FCC
regulations fail to meet the FCC technical standards, City may impose
liquidated damages in an amount equal to two hundred dollars ($200) per
day, if Cox does not cure the violation in accordance with Section 8(B)(1)
below.
2. Customer Service Violations.
If Cox violates, in any material way, any of the customer service standards
specified in the NBMC or this Franchise, City may impose liquidated
damages in the amount of two hundred dollars ($200) per violation per
day if Cox does not cure the violation in accordance with Section 8(B)(1)
below.
Other Violations.
For all violations and'breaches specified in the Franchise or the NBMC,
the City may impose liquidated damages in the amount of two hundred
dollars ($200) per day if Cox does not cure the violation in accordance
with Section 8(B)O below.
4. Reduction of Damages and Letter of Credit.
If City does not impose any damages on Cox for delays in violation of
technical standards, violation of customer service standards or for other
violations in the four (4) year period which shall commence on the date
which is sixty (60) days from the Effective Date of this Franchise, after
such four (4) year period, the penalties contained in Sections 8(A)(1) and
8(A)(2) above shall be reduced to one hundred fifty dollars ($150) per day
per violation, and the letter of credit contained in Section 5 above shall be
reduced to seventy -five percent (75 %) of the original amount thereof,
provided however, that the original, penalties and the original amount of
the letter of credit, as increased as allowed herein upon transfer,
assignment or change of control, shall be immediately reinstated if (a) City
imposes two (2) penalties on Cox in any twelve (12) month period, and/or
(b) if Cox assigns, sells, leases or otherwise transfers this Franchise or
control of the System. This entire paragraph shall immediately cease to
Cox -CNB Franchise Agreement
Page 10
have any force or effect if City imposes a penalty or penalties on Cox
within the four (4) year period which commences sixty (60) days from the
Effective Date of this Franchise Agreement.
B. Payment of Damages.
I. Cure.
In the event that City has reason to believe that Cox has failed to comply
with any material provision of this Franchise or the NBMC and therefore
desires to impose damages on Cox as stipulated above and/or in the
NBMC City shall notify Cox in writing of the provision or provisions
which City believes may be in default as well as the applicable cure
period. Cox shall, upon receipt of said Notice:
a. Cure the alleged violation within the cure period provided by the
NBMC, or if no cure period is provided, within five (5) working
days of said notice. In the event that Cox does not correct said
violation within the applicable cure period, said liquidated
damages maybe imposed from the date of original violation; or
b. Respond to City in writing during the cure period contesting City's
assertion of violation and providing such information or
documentation as may be necessary to support Cox's position
and/or request an extension of the cure period. The decision to
extend the cure period shall be within the sole discretion of the
City; however such request for an extension of the cure period
shall not be unreasonably withheld by City.
2. Appeal and Payment.
In the event Cox fails to respond to said notice of violation, or to cure the
violation within the applicable cure period, or provide an explanation for
failure to cure acceptable to City, City or its designee shall schedule a
hearing no sooner than ten (10) days after written notice to Cox of the
expiration of the cure period and the scheduling of said hearing. Cox shall
be provided an opportunity to be heard at such hearing, including the right
to present evidence, cross- examine witnesses, and be represented by
counsel. Within thirty (30) days after said hearing, City shall determine
whether or not Cox is in violation and submit written findings of facts
supporting such determination. The hearing described above may be
conducted, at City's selection, either before the City Council or before an
administrative officer or commission selected by the City Council. In the
event that said hearing is not held before the City Council, Cox shall
possess the right to appeal said determination to the City Council within
ten (10) days of issuance of the statement of decision and findings of fact.
The City Council shall decide said appeal pursuant to a hearing at which
C.
Ia
Cox-CNB Franchise Agreement
Page I I
Cox has an opportunity to be heard and the right to present evidence,
examine witnesses and be represented by Counsel. Cox shall have the
right to appeal the City Council's decision to a court of competent
jurisdiction within ninety (90) days of any final decision by the City
Council. In the event a court orders repayment of said liquidated damages
from City to Cox, interest on such amounts shall be included at the rate
paid by the Local Agency Investment Fund to the City for City
Investments. All liquidated damages shall be due and owing thirty (30)
days after the final decision by either the City Council or the hearing
officer in the event of no appeal to the City Council. The aforesaid
assessment may be levied directly against the letter of credit and collected
by City thirty (30) days from date said damages are due and owing. Such
assessment shall not constitute a waiver by 'City of any other right or
remedy it may have under the Franchise or under applicable law including;
without limitation, its right to recover from Cox such additional damages,
losses, costs and expenses, including reasonable attorneys' fees, as may
have been suffered or incurred by City by reason of or arising out of such
breach of the Franchise. Nothing in this paragraph is intended to waive,
modify or otherwise affect Cox's rights under the NBMC, this Franchise,
or any applicable law, except for the specific procedures expressly
provided herein, including without limitation the right to judicial review of
the legal rights and obligations of the parties with respect to each other,
Cox's right to challenge the decision of City under applicable legal
standards, and/or any issue of performance or breach by either party to this
Franchise.
Validity �guidated Damages.
The parties acknowledge that it would be impractical or extremely difficult to fix
actual damages in the case of Cox's default, and that the amount of damages
specified above is a reasonable and complete estimate of City's damages. Cox
recognizes that Cox's prompt development and offering of cable television
service for which penalties can be imposed is of critical importance to City.
City: ,
(Initials
Sole Financial Remedy.
Cox:
(Initials)
No financial penalties will be applied pursuant to Ordinance or other similar
document for the same offenses to which the liquidated damages apply.
W
Cox -CNB Franchise Agreement
Page 12
9, Cox Support for Development of Technology and Programming.
Cox shall provide the following support for the purpose of technology development and
implementing non - commercial public, benefit uses of the Cable System. The provision of
the support items listed herein shall be considered as binding commitments of Cox within
the terms of this Franchise, and if not provided, shall subject Cox to applicable remedies
and penalties for violations of the Franchise.
Cox shall provide the following support:
A. Channel Capacity Requirements,
Cox Support for Public, Educational or Government Access "PEG Access ":
Cox shall designate three (3) channels for the exclusive use of the City
( "PEG channels "). The PEG channels shall be under the exclusive
management and editorial control of the City and shall not be shared with
other cities. The City may designate a representative, such as a non - profit
entity, to use and administer to said channels, with all of the attendant
rights and obligations provided to the City hereunder.
hi the event Cox is required by federal law, regulations, or otherwise to
change the channel number of a PEG channel, Cox shall provide thirty
(30) days advance notice to the City and its customers. Should Cox desire
to change the channel number of a PEG channel that is in use by a PEG
user within the criteria set forth in Section 9(A)(2) for any other reason,
Cox shall provide the City with the reason for change at least ninety (90)
days prior to the proposed change, advertise the change to customers on its
website, in at least three (3) bill messages prior to the change, and in a
television spot announcement that Cox shall carry on its system for at least
six weeks prior to the change. Cox shall also reimburse the City for its
actual costs for reprinting any materials such as program guides or other
promotional materials occasioned by the change in an amount not to
exceed $7,500.00 for its costs of remarketing the channel.
2. Cox shall make available additional PEG channels designated, for use
exclusively by the City pursuant to the following criteria:
a. The initial governmental channels must be in use and programmed
with non - commercial PEG programming, of which no more than
ten (10) hours can be character generated programming, during at
least 80% of the weekdays for at least 80% of the time during any
consecutive 6 -hour period for ten (10) consecutive weeks.
b. The initial public and educational channel must be in use and
programmed with non - commercial and at least 50% locally
produced programming, of which no more than ten (10) hours per
week can be character- generated programming during at least 80%
Cox -CNB Franchise Agreement
Page 13
of the weekdays for at least 80% of the time during any
consecutive 6 -hour period for ten (10) consecutive weeks.
C. No more than 33 -1/3% of the aggregate hours utilized for PEG
programming during such ten week period can represent repeat
programming.
d. Any additional PEG channel shall be made available within 180
days following the City's written request and verification of
compliance with each of the foregoing conditions.
e. Whenever such additional PEG channels but not the original three
PEG channels, are programmed for less than ten (10) hours per day
for six (6) days per week for a continuous period of not less than
twelve (12) consecutive weeks, the City may permit Cox to utilize
unused channel capacity on that channel under the following
conditions:
(i) Any request from Cox to use any fallow capacity
designated for PEG Access must be submitted in writing to
the City.
(ii) The City shall approve the request from Cox to use fallow
channel capacity if it finds that: (i) the utilization of the
channel is as represented; (ii) Cox has not acted in violation
of any of the provisions of the Franchise regarding
utilization of the channel; and (iii) there are no special
circumstances which would justify the denial or delay of
implementation of the use of the channel. After approval,
Cox may continue to utilize the channel for any other
purposes it so chooses, consistent with the Franchise, until
it is required to be designated for PEG purposes pursuant to
the provisions hereof.
(iii) Unless Cox receives written notice within one hundred and
twenty (120) days that the City disapproves Cox's request,
the City's approval shall be deemed granted.
f The maximum number of access channels which may required
under this Franchise shall be five (5), subject to the City's right to
exchange channels, as set forth herein. On six months notice to
Cox, City may exchange each analog PEG, channel for four (4)
digitally compressed channels upon satisfaction of the following
conditions:
-'Cox-CM Franchise Agreement
Page 14
(i) Cox provides digitally compressed channels which offer at
least as many services as are available by analog channels
on the system; and
(ii) Digital decompression terminal devices are installed in the
homes of a least 50% of Cox's subscribers, and are used to
receive Cox's services; and
(iii) City provides six (6) months notice to Cox.
(iv) City provides written waiver of any state or federal laws
pertaining to requirements for the placement of such
channels.
As used in this section, a "digitally compressed channel" shall mean a data
stream capable of delivering video programming on a basis comparable to
the delivery of other digitally compressed video programming.
3 The City shall have sole responsibility for the administration and
programming of the Governmental channel(s) provided by Cox, including
without limitation, the carriage of programming on the channel(s) to
include trafficking of tapes and playback and the establishment and
administration of all rules, regulations and procedures pertaining to the use
and scheduling of the programming presented over the channel(s). The
channel(s) shall be used for noncommercial, public governmental or
educational programming. In relation to the public access channel(s), Cox
shall continue its current practices of providing studio facilities,
equipment, trafficking of tapes, playback, for public access users in a
quality and quantity generally consistent with that provided over the past
franchise term.
4. City and Cox acknowledge that there are certain logistic and technical
issues that remain unresolved as of the Effective Date due to the fact that
two separate cable companies provide cable service in the City of Newport
Beach and the City Hall main operation for PEG Channel(s) resides in the
cable service area of another cable service provider. Cox agrees to work
in good: faith to resolve any logistic and technical issues to ensure
seamless quality and continuity of PEG channel(s) access by the City's
citizens including but not limited to:
a. Allowing physical playout equipment and signal to remain at
Cox's Rancho Santa Margarita facility or arranging for transfer of
decks and racks in the City Hall area at a mutually agreeable
location;
b. Ensuring that signal transmission/reception mutual exchange
across cable service boundaries is accomplished; and
Cox-CNB Franchise Agreement
Page 15
C. Ensuring continuation of transmission/reception across the two
cable systems.
B. A Grant in the amount of sixty dollars ($60.00) per Basic Service Tier subscriber
( "BST ") of Cox in the City as of the Effective Date ( "Threshold Subscribers ")
shall be paid by Cox to be utilized for any capital or non - capital purposes (the
"Initial Grant'). Said Initial Grant shall be paid by Cox within thirty (30) days of
the Effective Date of this Agreement.
C. On January 1, 2010, the City shall provide Cox with a list of newly constructed
residential units which have been constructed in the City subsequent to the
Effective Date, if any, (the "Construction List'). Within thirty (30) days of
receipt of the Construction List, Cox shall determine and report in writing to the
City the number of newly constructed units which are BST Subscribers as of that
date (the "New Construction Subscriber List'). Cox shall also report to the City
the number of BST Subscribers contained in the City other than those subscribers
set forth on the New Construction Subscriber List (the "Continuing Subscribers ").
Within ten (10) days thereafter, Cox shall pay to the City an additional grant. (the
"Additional Grant") equal to the number of New Construction Subscribers, less
the difference between Threshold Subscribers and Continuing Subscribers times
$30.00 per subscriber.
D. City and Cox agree that said Initial Grant and Additional Grant are neither
franchise fees nor offsettable against franchise fees, irrespective of how they are
expended, for the purposes of the Cable Act. City shall waive normal permit fees,
but not inspection fees, for residential dwelling units, constructed subsequent to
the Effective Date in new subdivisions where Cox installs its cable television
plant in otherwise open trenches along with other utilities at the time of new
subdivision construction. Other than the waiver of normal permit fees as
provided above, Cox will comply with all other City requirements.
E. In the event any dedication to PEG Programming required by this Franchise is
deemed by a legislative body, administrative body, or court of competent
jurisdiction to constitute a payment which must or may be offset against the
franchise fee, City hereby reserves the right, but is not required to do so, to
terminate said program and/or requirement so as to provide the maximum
allowable franchise fee. Cox shall not offset any charge, of any kind, against a
franchise fee or other payment due City without prior written consent of City.
Nothing in this Franchise is intended, and shall be so construed, to confer any
third party beneficiary rights on any party(s), and no rights are created by this
Agreement other than rights in City and Cox.
10. Governmental and Institutional Drop Policy, Provision of Live Local Insertion Locations.
A. Drops to City Facilities.
rCox- CNB Franchise Agreement
Page 16
Within one hundred eighty (180) days of written notice provided, by the City, Cox
shall provide without charge, up to four (4) cable drops, as determined by City,
for all levels and all tiers of Cable Service per building; excluding premiums and
pay- per -view, a cable modem drop, and cable modem service (residential speed of
up to 3 mbs) per drop for those buildings, institutions and facilities on Exhibit
"A ", plus those buildings, institutions and facilities which are constructed
subsequent to the Effective Date of this Franchise Agreement, as designated by
City in writing. Except for a City Hall which shall be served irrespective of
distance if it is located in the Service Area, existing or future; which Cox shall
construct at its sole expense, drops to all buildings institutions and facilities
which are constructed subsequent to the Effective Date of this Franchise
Agreement shall be limited to 250 feet from the closest point to Cox's distribution
system. In the event that requested drops exceed said distance; Cox shall
determine the incremental cost beyond said distance and the City shall pay such
incremental costs to Cox upon completion of construction. Cox shall not impose
programming or other charges for any additional outlets within said buildings.
Installation and maintenance of interior wiring of said building(s) beyond the four
(4) drops per building shall be the responsibility of the building owner, provided
that if Cox is requested to install such wiring, it will do so within a reasonable
time at its actual cost of labor and materials.
B. Live Insertion Locations.
Within one hundred eighty (180) days of written notice provided by the City, Cox
shall provide live insertion points at the locations set forth on Exhibit "B by way
of fiber connection so that the City can insert and transmit audio, video, and
digital programming from said site to Cox's headend for retransmission over one
or more of the PEG Channels specified in Section 9(A) (collectively, the "Return
Feeds "). The Return Feeds shall be constructed pursuant to technical standards
mutually agreed upon by Cox and the City (the "Design Specifications "). The
City shall possess no obligation to insert programming upon the Governmental
Channel pursuant to Section 9(A) (3) until such time as the Return Feeds are
constructed and activated pursuant to the Design Specifications. Within one
hundred and twenty (120) days of the completion and activation of the Return
Feed, any playback of local government programming or insertion of audio, data
or other information on the Government Access channel shall be the sole
responsibility of the City,
11. Services and Broad Categories of Video Programming:
Cox should provide; at a minimum, the following broad categories of services and video
programming: local broadcast, public affairs, satellite services, news; sports, cultural,
foreign language programming, general entertainment, and children's. If any listed broad
category of service or video programming shall become unavailable, or is commercially,
impractical, or cannot be provided under existing FCC regulations, Cox should provide
substitute programming of the same category if reasonably available. City may request
Cox to cooperate with City in developing and distributing a printed PEG channel guide at
Cox -CNB Franchise Agreement
Page 17
City's cost. Said printed guide shall be of a reasonable weight and size and could include,
but is not limited to, a printed guide distributed through the bills, via direct mail, or
included in local newspaper or Cox's printed guide, all at City's cost, if any, but shall not
include advertising. If City requests Cox to distribute a printed guide through the bills,
Cox shall comply so long as City produces said guide at its own cost for ,production and
insertion and provides Cox sufficient advance notice and there is room for said guide in
Cox's billing envelopes, and said guide does not take the place of other inserts desired by
Cox. City shall have complete responsibility for the content of any information included
in said guide. The payments by City referred to in this Section shall be limited to
reimbursing Cox's actual incremental cost of providing and distributing the guide.
12. Minimum System Design and Capacity Requirements.
A. Channel Capacity.
The cable television system shall be constructed with hybrid fiber coax ( "HFC ")
architecture and engineered to deliver signals at forward frequencies up to and
including a minimum bandwidth of seven hundred and fifty (750) megahertz
(MHz) on the Residential Network. The System will be engineered to allow
simultaneous downstream delivery of no less than one hundred ten (I 10) analog
video channels and shall be constructed pursuant to the specifications and routing
described herein.
B. Interactive Capacity and Services.
The cable television system shall be two -way activated in all of the distribution
plant.
C. Minimum Design Criteria.
In addition to the requirements of Section 12(A) -(B) above minimum system
construction requirements shall be as follows:
Cox shall at all times maintain equipment capable of providing standby
power for the entirety of the cable system for a minimum of two hours.
2. Emergency Override System
a. Cox shall provide install, activate, and maintain an emergency
override system which includes audio override on all analog
channels of Cox's system and character generated message
capabilities on a designated channel; receivable only within the
City. City shall be able to activate, provide audio programming,
and terminate such emergency audio override via dial -up or
dedicated telephone control upon system upgrade. City shall use
the audio override and character generated system only in
emergency situations, as declared by the City Council or the City
®' Cox -CM Franchise Agreement
Page /8
Manager when there is threat to the public welfare, health or
safety.
In addition to subsection (a) above, and in accordance with the
provisions of FCC Rules and Regulations Part 11, Subpart D,
Section 11.5(h)(1), and as such provisions may from time to time
be amended, Cox shall install and maintain an . Emergency Alert
System (EAS). As allowed by FCC Order FCC 97 -338, Paragraph
33, Cox shall transmit all national, state, and local activations of
the Federal EAS, utilizing the four -part message protocol specified
in FCC Rules and Regulations Part 11, Subpart B; or successor
protocols. This shall include such local and state -wide situations
as may be designated to be an emergency by the Local Primary
(LP), the State Primary (SP) and/or other authorities identified and
defined within FCC Rules and Regulations, Part 1 I or the Local
and State Plans provided for under those rules.
3. Cox shall provide subscribers, upon request, with a parental control
locking device or digital code or other means that permits inhibiting the
viewing of parental designated channels.
4. All new underground trunk and distribution cables shall be in conduit.
5. Minimum Technical Standards for Forward (Downstream) and Reverse
(Upstream) Directions.
The minimum technical standards shall be those adopted by the FCC from
time to time. To the extent that no FCC standards exist, the standards shall
be those FCC technical standards in effect on the Effective Date, or, if
none, those established by City.
13. Universal Service.
Cox shall design, construct and maintain the cable television system in such a manner as
to pass by every existing single or multiple- family dwelling unit in the City and shall
make the system available on an identical basis to all single or multiple fanvly dwelling
units constructed during the term of this Franchise. For new construction in residential
and industrial areas, Cox shall make the system available at the, same time as the units,
residential, or otherwise, are constructed. Nothing herein shall preclude Cox from
providing service to multi - family dwellings and other residential developments on a
discounted bulk - billing basis.
14. System Extension Policies.
Description of Service Area(s).
A. The service area shall constitute that portion of the City set forth on Exhibit "C"
(the "Service Area ").
• Cox -CNB Franchise Agreement
Page 19
B. All subscribers, residential, or otherwise, within one hundred twenty -five (125)
feet from the closest public right -of -way or easement, shall be provided service
for the standard installation fee. Subscribers located beyond one hundred twenty-
five (125) feet from the closest public right -of -way or easement will be connected
upon the payment of Cox's time and materials for that portion of the installation
which exceeds one hundred twenty-five (125) feet.
, 15. Provision of Service.
Unless the subscriber requests otherwise, Cox shall deliver initial service within seven (7)
business days after receipt of a subscriber order so long as the subscriber is within the
existing Service Area. Service additions or deletions shall be made within twenty -four
(24) hours of a subscriber request, unless additional terminal equipment is required, in
which case Cox shall make such service change within seven (7) calendar days. Cox shall
provide all subscribers, prior to the initiation of cable service and thereafter, with the
ability to subscribe to only Basic Service.
16. Technical Standards Testine.
A. Cox's cable television system shall be periodically tested by Cox, at Cox's sole
expense, at the times, and pursuant to the procedures, described in the then
applicable rules and regulations of the FCC or, if no such rules and regulations
exist, in the manner prescribed in rules and regulations in effect on the Effective
Date.
B. Reimbursement of City Expenses. City shall bear all costs associated with its
attendance, either directly or through an independent consultant, in the initial
testing but not retesting procedure described herein except as provided below:
1. Upon written request by the City and based on a pattern of customer
complaints to the City regarding system performance, Cox shall measure
and report to City the number of service complaints, which related to
customer dissatisfaction with the quality of the picture excluding partial or
total system outages. The number of said complaints over the first twelve
(12) month period after the Effective Date shall be divided by twelve (12)
and constitute the "base year average monthly subscriber complaints" for
the purposes of this paragraph.
2. At the conclusion of said twelve (12) month period, Cox shall calculate
and report to City monthly the number of subscriber complaints relating to
the quality of the picture ( "Monthly Subscriber Complaints "). Said
information shall be provided to City within fifteen (15) working days of
the last day of each calendar month.
3. So long as Monthly Subscriber Complaints, as defined herein, remain
within twenty percent (20 %) of the base year average monthly subscriber
complaints, as defined herein, City shall bear all costs relating to its
Cox-CNB Franchise Agreement
Page 20
participation in the technical standards testing process defined herein.
However, if, for any given two (2) consecutive months or any three (3)
nonconsecutive months in any six (6) month period, said Monthly
Subscriber Complaints increase more than twenty percent (20 %) over the
base year average Monthly Subscriber Complaints, Cox shall reimburse
City for City's actual and reasonable cost of supervising and/or
participating in the technical standards testing for a three (3) quarter
period commencing upon the occurrence of the contingency(ies) provided
herein if the unsupervised periodic testing, as defined herein, indicates that
Cox's system during said period is operating in conformance with the
technical performance standards provided by Section 12 hereof. Cox shall
reimburse City for any and all costs incurred by it in monitoring Cox's
technical standards testing for twelve (12) months subsequent to a,
determination by City that liquidated damages pursuant in Section 8(A)(2)
may be imposed.
4, Subscriber Complaint Log. Cox shall maintain a written or computerized
record of subscriber complaints, including: loss of signal requiring a field
visit, non- receipt of programming or services ordered, billing disputes,
missed appointments, unsatisfactory performance of maintenance,
malfunctioning signal traps on blocked channels, and unresolved or
chronic technical problems. Said record shall: indicate;
a. Date and time of Subscriber complaints;
b. Street name of complainant;
C. Nature of complaint;
d. Cox's action(s) to resolve complaint; and
e. Date(s) and time(s) actions(s) taken.
Said record shall be kept at Cox's local office for a period of two (2)
years. A copy of said Subscriber complaint record shall be submitted by
Cox to City within ten (10) working days following receipt of a written
request by City.
5. To the extent that Cox maintains and provides Subscriber complaint
information consistent with the above requirements, it shall be deemed to
have maintained and provided sufficient Subscriber complaint information
as required by this paragraph.
17. Equipment in Rights of Way.
A. Design and construction requirements, permit and other fees, public and customer
notifications, requirements for public communication, and other oversight
requirements by City imposed on Cox shall be consistent to the extent legally
M
Cox -CNB Franchise. Agreement
Page 21
permissible and technically feasible, with those requirements imposed upon other
users of the public rights-of-way and easements within the City.
B. The Cable System shall be constructed or installed in the City only after the
express written approval of the City and only at such locations and in such
manner, design, and size as shall be approved by the City. In granting such
approvals, the City shall exercise reasonable discretion in accordance with
applicable law. Upon Cox's written request, City staff shall meet and confer with
Cox in order to develop a process for expediting City processing and approval of
proposed Cable System installation of multiple "like- kind" facilities.
C. The Cable System shall be placed underground or where all other utilities are
located in all areas which are subject to the provisions of the NBMC unless
otherwise approved by the City Engineer. Such approval shall not unreasonably
'be withheld.
D. All construction or maintenance work shall be conducted in a good and
workmanlike manner consistent with industry standards. Installation of new
facilities shall occur; whenever practical, concurrent with the installation of
subdivision public improvements.
E. Upon its receipt of reasonable advance notice not to be less than five (5) business
days, Cox shall, at its own expense, protect, support, temporarily disconnect,
relocate in the Public Way, or remove from the Public Way, any property of Cox'
when lawfully required by City by reason of traffic conditions; public safety,
street abandonment, freeway and street construction, change or establishment of
street grade; installation of sewers, drains, gas or water pipes, or any other type of
structures or improvements by the Franchising Authority; but, Cox shall in all
cases have the right of abandonment of its property.
Franchise Term
The term of this franchise shall commence upon its approval by the City Council (the
"Effective Date "), and shall expire on April 1, 2011. At Cox's written election filed with
the City no later than January 1, 2010, Cox may extend the Initial Term by seven (7)
additional years so that the Franchise will expire on April 1, 2018.
19. Most Favored Nations Review.
A. At any time and at City's request, Cox shall provide information on any Cable
Services not being provided in the City which are being provided on an
operational basis in systems operated by Cox, or any affiliate thereof in the States
of California, Arizona and Nevada (the "Comparison Systems"). For purposes of
this section, "operational basis" means that Cox has offered a Cable Service to all
Subscribers in the Comparison Systems for at least six (6) months, but does not
include Cable Services that are offered on a trial or test basis to a limited number
of subscribers.
• Cox -CNB Franchise Agreement
Page 22
B. If Cox is providing Cable .Services on an operational basis in any Comparison
Systems, City may require Cox, and Cox shall comply, to provide said Cable
Service(s) within one (1) year of the City's written request; and to upgrade its
Cable System, if necessary, to provide said Cable Service. Further, 'City shall
reasonably consider not requiring such service based upon information supplied
by Cox but, after considering said information, may still require the provision of
these Cable Services.
C. After the Effective Date of the Franchise, if Cox, or any affiliate, parent, or
subsidiary thereof, enters into any renewal, franchise extension, of a franchise or a
new franchise to provide cable television service to any city located within
Orange County or the County of Orange itself, within thirty (30) days thereof,
Cox shall provide to the City copy of the Other Franchise.
D. In the event that the City concludes that the Other Franchise contains terms,
conditions or provisions regarding Public; Educational or Government access (the
"PEG Access Provision "), including, without limitation, the financial support
thereof) or Cable System Technology (i.e., channel capacity, services offered,
etc,) (hereinafter the "Technology Provision "), as originally contained therein or
as modified that are more favorable than those contained in the Franchise, when
considering the Franchise and its requirements as a whole, then the City may, at
its sole discretion, require Cox to provide the more favorable PEG Access
Provision and the more favorable Technology Provision, or either of them;
provided, however, (1) the City must notify Cox in writing of its election to
require Cox to provide the more favorable provision within one hundred eighty
(180) days of the City's receipt of the Other Franchise or the City shall be deemed
to have irrevocably declined to impose such requirement; and (2) any requirement
imposed pursuant to this paragraph of the Franchise to incorporate the more
favorable PEG Access Provision and the Technology Provision, or either of them,
shall also include, upon Cox's identification and request, the imposition of any
and all other terms or conditions in the Other Franchise which are more favorable
to Cox than those contained in the Franchise when considering the Franchise and
its requirements as a whole, (by way of example, if the Other Franchise contains a
franchise fee less than the franchise fee in the Franchise or has a term longer than
the term of the Franchise; then the Franchise shall be modified to include such
more favorable terms to the City at the same time that the Franchise is modified to
include the more favorable PEG Access Provision or the more favorable
Technology Provision).
E. Cox shall provide the same Cable Services to customers in the City as it provides
to customers in communities served off the same headend as of the date of this
Agreement. In the event Cox deploys new or different Cable Services as a result
of a Cable.System upgrade in one or more of the communities served off the same
headend as of the date of this Agreement, then Cox shall deploy those new or
different services within 24 months to customers in the City provided however
Cox may request an extension for good cause and the City may or may not in its
discretion consent to the extension_
Cox -C rB Franchise Agreement
Page 13
20. Construction Responsibility.
Cox shall be responsible for the acts and omissions of its contractors, subcontractors and
employees. Only authorized employees and/or agents of 'Cox shall apply for and be
issued all necessary permits and building authorizations. Cox shall designate to City a
construction manager who is an employee of Cox to be contacted regarding all cable
construction issues.
21. Compliance with Construction Standards.
Cox shall not construct any portion of its cable television system in City streets and
rights -of -way without obtaining all necessary City building permits and paying in
addition to, the franchise fee, all then applicable fees to the extent legally and practically
feasible to be required of all users of the public rights -of -way and public utility easements
and shall only construct said system in accordance with City standards for methods of
construction in public rights -of -way.
22. Compliance with all Laws, City Orders and the NBMC.
A. Cox shall at its own cost and expense comply with all statutes, ordinances,
regulations and requirements of all governmental entities, including federal, state,
county or municipal, whether now in force or hereinafter enacted. In addition, all
work prepared by Cox shall conform to applicable City, county; state and federal
laws, rules, regulations and permit requirements.
B. Cox shall promptly comply with all lawful City orders, resolutions and the
NBMC related to Cox's operation of the System, including all lawful rate orders.
Failure to so comply shall be considered a breach of this Franchise and shall
subject Cox to (1.) all liquidated damages contained in this Franchise and the
NBMC, and (2) all other actions, remedies and penalties available to City as a
result of such failure to comply.
C. In accepting this Franchise, the Company agrees that the commitments indicated
in Section 9 above are voluntarily entered into and shall not be charged against
any Franchise Fees due the City during the term of the Franchise. The Company
agrees to meet all of the commitments of Section 9 above, through the term of the
Franchise.
23. Performance Audits
City may require, at its option, that performance audits of the System be conducted every
two (2) years by an independent technical consultant selected and employed by City at its
sole expense to verify that the System complies with all technical standards and other
specifications of the Franchise.
• Cox-CNB Franchise Agreement
Page 24
24. Franchise Construction.
This Franchise shall be construed according to the internal laws of the State of California
and all federal laws of the United States. Any action brought relating thereto must be
brought exclusively in the state or federal courts located in Orange County, California.
25. Notices.
Any notice required to be given by this Agreement shall be presumed given five (5) days
after deposit in the United States mail, properly addressed by certified mail and return
receipt requested, as follows:
To City: City Manager
City of Newport Beach
3300 Newport Blvd.
Newport Beach, CA 92663
With a COPY to: City Attorney
City of Newport Beach
3300 Newport Blvd.
Newport Beach, CA 92663
To Cox: Cox Com, Inc.
Cox Communications Orange County
29947 Avenida de las Banderas
Rancho Santa Margarita, CA 92688
Attn: Vice President, Government.Affairs
With a COPY to: CoxCom, Inc.
Attn: Director, Government Affairs
1400 Lake Hearn Drive
Atlanta, GA 30319
26. Pass - Through of Expenses.
Cox will not separate out, line itemize, or surcharge the cost of the Initial Grants and the
Additional Grants described in Section 9 or any other cost related to this Agreement
(except the franchise fee) as a line item on City customer's cable bills. Additionally, Cox
shall not impose rates and charges on subscribers which are higher for like -kind services
or of packages of services than those imposed upon subscribers in any of the cities of
Mission Viejo, Laguna Hills, Tustin, Rancho Santa Margarita, and Aliso Viejo.
• Cox -CNB Franchise Agreement
Page 25
27. Possessory Interest.
By accepting this Franchise, Cox acknowledges that notice is and was hereby given to
Cox pursuant to California Revenue and Taxation Code Section 107.6 that use or
occupancy of any public property pursuant to the authorization herein set forth may
create a possessory interest which may be subject to the payment of property taxes levied
upon such interest. Cox shall be solely liable for, and shall pay and discharge prior to
delinquency, any and all possessory interest taxes or other taxes levied against Cox's
right to possession, occupancy or use of any public property pursuant to any right of
possession, occupancy or use created by this Franchise. Cox shall not be barred from
challenging such try on any amounts assessed pursuant thereto.
28. Rates.
City may, without amendment of this Franchise, regulate Cox's rates, charges, and prices
to the maximum extent permitted by law.
29. Force Mai eure.
In the event Cox's performance of any of the terms, conditions, obligations or
requirements of this Franchise is prevented or impaired due to any cause beyond its
reasonable control and not reasonably foreseeable, such inability to perform shall be
deemed to be excused, and no penalties or sanctions shall be imposed as a result thereof.
Such causes beyond Cox's reasonable control and not reasonably foreseeable shall
include, but not be limited to, any acts of God, civil emergencies, labor unrest; strikes,
inability to obtain access to an individual's property and any inability of Cox to secure all
necessary permissions or permits to utilize necessary poles or conduits so long as Cox
utilizes due diligence to timely obtain said permissions or permits.
30. Meet and Confer.
Prior to exercising any rights of audit or inspection upon Cox pursuant to Chapter 5.44 of
the NBMC, City and Cox shall reasonably attempt to meet and confer to achieve
voluntary compliance.
31. Interpretation.
The terms of this Franchise shall be construed in accordance with the meaning of the
language used and shall not be construed for or against either party by reason of the
authorship of the Franchise or any other rule of construction which might otherwise
apply.
32. Successors and Assigns.
All provisions of this Agreement shall apply to any lawful successors and assigns.
• Cox -CNB Franchise Agreement
Page 26
33, Severability.
If any provision of this Agreement or the application of such provision to any
circumstance is rendered unconstitutional or otherwise invalid by any law, ordinance;
regulation or court of competent jurisdiction, the remainder of this Agreement or the
application of the provision to other circumstances, shall not be affected thereby.
34. Rights Cumulative.
The rights and remedies of the parties pursuant to this Franchise are cumulative, except
as otherwise provided in this Franchise, and shall be in addition to and not in derogation
of any other rights or remedies which the parties may have with respect to the subject
matter of this Franchise.
35. No Waiver.
A waiver of any right or remedy by a party at any one time shall not affect the exercise of
said right or remedy or any other right or other remedy by such party at any other time.
The failure of the City to take any action in the event of a material breach by Cox shall
not be construed or otherwise be deemed to constitute a waiver of the right of the City to
take such action at any other time in the event that said material breach has not been
cured; or with respect to any other material breach by Cox.
36. Declaration of Invalidity.
In the event that, after the Effective Date of this Franchise, any court, agency,
commission, legislative body, or other authority of competent jurisdiction: (A) declares
that this Franchise is invalid, in whole or in part; or (B) requires Cox either to: (1)
perform any act which is inconsistent with any provision of this Franchise or (2) cease
performing any act required by any provision of this Franchise, City shall reasonably
determine whether said declaration or requirement has a material and adverse effect on
this Franchise. When Cox intends to exercise its rights pursuant to such declaration or
requirement, Cox shall so notify the City Manager's Office of said declaration or
requirement. If the City determines that said declaration or requirement does have a
material and adverse effect on this Franchise, then Cox shall then enter into good faith
negotiations with the City to amend this Franchise to eliminate any inconsistency or
conflict between said declaration or requirement and the provisions of this Franchise and
to meet the original intent of the parties as the circumstances warrant.
37. Time of the Essence; Maintenance of Records.
In determining whether Cox has substantially complied with the Franchise, the City and
Cox agree that time is of the essence.. As a result, Cox's failure to complete construction,
extend service; seek approval of transfers, or provide information in a timely manner
shall constitute substantial breaches of material terms of the Franchise. Maintenance of
records and provision of reports in accordance with the Franchise is also an essential part
of this Franchise Agreement.
01 0 Cox -CNB Franchise Agreement
Page 27
38. Exhibits.
Exhibits "A" through "C" are an integral part of this Agreement and these Exhibits are
incorporated herein by reference. All references to this Agreement shall include all Exhibits. In
recognition of the obligations stated in this Agreement, the parties have executed this Agreement
on the date indicated above.
APPROVED AS TO FORM:
Aaron C. Harp,
Assistant City Attorney
for the City of Newport Beach
ATTEST:
9 1147, 0' .r
City Clerk
CITY OF NEWPORT BEACH:
AM IC o
Don Webb, Mayor
for the City of Newport Beach
COXCOM, INCORPORATED
A Delaware corporation dba Cox
Communications Orange County
By: "7Z--
orpora Officer)
Tit le: �R gion VP & General Manager
• •Cox-CNB Franchise Agreement
Page 28
1 IC
Drops to City Public Buildings, Institutions and Facilities
1, Central Library — 1000 Avocado Avenue
2. Police Department — 870 Santa Barbara Drive
3. Fire Station 3 — 868 Santa Barbara Drive
4. Fire Station 5 /Corona del Mar Library — 410 & 420 Marigold; Avenue
5. Fire Station 8 — 6502 Ridge Park Road
6. Big Canyon Reservoir — 3300 Pacific View Drive
7. Oasis Senior Center — 800 Marguerite Avenue
8. Grant Howald'Park/Community Youth Center - 3000 Fifth Avenue
9. Newport Coast Community Center — NP Coast Drive & San Joaquin Rd
10. Between the Police Facility and Newport Coast Fire Station
11. Andersen Elementary — 1900 Port Seaboume Way
IC C
Live Local Insertion Locations
1. Police Department Emergency Operations Center
2. Central Library Friends Meeting Room
3. Oasis Senior Center Community Meeting Room
4. Newport Coast Community Center Meeting Room
0
Cox -CNB Franchise Agreement
Page 29
EXHIBIT C
Cox Service Area
Cable'FVPranchis Ama i
City of N,w,n B.t,h
W4
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Coble P -ide,
� {x Cox
.M
® Cox -CNB Franchise Agreement
Page 30
_I
Council Unplugged?
Changes to PEG Relationship with
Time Warner and Cox Cable
January 9, 2007
Study Sessro
Newpo� Beach Cit Cou
Y ncil
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What We'll Cover
— Two Carriers
— Recent litigation settlement with TWC and
recent Franchise Agreement with Cox
• How PEG programming works today
• Dollars and (what makes) sense
• Questions
•
11
• We have a different Legal relationship with the
two companies:
Time Warner
• MOU binding for 10 years (entered into in 2006);
• One -time capital grant ($476K) and ongoing monthly Public,
Educational, and Government programming (PEG) support
($0.50 /sub /month — about $100K per year).
— Cox Communications
• Franchise Agreement (2006);
• Two capital grants -- $660K now, another $30 /new
subscribers in 2010.
How NB's PEG Programming Works
• Cable- casting of Council Meetings (the "G"
.in PEG) •
— TWC provides cameras, production equipment and
production truck, and camera crews (no cost to City);
Phone signal codes allow the feed to go Live from
truck to TWC headend in Anaheim;
— Plays out live on Channel 3 (TWC service area) and
travels to Cox side of the city (approx. Jamboree
Road). Cox receives signal simultaneously and plays
it on our Government Channel 30;
— Replays include Study Sessions /Council Meetings on
Tuesdays starting at 4pm and Sundays at 4:30 pm.
How NB's PEG Programming Works
• Educational Programming (the "E" in PEG)
— TWC side = NMUSD provides the finished tapes to TWC for replay (not
shown Five);
— COX side = Our Gov'tChanne 130 will have NMUSD board meetings on
a tape - delayed basis IF it is on our playback system.
— Also on Cox side, Cox's Channel 39 (educational programming) is
currently administered by Saddleback College.
• Public Access (the T" in PEG)
— All PA users go to Rancho Santa Margarita to Cox's studio to take
lessons and produce shows;
— Use Cox studios or at -home equipment to edit;
— Cox provides signal on Channel 31 during designated times,
— TWC currently uses last hour of schedule allocated to PA shows.
What should we do?
• Option One:
— Rent or purchase used cameras, hire free - Lancers to
keep Council meetings on the air.
— Improve editing equipment in small room in back of
CC Chambers.
— Save most of $1.13 IVIN for new control room and
robotic cameras when City Hall decision is made.
— Use TWC's ongoing support $$ for freelancers, •
production specialist (editing, tape, DVD duplication)
and supply costs.
0
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CITY OF NEWPORT BEACH
CITY COUNCIL STAFF REPORT
Agenda Item No. 7 .
July 27, 2004
TO: MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Dave Kiff, Assistant City Manager, 949 -644 -3002
d kiff(a)city. newport- beach.ca. us
Robin L. Clauson, Assistant City Attorney, 949 - 644 -3131
rclauson(acity. newport- beach.ca. us
Marilee Jackson, Public Information Officer, 949- 644 -3031
mviackson(a)city. newport- beach,ca. us
SUBJECT: Update on Cable Television Franchise Negotiations
ISSUE:
Why has the City taken so long to re- negotiate franchise agreements with its two
cable television providers?
RECOMMENDATION:
Receive and file report.
DISCUSSION:
The following paragraphs attempt to directly answer the question above (as asked by
Council Member Heffernan on July 131', 2004). For more detailed information about the
cable franchise negotiations, the City's adoption of a new Cable Communications
Franchises Ordinance, the new Wireless Telecommunications Ordinance, and the Public
Rights -of -Way Ordinance, please see the City's archives.
The Franchise Agreement(s). Since the adoption of the Cable Communications
Franchises Ordinance (Chapter 5.44 of the NBMC), the staff team (Bill Marticorena of
Rutan and Tucker, Assistant City Attorney Robin Clauson, Assistant City Manager Dave
Kiff, and PIO Marilee Jackson) has entered into the final phase of its efforts: the
negotiation of two new 'franchise agreements (which mirror each other) with Cox and
Adelphia. The agreements will reflect a previously- approved "Statement of Minimum
Goals" and Chapter 5.44. As of the date of this report:
• We have issued a Draft Franchise Agreement to each company and asked them
to respond to us in writing as to their concerns.
Update on Cable Teleon Franchise Agreements
July 27, 2004
Page 2
• We have met with each company twice and listened to their comments about the
Draft Agreement:
• We have responded to each comment verbally and have refined the draft
Franchise Agreement accordingly — at this point in time, we believe that the
Agreement is ready to be presented to the Telecom Committee absent two
important components (PEG and I- Net);
• We have instructed Adelphia and Cox to meet with our MIS people to determine
how and where an Institutional Network (I -Net) would work in the City;
• We have instructed Adelphia and Cox to meet together to propose a Public,
Education, and Government (PEG) Channel solution to us. Such a solution will
likely involve a capital grant or grants along, with an ongoing, payment to support
production of community programming.
We are down to weeks, not months, for the return of a formal document to the Telecom
Committee and to City Council. All Telecom and Council meetings will be public and
noticed.
Why has it taken this long? Firstly, we had to amend or wholly re -vamp three different
ordinances (Public Right -of -Way, Cable Communications Franchises, and Wireless
Telecommunications) to lay a framework for the Agreements and for the overall industry's
work in the area. Those tasks are now complete.
Secondly, it's been challenging to coordinate the schedules of the people who must attend
each meeting. Further, each time we meet we must go away from the meeting to research
issues and, if appropriate, amend the draft Agreements. Finally, we have chosen not to
combine our meetings so that both companies are not in the negotiating room at the same
time — this makes for a more extended schedule than had we met with them together.
About 95% of the Agreements are fairly standard versions of the ones that Mr. Marticorena's
clients (cities and counties) have adopted. Both Cox and Adelphia companies have seen it
time and time again and it is in its near final form. As noted above, the other 5% includes
several important issues:
• How many channels will be dedicated for PEG -- now and in the future (in case our
community programming grows).
• How much money might be forthcoming for a capital grant to enable us to install one-
time' projects like cameras in City Hall, a computer editing bay, and more.
• How many remote City facilities will be hooked up with a network (called the
"Institutional" or "1- Net" we talk about).
• How much will the companies provide on an ongoing basis per subscriber to support
community programming.
Not surprisingly, areawide research shows that Cox and Adelphia have given a variety of
capital grants, a variety of sums per subscriber, and different I -Net services to different
municipalities. The City has been fairly aggressive in stressing that we know what other
cities have received and that we expect similar treatment by our cable providers.
Update on Cable T69ision Franchise Agreements
July 27, 2004
Page 3
0
About the Expired Franchise Agreements. Mr. Marticorena has opined that the Franchise
Agreements which have been extended until July 25, 2004 do not need to be extended
another time. As such, we recommend that the City Council receive and file this item and
await the Telecom Committee's report out of a formal franchise Agreement (there will be
two agreements that mirror each other except for the name of the franchisee).
Environmental Review: This Agenda Item does not require environmental review.
Public Notice: This agenda item may be noticed according to the Ralph M. Brown Act
(72 hours in advance of the public meeting at which the City Council considers the item).
Funding Availability: Not applicable.
Alternatives: Not applicable.
Submitted by:
Dave Kiff I V
Assistant City Manager
11
Robin Clauson Marilee Jackson �
Assistant City Attorney Public Information
x¢200-z00q)
CITY OF NEWPORT BEACH
CITY COUNCIL STAFF REPORT
Agenda Item No. 19
May 11, 2004
TO: MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Robin L. Clauson, Assistant City Attorney, 949 - 644 -3131
rclauson (a)city. newport- beach: ca.us
Dave Kiff, Assistant City Manager, 949 -644 -3002
dkiffna.city:newport- beach.ca. us
Marilee Jackson, Public Information Officer, 949- 644 -3031
m vi ackson((Dcity. newport- beach.ca. us
SUBJECT: Cable Communications Franchises Ordinance (Vt Readh
ISSUE:
r
MM .L 12b04
HVi , Lubq
Should the City Council adopt a new ordinance relating to cable communications
franchises?
RECOMMENDATION:
1. Introduce Ordinance No. 2004 - relating to Cable Communications
Franchises; and
2. Pass to second reading on May 25, 2004..
DISCUSSION:
In the 1960s, when the City of Newport Beach entered into two separate franchise
agreements with companies that provide cable television service, cities across the nation
had a significant amount of say in cable companies' operations, including:
• Rates and rate increases
• Customer service standards
• Channel selections and placement
Cities were able to dictate these aspects of cable companies' operations because the
cable companies used the public right -of -way to lay the cable ".plant" (plant includes
coaxial cable, boxes in the rights -of -way, connections to homes, etc).
Cable Commotion Franchises Ordinance
May 11, 2004
Page 2
Federal law has changed significantly since the City adopted its franchise agreements.
The changes, in part, took away almost all of cities' regulatory abilities relating to cable
and moved them to the Federal Communications Commission (FCC or www.fcc.gov).
Today, several different laws, ordinances, and agreements direct our decisions about
cable television. Attachment A contains a summary of the federal Acts.
The Effect of Changes in Law. It's important to remind the Council and Newport Beach
residents that:
FCC regulates rates, not cities. The FCC alone has the power to regulate rates
and channel selections, with the lone exception of rate regulation on the basic
service tier of channels (typically Channels 2 -13 and PEG channels). Cities can
only regulate basic tier rate increases if fully certified by the FCC to do so. Cable
customers should note that cable companies rarely, if ever, raise the rates on this
tier - much more frequent are rate increases on the larger (and unregulated)
broadcast basic tier (Channels 14 -65 and up).
• Other tiers are generally unregulated. In March 1999, the FCC (generally)
deemed many cable systems subject to "effective competition" from satellite dish
services and removed almost all rate regulation from cable TV.
Cable TV in Newport is not literally a monopoly. Cities like Newport Beach have
non - exclusive franchise agreements. Any cable provider can come into the city
limits, negotiate a franchise agreement, lay new cable, and compete directly with
either Cox or Adelphia. Similarly, Cox can attempt to compete directly with
Adelphia and vice- versa. But doing so requires significant' investment in new cable
infrastructure, because each cable company owns the cable in the ground (and on
poles). Very few companies anywhere in the nation 'overbuild" other systems.
• Denial of renewal is extremely difficult and expensive.. Cities cannot typically
deny a cable provider an opportunity to renew an existing franchise agreement.
Internet services are unregulated. Courts have ruled that the provision of
Internet service over cable is not a cable - related service and therefore not subject
to municipal regulation. Newport Beach can do very little to help cable customers
interact with their Internet Service Providers (ISPs).
Formation of Telecom Committee. With the franchise agreements about to expires in
November 2000, the City Council formed the Telecommunications Ad Hoc Committee
and directed it to address the following issues:
1. UPDATING THE CABLE TELEVISION ORDINANCE. Chapter 5.44 of the NBMC
requires significant amendments before the City can enter into any effective
franchise agreements with Adelphia and Cox.
2. UPDATING THE MUNICIPAL CODE AND ENACTING A COUNCIL POLICY
RELATING TO WIRELESS TELECOM. Council and staff believed that the City
Cable Communons Franchises Ordinance
May 11; 2004
Page 3
should add a new section to the municipal code relating to telecommunication to
effectively address:
• Where to site new wireless antennas;
• Whether and where to use City -owned property or rights -of -way for antennas;
• What design and structural standards the City should apply to antennas,
whether placed on rights -of -way or public or private property;
• What fee should be levied for the use of the public property for antennas;
• How to effectively ensure that the City's emergency radio network is not
adversely impacted by siting activity.
The Wireless Telecom Ordinance is now Chapter 15.70 of the NBMC. Council
Policy L -23 (The Siting of Wireless Telecommunications Equipment on City -Owned
Land) governs City actions relating to the use of City property for wireless telecom.
3. FRANCHISE RENEWAL NEGOTIATIONS. Given the pending expiration of the two
cable television franchise agreements, the Committee was tasked with performing a
community needs assessment and bringing to Council a Statement of Minimum
Goals. The latter was accomplished in April 2003.
The Telecom Committee includes Council members John Heffernan (Chair) and Richard
Nichols and community members Leslie Daigle and Don Boortz.
Why do we need a new Cable Ordinance? The Municipal Code (Chapter 5.44 --
Community Antenna Television) relating to cable television is somewhat outdated. It was first
adopted in 1966 and has changed since then in bits and pieces, even as:
• Federal and state telecommunications and cable law dramatically changed — in doing
so, the changes nullified portions sections of the code.
• Technology dramatically changed (digital TV, satellite TV, cable - carried Internet, pay-
per-view, digital cable radio, fiber optic lines, telephony over cable, etc);
• The City saw a series of providers transfer their Franchise Agreements from one to
another via consolidations and sales; and
• Adelphia filed for reorganization.
Further, advent of high -speed data, telephony, and other services over the cable system
have led Special Counsel Bill Marticorena of Rutan and Tucker to advise a more
comprehensive re -write and reorganization (and re- titling) of Chapter 5.44.
A note about the Charter. The City Charter's section on franchises (Article X111)
requires the City Council to adopt franchises via ordinance and to hold a public hearing
prior to granting a franchise. It limits all franchise terms to 25 years or less if a
determinate term is stated. The Article allows indeterminate terms but specifies that the
City may end the franchise and possess the franchisee's property if the franchisee is out
of compliance with the franchise agreement (Section 1302).
aCable Commetions Franchises Ordinance
May 11, 2004
Page 4
Preparing a New Ordinance. Since at least Fall 2000, the City has retained Mr.
Marticorena to assist us in our telecommunications work. Mr. Marticorena has extensive
experience in all phases of franchise renewals and ordinance amendments. Additionally,
upon recommendation of the Telecom Committee, we hired Sue Buske of the Buske
Group to conduct a statistically valid Cable Needs Assessment (CNA) to determine the
community's desires and concerns regarding cable TV (for more information about the
Assessment itself, see the Agenda Item from April 8, 2003 whereby the City Council
formally accepted the Assessment).
The Assessment and the Statement of Minimum Goals will be used to negotiate a new
Franchise Agreement with each of the two cable providers. A Franchise Agreement is
separate and distinct from a new Cable Communications Ordinance as follows:
• The Ordinance reflects the regulatory environment and practices that any cable
provider must follow while doing business in the City.
The Agreement(s) reflects specific permission to a specific company to use the
public right -of -way to operate a cable system. Included in the permission are
negotiated terms by the company and the City as to adequate compensation paid
to the City and its residents for the use of the right -of -way. Adequate
compensation may include the 5% franchise fee, dedication of equipment,
dedication of specific channels for Public, Educational, and Government ( PEG)
services, and more.
More about the Proposed Cable Communications Franchises Ordinance. The
proposed ordinance addresses the following issues (and others):
• Definitions. Sets forth and updates definitions used in the Cable
Communications industry.
• Authorization. Authorizes the City to grant non- exclusive franchises for cable
communications services.
• Rights, Reserves certain rights to the City and the cable subscriber; reserves
certain rights for the Franchisee;
• Finances. Explains how payments to the City are made in exchange for a cable
company's use of the public right -of -way; requires a performance bond
• Services. Explains the services that can be required of a provider;
• Construction. Describes the construction standards that a provider must meet;
• Customer Service. Describes the customer service obligations of a provider.
• Records Inspection, Audit. Allows for the City's inspection of certain records,
allows for the conduct of a bi- annual audit; and
• Termination. Describes reasons for termination and process to terminate.
Provider Review and Comment. Following a City Council hearing in November 2003,
the Telecom Committee took testimony from cable providers and utility companies over a
series of meetings up until April 29, 2004. In addition, since the Council's adoption of the
Statement of Minimum Goals in April 2003, a staff team (Mr. Marticorena, Ms. Clauson,
Ms. Jackson, and Mr. Kiff) have met at least two times each with representatives
Cable Communens Franchises Ordinance
May 11, 2004
Page 5
(including counsel) of Adelphia and Cox. We have provided both companies with an
opportunity to review the draft Ordinance and to discuss the Ordinance with us and have
made substantive revisions that are in the version attached to this staff report.
One significant change from the time that Council last heard this item (November 2003)
is the complete separation of issues relating to the Public Right -of -Way. Both cable
companies alleged in their correspondence with us that it would be unfair to place certain
PROW requirements on them that we did not require of other providers. We agreed, and
have p repared a complete PROW 0 rdinance f or y our c onsideration (anticipated to be
read for the first time on May 11, 2004).
This Agenda Item asks the Council to review the proposed Cable Communications
Franchises Ordinance, to read it for the first time, and to pass it to second reading and
adoption (set for May 25, 2004). Ordinances like this one take effect 30 days following
adoption.
What's Next. If the Council adopts this Ordinance, the staff team and the Telecom
Committee would enter the final phase of their efforts -- the negotiation of new Franchise
Agreements with Cox and Adelphia reflecting the Statement of Minimum Goals and the
newly- adopted Cable Communications Ordinance. We anticipate bringing the negotiated
Franchise Agreements to Council in Summer 2004.
Environmental Review: This Agenda Item does not require environmental review.
Public Notice: This agenda item may be noticed according to the Ralph M. Brown Act
(72 hours in advance of the public meeting at which the City Council considers the item).
Submitted by:
Dive iff % \ Robin Ciauson Marilee J cksbn
Ass ant City Manager Assistant City Attorney Public Information Officer
Attachments: Attachment A -- FCC Authority
Attachment B -- Proposed Ordinance on Cable Communications Franchises
Cable Commotion Franchises Ordinance
May 11, 2004
Page 6
Attachment A
FEDERAL COMMUNICATIONS COMMISSION (FCC) AUTHORITY
P 1984 Cable Act, The Federal Communications Commission (FCC) established new
policies over cable TV via the Cable Communications Policy Act of 1984. Among
other things, the 1984 Act began to define the boundaries between federal, state, and
local governments. The 1984 Act requires cable companies to act under franchise
agreements and prohibits local governments from offering exclusive franchise
agreements. This Act also limited the cable franchise fee to 5% of the cable company's
gross annual revenue.
The 1984 Act also:
• Allowed local agencies to require that cable companies set aside channels for public,
educational, or governmental (PEG) use.
• Established "leased commercial access" allowances so that parties other than the cable
company could air video programming without cable company oversight.
• Placed restrictions on telephone companies that wanted to provide television service.
P 1992 Cable Act. In response to price hikes in the cable industry that far outpaced
inflation, Congress passed the Cable Television Consumer Protection and
Competition Act of 1992. The 1992 Act stated the FCC's hope that the market would
begin to regulate cable TV activities while still protecting consumer interests. Under the
1992 Act, local governments could select a cable franchisee and regulate in any areas
that the FCC did not pre -empt. Prior to 1992, local governments could regulate all rates
— but with the 1992 Act in place, the FCC took over rate regulation of the cable
programming tier (see below) and allowed cable companies to be completely exempt
from rate regulation if they could show that the cable companies were subject to
"effective competition" in a region.
In the 1992 Act, the FCC defines three tiers of cable services:
• the basic service tier (lower channels originating in the region which must be carried
by the cable company). Local governments may regulate rates associated with this tier
when certified by the FCC to do so.
• the cable programming service tier ( "CPST ") —this includes all non -basic channels
provided by a cable company but not sold on a pay - per -view basis. Effective March 31,
1999; the FCC has declared this tier of service subject to "effective competition" and
NO LONGER regulates rate changes to this tier.
• the per channel or per - program tier — provided as single channels for which the cable
company charges a separate rate. This tier is unregulated.
Per the 1992 Act, local governments must apply for certification with the Commission if
they want to regulate rates in the basic service tier. We can do so by submitting a "Form
328" to the FCC. The City has not asked the FCC to certify the City as a basic tier
Cable Communons Franchises Ordinance
May 11, 2004
Page 7
regulator. This is in part because cable companies rarely, if ever, increase their rates on
the basic tier since the development of the 1992 Act — in recent years, cable companies
have reduced and /or maintained their basic tier rates while increasing their CPST rates.
Another important aspect of the 1992 Act set customer service standards for cable
companies —all of which must be enforced by local franchise authorities. Pursuant to the
standards, cable companies must:
Phone and Billing Services
• Maintain a local phone line available 24 hours, seven days a week.
• Not use voice mail during working hours— a real person must answer the phone.
• Place its bill payment office in a convenient location. The office must be open at
least one night a week and /or some weekend hours.
• Answer all calls to the cable company office within 30 seconds of the time that a
connection is made.
Installations and Service Calls
• Complete a standard installation within seven days of a service call.
• Begin working on a service interruption call within 24 hours of notification.
• Offer specific appointment times or four -hour blocks of time for all service calls.
• Have installers call if they are running late to reschedule at the customer's
convenience.
Rate or Service Changes
• Give 30 days advanced notice for all rate or service changes.
• Respond to billing complaints within 30 days.
P 1996 Telecom Act. Most recently, Congress amended the laws even further via the
adoption of the Telecommunications Act of 1996. The 1996 Act was an attempt to
accelerate private sector deployment of services to all residents by opening up all
telecom markets to competition, including allowing cable companies to provide phone
service and vice - versa.
The 1996 Act provided that the CPST would be subject to FCC regulation until March 31,
1999. The Act also prohibited individuals from sending complaints directly to the FCC —
instead, individuals must file complaints with the franchise authority (us) and we forward
one or more complaints to the FCC for review via an FCC "Form 329." Before sending a
complaint to the FCC, we must notify the cable company of the complaint and allow them
30 days to respond. We followed this process earlier this year in forwarding a rate
complaint by a resident.
The 1996 Act also:
• Requires television manufacturers to equip their TVs with a V -Chip.
• Requires broadcast and cable industry representative to develop voluntary rules
that rate programs for sexual or violent content.
Cable Commetions Franchises Ordinance
May 11, 2004
Page 8
• Requires cable companies to fully scramble audio and video channels not
specifically subscribed by a household.
• Allowed some telephone companies to provide video programming via open video
systems (Pacific Bell Video Service [ "PBVS "] is an open video system that delivers
both local programming and national channels via a small dish or antenna). The
1996 Act exempted these systems from city franchise requirements.
• Limits local franchise authority fees to revenue derived from "cable services."
ORDINANCE NO. 2004 —
0
AN ORDINANCE OF THE CITY OF NEWPORT BEACH RELATING TO
FRANCHISES FOR CABLE COMMUNICATIONS SYSTEMS.
THE CITY COUNCIL OF NEWPORT BEACH DOES ORDAIN AS FOLLOWS:
Section 1. Chapter 5.44 of the Newport Beach Municipal Code entitled "Community
Antenna Television" is hereby repealed.
Section 2. Chapter 5:44 of the Newport Beach Municipal Code entitled "Cable
Communications Franchises" is hereby added and shall read as follows:
Sections:
Section 5.44.010
Section 5.44.020
Section 5.44.030
Section 5.44.040
Section 5.44.050
Section 5.44.060
Section 5.44.070
Section 5.44.080
Section 5.44.090
Section 5.44.100
Section 5.44.110
Section 5.44.120
Section 5.44.130
Section 5.44.135
Section 5.44.140
Section 5.44.010
Chapter 5.44
CABLE COMMUNICATIONS FRANCHISES
Title.
Definitions.
Grant of Franchise.
Rights Reserved to the City.
Rights of Subscribers.
Finance.
Services.
Design and Construction.
Operations And Maintenance.
Violations.
Termination and Related Rights.
Franchise Applications.
Records; Reports; Right to Inspect and Audit; Experts.
Indemnity and Liability Insurance
Miscellaneous Provisions.
Title.
This Chapter is known and may be cited as the "Cable Communications Franchises
Chapter."
Section 5.44.020 Definitions.
a. For the purposes of this Chapter, the following words, terms, phrases, and their
derivations have the meanings given herein. Terms defined in the Cable Act shall have the
same meanings herein unless expressly defined otherwise. When not inconsistent with the
context, words used in the present tense include the future tense, and words in the singular
number include the plural number.
"Affiliated Person" or "Affiliates" means each Person who falls into one or more of the
following categories: (i) each Person having, directly or indirectly; a Controlling Interest in
0 0
Company; (ii) each Person in which Company has, directly or indirectly, a Controlling Interest;
(iii) each officer, director, general partner, limited partner holding an interest of five percent (5 %)
or more in a joint venture, or joint venture partner in Company's Cable System in the City; and
(iv) each Person, directly or indirectly, controlling, controlled by, or under common Control with
Company; provided that "Affiliated Person" excludes the City, any limited partner holding an
interest of less than five percent (5 %) in a Company, or any creditor of Company, solely by
virtue of its status as a creditor, and which is not otherwise an Affiliated Person by reason of
owning a Controlling Interest in, being owned by, or being under common ownership, common
management, or common Control with Company.
"Basic Service" or "Basic Cable Service" or "Basic Service Tier" means the lowest
Service Tier which includes the retransmission of local television Broadcast Signals and Public,
Educational, and Governmental Access Channels..
"Broadcast Signal" means a signal transmitted over the air to a geographically dispersed
public audience and received by a °Cable System.
"1984 Cable Act" means the Cable Communications Policy Act of 1984.
"1992 Cable Act" means the Cable Television Subscriber Protection and Competition Act
of 1992.
"Cable Act" means the Cable Communications Policy Act of 1984, as amended by the
Cable Television Subscriber Protection and Competition Act of 1992 and by the
Telecommunications Act of 1996.
"Cable Operator" means any Person or group of Persons (i) who provides Cable Service
over a Cable System in the City and, directly or through one or more Affiliates, owns a significant
interest in that Cable System; or (ii) who otherwise controls or is responsible for, through any
arrangement, the management and operation of a Cable System in the City.
"Cable Review Board" shall mean an entity formed by resolution of the City that reviews
and hears issues relating to Cable Service, a Cable Franchise, or a Company's operations and
maintenance of Cable Services.
"Cable Service" or "Service" means (i) the one -way transmission to Subscribers of video
programming or other programming service; and (ii) subscriber interaction which is required for
the selection of or use of video programming or other programming service.
"Cable System" or "Cable Communications System" or "System" means a facility,
consisting of a set of closed transmission paths and associated signal generation reception; and
control equipment that is designed to provide Cable Service, which includes video programming,
and which is provided to multiple Subscribers within the City; but this term does not include: (i) a
facility that serves only to retransmit the television signals of one or more television broadcast
stations; (ii) a facility that serves Subscribers without using any public right -of -way; (iii) a facility
of a common carrier which is subject, in whole or in part, to the provisions of Title II of the
Communications Act of 1934 (47 U.S.C. § 201 et seq.), except that the facility shall be
considered a Cable System (other than for purposes of section 621(c) of the Cable Act) to the
extent the facility is used in the transmission of video programming directly to Subscribers,
unless the extent of the use is solely to provide interactive on- demand services; (iv) an open
video system that complies with section 653 of the Cable Act; or (v) any facilities of any electric
utility used solely for operating its electric utility systems.
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"Channel" means a portion of the electromagnetic frequency spectrum which is used in a
cable system and which is capable of delivering a television channel (as television channel is
defined by the FCC by regulation).
"City" means the City of Newport Beach, California, acting by and through its City
Council, or a representative as the governing body may designate to act on cable matters on its
behalf.
"Company" means the Person granted a Franchise to install, operate, maintain, or
reconstruct a Cable System and the lawful successors, transferees, or assignees of that Person.
"Company Manager" means an employee of the Company who is designed by the
Company in writing to the City to be the contact person for Company in accordance with the
provisions of this Chapter.
"Complaint" means a dispute in which a Subscriber notifies Company of an outage or
degradation in picture quality, billing or other issue pertaining to the Subscriber's Cable Service
which is not corrected during the initial telephone or service call.
"Control" or "Controlling Interest" means actual working control in whatever manner
exercised, including, without limitation, working control through ownership, management, debt
instruments, or negative control, as the case may be', of the Cable System or a Company. A
rebuttable presumption of the existence of Control or a Controlling Interest shall arise from the
beneficial ownership, directly or indirectly, by any Person or group of Persons acting in concert
(other than underwriters during the period in which they are offering securities to the public) of
twenty -five percent (25 %) or more of any Person (which Person or group of Persons is referred
to as "Controlling Person'), or being a party to a management contract to manage the system, or
any material portion thereof, in lieu of the Company.
"Converter" or "Terminal" means a device located at a Subscriber's premises that
converts signals from one frequency to another or otherwise processes signals for use by
Subscribers.
"Director" means the Director of the City's Department of Public Works or his or her
designee.
"Drop" means the cable connecting the Cable System's plant to equipment at the
Subscriber's premises.
"Facilities" or "Facility" shall have the same meaning in this Chapter as these terms have
in Chapter 13.20 of the Newport Beach Municipal Code.
"FCC" means the federal Communications Commission or its designated
representatives.
"Franchise" means a written legal undertaking or action of the City which authorizes a
specific Person to use the City's streets and public ways for the purpose of installing, operating,
maintaining, or reconstructing a Cable System to provide Cable Service.
"Gross Annual Revenue" or "Gross Annual Receipts" or "Gross Receipts" means all
revenue, as determined in accordance with Generally Accepted Accounting Principles, which is
received, directly or indirectly, by the Company and by each Affiliated Person from or in
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connection with the distribution of any Cable Service, and any other Service which .may, under
now or then applicable federal law, be included in the Cable Act definition for the purpose of
calculating and collecting the maximum allowable franchise fee for operation of the System,
whether or not authorized by any Franchise, including, without limitation, leased or access
channel revenues and programming fees of any kind, received, directly or indirectly, from or in
connection with the distribution of any Cable Service. It is intended that all revenue collected by
the Company, and by each Affiliated Person, from the provision of Cable Service over the
System, whether or not authorized by the Franchise, be included in this definition. Gross Annual
Revenue also specifically includes::(i) the fair market value of any non - monetary (i.e., barter)
transactions between Company and any Person, other than an Affiliated Person, but not less
than the customary prices paid in connection with equivalent transactions; (ii) the fair market
value of any non - monetary (i.e., barter) transaction between Company and any Affiliated
Persons, but not less than the customary prices paid in connection with equivalent transactions
conducted with Persons who are not Affiliated Persons; (iii) any revenues generated from the
provision of Internet services and /or broadband services which utilize the Cable System for
delivery and must not be excluded pursuant to applicable law; and (iv) any revenue received, as
reasonably determined from time to time by the City, through any means which is intended to
have the effect of avoiding the payment of compensation that would otherwise be paid to the
City for the Franchise granted. Gross Annual Revenue also includes any bad debts recovered.
Gross Annual Revenue also includes all (100 %) advertising revenue (without exclusions for any
commissions, fees, or other costs incurred in securing the revenue) which is received directly or
indirectly by the Company, any Affiliated Person, or any other Person from or in connection with
the distribution of any Service over the System or the provision of any Service - related activity in
connection with the System, or allocable thereto based upon subscriber counts. Gross Annual
Revenue does not include: (i) the revenue of any Person to the extent that the revenue is also
included in the Gross Annual Revenue of the Company; (ii) taxes imposed by law on
Subscribers which the Company is obligated to collect; and (iii) amounts which must be
excluded pursuant to applicable law.
"Pay Cable," "Pay Service," "Premium- Service" or "Pay Television" means programming
choices (such as movie channels, pay - per -view, video on demand) offered to Subscribers on a
per - Channel, per- program or per -event basis.
"PEG Channel" means collectively, the channel capacity dedicated to non - commercial
public, education or government access programming.
"Person" means any person, corporation, partnership, proprietorship, individual, or
organization authorized to do business in the State of California.
"Plant" means the transmitting medium and related equipment which transmits signals
between the Headend and Subscribers, including Drops.
"Public Right -of -Way" or "Right of Way" shall have the same meaning in this Chapter as
the term or terms have in Chapter 13.20 of the Newport Beach Municipal Code.
"Residential Dwelling Unit" or "Dwelling Unit" means a home, mobile home,
condominium, apartment, cooperative unit, and any other individual dwelling unit.
"Service Area" or "Franchise Service Area" means the entirety of the City of Newport
Beach, or as further defined in the Franchise.
"Service interruption means the loss of picture or sound on one or more cable channels.
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"Service Tier" or "Tier' means a category of Cable Service or other Services provided by
a Cable Operator and for which a separate rate is charged by the Cable Operator, other than per
channel or per event programming or legitimate packages of per channel or per event
programming.
"Subscriber" means any resident, business, or other Person that lawfully subscribes to
and receives, a Cable Service provided by the Company by means of or in connection with its
Cable System.
"Telecommunications Act" means the Telecommunications Act of 9996
"Territory" shall mean land within the City's boundaries at the time of this Chapter's
adoption and, if later annexed or reorganized into the City's boundaries, land added to the City
at the time of annexation or reorganization.
"Unit" means a discrete place where System Services are used, such as a residence,
apartment, office, store, etc.
b. Terms Not Defined. Words, terms, or phrases not defined herein shall first have the
meaning as defined in the Cable Act, and then the special meanings or connotations used in
any industry, business, trade, or profession where they commonly carry special meanings. If
those special meanings are not common, they will have the standard definitions as set forth in
commonly used and accepted dictionaries of the English language.
Section 5.44.030 Grant of Franchise.
a. Authority to Grant Franchises. Pursuant to the Newport Beach City Charter
(commencing with Section 1300), the City may grant a Franchise to provide Cable Service to
any Person who offers to provide a System pursuant to this Chapter.
b. Form. A Franchise may, at City's sole option, take the form of an ordinance, agreement,
license, permit, contract, resolution, or any other form elected by City.
c. Grants Not Required. Consistent with applicable state and federal law, no provision of
this Chapter requires the granting of a Franchise' when, in the opinion of the City, it is in the
public interest not to do so.
d. Franchise Purpose. The purpose of a Franchise is to identify and authorize the
operation of a Cable Communications System by a specific Company, and to identify and
specify those terms, conditions, definitions, itemizations, specifications and other particulars of
the agreement between the City and a Company. In so doing, a Franchise may clarify, extend,
and interpret the provisions of this Chapter. Where a Franchise and this Chapter conflict, both,
shall be liberally interpreted to achieve a common meaning or requirement. In the event this is
not possible within reasonable limits, the Franchise shall prevail.
e. Compliance with Law. Neither this Chapter nor a Franchise granted under it relieves a
Company of any requirement of City, or of any ordinance, rule, regulation, or specification of City
now or hereafter in effect pursuant to City's police power, including, but not limited to', the
obtaining of a business license, and the payment of all permit and inspection fees required from
time to time by the City.
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f. Franchise Non - Exclusive. City may, at its option, grant one or more Franchises to
construct, operate, maintain, and reconstruct a System. These Franchises shall constitute both
a privilege and an obligation to provide the System and Cable Services required by this Chapter
and the Franchise.
g. Duration. The term of any Franchise, and all rights, privileges, obligations and
restrictions pertaining thereto, shall be specified in the Franchise. Pursuant to Section 1302 of
the City Charter, in no event shall the term of any Franchise exceed 25 years. The effective
date of any Franchise shall be as specified in the Franchise.
h. Use of Public Rights -of -Way. Pursuant to Chapter 13.20 of the Newport Beach
Municipal Code and for the purposes of operating and maintaining a System in the franchised
Service Area, a Company may place and maintain within the Public Rights -of -Way the property
and equipment that conforms to the laws and standards of the City and as are necessary and
appurtenant to the operation of the Cable Communications System. Prior to construction or
alteration of the Plant in Public Rights -of -Way, a Company shall comply with Chapter 13.20.
i. Use of Other Utilities. Any Person who provides a System or Services as defined herein
shall be deemed a Company and must obtain a Franchise. If a Company uses distribution
channels furnished by any telephone company, other public utility, or any other entity which are
functionally equivalent to those used by a Cable Operator, the Company shall be required to
comply with all of the provisions of this Chapter.
j. Restrictions against Transfers. Unless prohibited by federal law, neither the franchise
nor any rights or obligations of the Company in or pursuant to the franchise, or the System shall
be transferred in part or as a whole, by assignment, trust, mortgage, lease, sublease, pledge or
other hypothecation, and shall not be sold, transferred, leased, assigned, or disposed of in part
or as a whole, either by forced sale, merger, consolidation, or otherwise, nor shall title thereto,
either legal or equitable, or any right or interest therein, pass to or vest in any Person, nor shall a
transfer of Control of the Company or the System occur, either by act of the Company, by
operation of law or otherwise, in each case without the prior written consent of the City, which
consent shall not be unreasonably withheld, and which shall be expressed by Resolution and
then only under conditions as may be therein prescribed.
k. Effect of Unauthorized Action.
1. The taking of any action described in paragraph 0) without the prior consent of the
City shall:
i. Be deemed a material breach of Franchise; and
ii. Among other remedies available to the City; be subject to a liquidated damages
assessment, which assessment shall be up to $5,000.00 a day until the taking of
an action described in the foregoing paragraph 0) is approved, or if not approved,
until the prior ownership, Control or other status quo ante is restored to a
condition satisfactory to the City. The amount of the assessment shall be
determined by the City.
2. If the City denies its consent to any action and the action has nevertheless been
effected, the Council may revoke the Franchise unless the ownership of the
Franchise and /or System or Control of the Company, the System or the Franchise is
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promptly restored to its status prior to the unauthorized action or to a status
acceptable to the City.
3. The grant or waiver of any one or more consents shall not render unnecessary any
subsequent consent or consents, nor shall the grant of any consent constitute a
waiver of any other rights of the City.
I. Additional Restrictions.
1. The Company shall not enter into any management contractor other arrangement for
the management of the System, or sell or otherwise transfer the System, or any
material portion thereof, with or without the Franchise, without the prior written
consent of the City.
2. Any use by the Company of its own or an existing MATV, SMATV, MDS, DBS, or
other system in any structure located in the Service Area for the distribution of any
Service which would otherwise be distributed over the System, shall not relieve the
Company of its obligation to construct, operate, and maintain the System in the
structure pursuant to this Chapter and applicable law.
m. Approval Procedure.
The Company shall promptly notify the City of any action or proposed action requiring
consent of the City pursuant to this Section. The Company shall submit to the City
an original and four copies, unless otherwise directed, of its petition on FCC Form
394, requesting consent, which petition shall fully describe the action or proposed
action and clearly state the basis on which the petition should be approved. The
petition shall also contain all reasonably appropriate documentation. The 120 -day
period to review a transfer request under Section 617 of the Cable Act shall not
commence until all of the information required by FCC Form 394, any applicable
State law, the Franchise and this Chapter is submitted to the City, including but not
limited to:
Name and address of the proposed transferee and identification of the
ownership and control of the transferee, including: the names and addresses
of the ten (10) largest holders of an ownership interest in the transferee and its
cable affiliates and all persons with twenty (20 %) percent or more ownership
interest in the transferee and its cable system; the Persons who Control the
transferee; all officers and directors of the transferee and its cable affiliates;
and any other Cable System ownership interest or each named Person;
ii. A demonstration of the transferee's technical ability and legal qualifications to
construct, maintain, upgrade and operate the System, including identification of
key personnel;
iii. The transferee must show that it, as well as any person which Controls the
transferee, has not, at any time during the ten (10) years preceding the
submission of the petition; been convicted of any act or omission of character
that the transferee cannot be relied upon to deal truthfully with the City and the
Subscribers of the System, or to substantially comply with its lawful obligations
under applicable law;
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11
iv. The transferee must certify that no elected
other than shares in a publicly traded
Affiliated Person of the transferee;
11
official of the City holds an interest,
company, in the transferee or an
V. Current financial statements showing the financial condition of the System as
of the date of the petition. If a Company does not maintain financial records at
the System level, then the Company may provide financial statements of the
smallest reporting entity which includes the System;
vi. A statement prepared by a certified public accountant or responsible official of
the transferee regarding the transferee's or assignee's financial ability to
Construct, upgrade, maintain and operate the System;
vii. A description of the transferee's prior experience in Cable System ownership,
construction and operation and identification of communities in which the
transferee or assignee or entities under common Control with the transferee
have a cable franchise or license;
viii. A description of the transferee's plans for meeting any System obligations
under the Franchise, including, but not limited to, any upgrade obligations,
upgrade completion schedules, channel capacity requirements, technical
design requirements, and performance characteristics;
ix. An affidavit or declaration of the transferee or authorized officer certifying the
truth and accuracy of the information in the petition or other written request,
acknowledging the enforceability of the commitments of the petition or other
written request, and certifying that the proposal meets all federal and state law
requirements; and
X. A summary of the plans and commitments of the transferee to remedy specific
and known defaults and violations, if any, in the operation of the System under
the Franchise.
2. At any time during the review process, the City reserves the right to require additional
supporting documentation from the Company or any other Person involved in the
action or proposed action. The Company shall provide all reasonably requested
assistance to the City in connection with any inquiry and, as appropriate, shall use its
best efforts to secure the cooperation and assistance of all other Persons involved in
the action.
n. Conditions. As a condition to the granting of any consent required by this Section, the
City may require that the transferee execute an agreement, in a form and containing reasonable
conditions as may be required by the City, specifying that the transferee assumes and agrees to
be bound by all applicable provisions of the Franchise. The execution of the agreement by the
transferee shall in no way relieve the Company, or any other transferor involved in any the
action, of its obligations pursuant to the Franchise during its tenure as the franchisee up to and
including the date of execution of the Agreement without the consent of the City.
o. Reimbursement of Processing and Review Costs. To the extent not prohibited by
applicable law, a Company shall reimburse the City for the City's reasonable processing and
review expenses in connection with a transfer of the Franchise or a change in Control of the
Franchise, including without limitation, costs of administrative review, financial, legal, and
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0 0
technical evaluation of the proposed transferee; costs of consultants (including technical and
legal experts), notice and publication costs, and document preparation expenses. A reasonable
deposit in an amount determined by the City may be required by the City. In addition, prior to
any transfer or change in Control, a Company shall reimburse the City for all of the City's
expenses in connection with evaluating or negotiating a renewal of a Company's franchise,
whether or not the renewal was ever finalized or granted. The City may send a Company an
itemized description of all charges, and that Company shall pay the amount within forty -five (45)
days after the receipt of the description.
Section 5.44.040 Rights Reserved by the City.
a. Reservation. The grant of the Franchise does not limit the rights of City under state law
with respect to its power of eminent domain.
b. Non- waiver or Bar. Neither the granting of any Franchise, nor any provisions of this
Chapter, shall constitute or be construed as a waiver or bar to the exercise of any governmental
right or power by City.
c. Delegation of Powers. Any right or power in, or duty retained by or imposed upon City,
or any commission, officer, employee, department, or board of City, may be delegated by City to
any officer, employee, department or board of City, or to an other person or entity as City may
designate to act on its behalf.
d. Right of Inspection of Construction. Pursuant to Chapter 13,20, the City shall have the
right to inspect and approve all construction, installation, or other physical work performed by
Company in the Public Rights -of -Way and on private property consistent with standards
approved by the City.
e. Right to Require Removal and Repair of Property. Pursuant to Chapter 13.20 and
consistent with applicable law; upon the lawful revocation, expiration, or termination of the
Franchise, the City shall have the right to require a Company to remove, at Company's expense,
all portions of its System and any other property from all streets and public rights -of -way within
the Franchise Service Area and to require the repair of any public facility, right -of -way, or
property damaged during the removal process within a reasonable period of time.
f. Right of Intervention. The City shall have the right of intervention in any suit, proceeding
or other judicial or administrative proceeding in which the City has any material interest, and to
which Company is party.
g. Place of Inspection. The City shall have the right to inspect Company's local premises,
and to request copies of all relevant information that is reasonably necessary for the exercise of
City's regulatory authority, upon reasonable notice at any time during normal business hours.
Any Company records kept at another place shall, within twenty (20) days of City's request, be
made available to City for City's inspection and copying. All reports and records required
pursuant to this Chapter shall be furnished at the sole expense of Company, except as
otherwise provided in Chapter or the Franchise.'
h. Printed Messages on Bills. The City shall have the right to limit printed messages on
subscriber bills to information applicable only to Subscribers within the Franchise Area.
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Section 5.44.050 Rights of Subscribers.
a. Discriminatory Practices Prohibited. A Company shall not deny Cable Service or
otherwise discriminate against Subscribers or others on the basis of race, color; religion,
national origin, sex, age, disability, or characteristics of other protected classes'.
b. Tapping and Monitoring. A Company shall not tap or monitor, or permit any other person
controlled by Company to tap or monitor, any cable, line, signal input device, or subscriber outlet
or receiver, to collect personally identifiable information (as defined in Section 631 of the Cable
Act) concerning any Subscriber whatsoever without the prior written consent of the Subscriber
or a court order; provided, however; that a Company may monitor customer service calls for
quality control purposes and may conduct system -wide or individually addressed "sweeps" for
the purpose of verifying system integrity, monitoring signal levels, or checking for unauthorized
connections to the Cable System, service levels, or billing- for -pay services.
c. Data Collection.
Except for its own use, or in connection with the provision of Cable Services or for
release of data to the City, the Company shall not permit its system to be used for
data collection purposes; nor shall it otherwise collect data which would reveal the
commercial product or other preferences or opinions of an individual Subscriber,
members of their families, or their guests, licensees or employees, unless the
Company shall have received the prior written consent of Subscriber.
2. The Company shall not disclose or permit the release or sale of data on individual
Subscribers or groups thereof, but may disclose or permit the release or sale of
aggregate data.
d. Disclosure of Subscriber Lists. The Company shall not disclose, or sell, or permit the
disclosure or sale of its subscriber list without the prior written consent of each Subscriber on a
list; provided that Company may use its subscriber list as necessary for the construction,
marketing, and maintenance of the Company's services and facilities authorized by a Franchise,
and the billing of Subscribers for Cable Services; and provided further, that consistent with
applicable law, City may use Company's subscriber list for the purpose of communication with
Subscribers in connection with matters relating to the operation, management, and maintenance
of the Cable System and for the audit of financial and other obligations pursuant to this Chapter,
any franchise, or other applicable law.
e. Disclosure of Subscriber Preferences, Company shall not disclose 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 the prior
written consent of the Subscriber.
f. Terms of Subscriber Consent.
Any written consent given in accordance with paragraph (d) shall be limited to a
period of time not to exceed one year, or a term agreed upon by the Company and
the Subscriber.
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�7
2. The Company shall not condition the delivery or receipt of Cable Services to any
Subscriber on any consent.
3. A Subscriber may at any time revoke, without penalty or cost, any consent previously
given by delivering to the Company in writing a statement of the Subscriber's intent to
so revoke.
g. Other Persons Affected. The prohibitions contained in paragraphs (a) through (e),
inclusive, of this Section apply to a Company, as well as to all of the following:
1. Officers, directors, employees, agents, and general and limited partners of the
Company;
2. Any person or combination of persons owning, holding, or controlling any corporate
stock or other ownership interests in the Company;
3. Any affiliated or subsidiary entity owned or controlled by a Company, 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 Company, shall
own, hold or control any corporate stock or other ownership interests; and
4. Any person, firm, or corporation acting or serving in the capacity of a holding or
controlling company of the Company.
Section 5.44.060 Finance.
a. Payments to City.
1. As compensation for any Franchise to be granted, and in consideration of permission
to use the City's streets and public rights -of -way for the construction, operation,
maintenance, and reconstruction of a System, a Company shall pay to the City the
amounts and in the manner specified herein and in the Franchise.
i. Payments due the City shall be computed quarterly, and shall be paid within
forty -five (45) days after the close of each calendar quarter. The payment shall
be accompanied by a report showing the basis for the computation and such
other relevant facts as may be required by the City to determine the accuracy of
the payment. A final annual reconciliation, and payment, if any, shall be
delivered to City by Company within ninety (90) days after the end of each
calendar year.
ii. If any franchise payment or recomputed amount is not made on or before the
dates specified above in subsection (i); Company shall pay as additional
compensation the greater of the following:
A. An interest charge, computed from the applicable due date, at an
annual rate equal to the prevailing commercial prime interest rate in
effect upon the due date, plus one percent (1 %).
B. A sum of money equal to $5,000 for each month, or part thereof, of
delay, which sum shall also bear interest from the due date at an
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i !
annual rate equal to the prevailing commercial prime interest rate in
effect upon the due date, plus one percent (1 %).
iii. in addition to any late payment made pursuant to subsection 3 above, if a
payment is late by sixty (60) days or more, Company shall pay a sum of money
equal to five percent (5 %) of the amount due in order to defray additional
expenses and costs incurred by City as a result of such delinquent payment.
iv. No acceptance of any payment shall be construed as a release of, or an
accord, or satisfaction of, any claim that the City might have for further or
additional sums payable under the terms of this Chapter, or for any other
performance by Company of an obligation hereunder.
2. Payments of compensation made by a Company to the City pursuant to the
provisions of this Chapter are in addition to, and exclusive of, any and all authorized
taxes, business license fees, and other fees, levies, or assessments now in effect or
subsequently adopted in accordance with state and federal law.
b. Financial Security The Franchise shall require that the Company provide Financial
Security pursuant to this section The City shall determine the appropriate level of Financial
Security, which may include all of the following protections for the City against Company default
or failure to comply with this Chapter or the Franchise. The Director shall determine the
appropriate level of Financial Security to adequately repair Public Facilities or Public Rights -of-
Way. This Security shall include:
1. Security Fund.
The City shall require the Company to deposit into a bank account established
by the City, and to maintain on deposit through the duration of the Franchise
Term, security ( "Security Fund ") for the faithful performance by Company of
all of the provisions of the Company's Construction Plan, compliance with this
Chapter, with all orders, permits and directions of the City, or any designated
representative of the City having jurisdiction over Company's acts or defaults,
as security for the payment to the City of any claims, fees, liens, maintenance
obligations relating to above- ground facilities, or taxes due the City which
arise by reason of the construction, operation, and maintenance of the
Facilities, and to satisfy any actual or liquidated damages arising out of a
breach. In lieu of a Security Fund, the City may accept a Bond or Letter of
Credit for an equivalent amount in a form and from a financial institution
acceptable to the City.
If the Company fails, after forty -five (45) days written notice, to pay to the City
any fees that are due and unpaid, or fails to repay within such forty -five (45)
days, any damages, costs or expenses which the City is compelled to pay by
reason of any act or default of the Company; or if Company fails to comply
with any provision of this Chapter and the City determines that the failure was
without just cause and, in a manner consistent with the procedures specified
in this Chapter, the Director reasonably determines that the default can be
remedied by a withdrawal from the Security Fund or is nevertheless subject to
liquidated damages, then, in any such event, the Director may immediately
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withdraw the amount thereof from the Security Fund, with interest and any
liquidated damages. Upon such withdrawal, the Director shall notify the
Company of the amount and the date of withdrawal.
iii. Within thirty (30) days after notice to Company that any amount has been
withdrawn by City from the Security Fund, the Company shall deposit a sum
of money sufficient to restore the Security Fund to the original amount.
iv. The rights reserved to the City with respect to the Security Fund are in
addition to all other rights of the City, and no action, proceeding or exercise of
any right with respect to such security fund shall affect any other right the City
may have.
2. Faithful Performance Bond and Labor and Materials Bond. Prior to issuance of any
PROW Permit to construct Facilities in the Public Right of Way, the Director shall require
Company to furnish proof of the posting of a Faithful Performance Bond and /or Labor and
Materials Bond in favor of the City, with corporate surety approved by the Director in the sum
specified in any PROW Permit, and conditioned that the Company shall well and truly observe',
fulfill, and perform each term and condition of any PROW Permit; provided, however; that such
bond(s) shall not be required after certification by Director of the completion of construction. The
corporate surety must be authorized to issue such bonds in the State of California, and the bond
must be obtained and secured through an agent approved by the Director. During the course of
construction, the amount of the bond(s) may from time to time be reduced, as provided in any
PROW Permit. Written evidence of payment of premiums shall be filed with the Director.
Section 5.44.070 Services_
a. Services to be Provided. A Cable System shall provide, as a minimum, the broad
programming categories specified in the Franchise.
b. Changes in Services. Company shall follow Section 5.44.090 when making any changes
in rates, programming services or channel position in the System.
c. Non - discrimination.
A Company shall not discriminate between or among Subscribers within one type or
class in the availability of services, at either standard or differential rates according to
published rate schedules, except as otherwise authorized by law. No charges may
be made for services except as listed in published schedules which are available for
inspection by anyone at Company's office, quoted by Company on the telephone,
and displayed or communicated to all potential Subscribers.
2. The Company shall furnish and maintain Cable Services to each person who makes
a bona fide request to receive any programming service. Nothing in this Chapter shall
limit the right of the Company to deny Cable Service to any household or individual
which has a negative credit or service history with the Company, which may include
non - payment of bills or theft or damage to the Company's equipment, or who has
threatened or assaulted employees of the Company in the course of their
employment.
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d. Prepayment. Company may not charge Subscribers for services more than one (1)
month in advance unless an individual Subscriber requests a longer period. Bills may be due
and payable upon mailing but shall not be delinquent, and no late charge penalties shall be
assessed, except as provided in state law. All bills and billing statements shall clearly indicate
the billing period, and the actual due date.
e. Disconnect for Cause. Company may disconnect a Subscriber only for cause, which
shall include, without limitation, the following:
1. Payment delinquency in excess of forty-five (45) days.
2. Willful or negligent damage to or misappropriation of Company's property.
3. Monitoring, tapping, or tampering with Company's system, signals, or service.
4. Threats of violence to Company's employees or property.
f. Reconnection. Company shall, upon Subscriber's written request, reconnect service that
has been disconnected for payment delinquency when payment has removed the delinquency.
If authorized by applicable law, a published standard charge may be made for reconnection.
Company shall not be required to make more than three (3) reconnections for the same
subscriber if the disconnections involved were caused by payment delinquency within any
previous twenty -four (24) month period. Reconnection for disconnections covered by Section
5.44.070(e)(2), (3), and (4) shall be at Company's sole discretion.
g. Installations.
1. Company shall promptly provide and maintain service as specified in the Franchise
to the residential, commercial, and industrial structures in the Franchise Service
Area, as defined in the Franchise, upon request of the lawful occupant or owner.
2. Where a new Drop is required to provide service, Company shall advise each
Subscriber that the Subscriber has the right to require that installation be done over
any route on the Subscriber's property, and in any manner the Subscriber may elect
which is technically feasible, consistent with the Building Code, and consistent with
proper construction practices. If the Subscriber requests installation other than a
standard installation, then the Subscriber may be required to pay the fee required in
paragraph (h):
3. For purposes of this paragraph, a standard installation shall include installation of
drop cable with fittings up to one hundred and fifty feet (150) feet from the CATV
distribution system measured along the cable from the center line of the street or
utility easement through the house wall or, at the Subscriber's option, through the
floor from a house vent or crawl space directly to the Subscriber's television set with
five feet of cable from the wall or floor entry to the N set. Also included as part of a
standard installation is the grounding cable, fine tuning of the television set in order
to insure the reception of Cable Service, and the provision by the Company of the
appropriate literature and information.
4. After Cable Service has been established by activating trunk or distribution cables for
any area, Company shall provide Cable Service to any person requesting Cable
Service in that area within nine (9) calendar days from the date of request, provided
-14- City of NB 05/03/2004
that the Company is able to secure all access
that potential Subscriber within that nine (9)
conditions.
0
rights necessary to extend service to
day period on reasonable terms and
h. Non - Standard Installations. For each non- standard installation, a Company may charge
the Subscriber for the cost of material and labor in excess of that required for a Standard
Installation. Company shall provide each Subscriber a written estimate of all charges for a non-
standard installation prior to installation and obtain Subscriber's written authorization in advance
for all nonstandard installation charges.
i. Converters/Terminals. At the time a converter or terminal is required for Subscribers to
have access to all services on its System, Company shall make them available to Subscribers
for a fee. Company may require each Subscriber who elects to install a converter or terminal to
furnish a security deposit.
1. Each converter or terminal device shall be and remain the property of the Company.
Company shall be responsible for maintenance and repair of all equipment owned by
Company and may replace it as Company may from time -to -time elect, except that
Subscriber shall be responsible for loss of or damage to any device while in the
Subscriber's possession.
2. Upon termination or cancellation of a Subscriber's service, the Subscriber shall
promptly return Company's property to Company in the same condition as received
excepting reasonable wear and tear.
3. Company may apply the security deposit against any sum due from Subscriber for
loss of or damage to a converter or terminal exceeding reasonable wear and tear. In
the event that no security deposit has been required, the Company may charge the
Subscriber for any damage exceeding reasonable wear and tear.
4. If Company has no claim against the Subscriber's security deposit, Company shall
return it, or the balance, to the Subscriber within thirty (30) days of return of the
converter or terminal.
Section 5.44.080 Design and Construction of System.
The System shall be designed and constructed in accordance with the provisions of
Chapter 13.20 of the Newport Beach Municipal Code and the Franchise. Construction
components and techniques shall be in accordance with Chapter 13.20, the Franchise and all
applicable law.
Section 5.44.090 Operations and Maintenance.
a. Customer Service Standards. The Company shall comply with the following Standards
for Customer Service:
1. Service Area Office. The Company shall maintain an office in the Service Area, or at
another location as is approved by the City in writing. That office must be open
during all usual business hours, but in no case less than forty eight (48) hours per
week, including during at least one weekend day per week.
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2. Customer Service Center.
Company shall have a publicly listed, non- long - distance - charge telephone
number that is in operation to receive Subscriber Complaints and requests on a
24 -hour basis. This telephone number shall be listed prominently on the front
page of Subscribers' billing in bold print.
ii. A Company shall have a telephone service system to receive all construction
and service complaints. This telephone service shall be in operation no less
than 48 hours each week including eight hours at least one weekend day.
iii. A sufficient number of customer service representatives shall be provided so
that callers are not required to wait more than thirty (30) seconds before being
connected to a customer service representative ninety percent (90 %) of the
time, measured quarterly, or to receive busy signals more than three percent
(3 %) of the time, measured quarterly.
iv. The telephone number of the local office shall be listed in the telephone
directory serving the City of Newport Beach.
The telephone service system shall be capable of generating reports relating to
answer times, response times, hold times, and abandoned calls.
vi. Customer service personnel shall identify themselves immediately and when
requested, a Spanish- speaking representative will be available for non - English
speaking subscriber complaints.
vii. Customers shall have the right to speak with a supervisor, and if none is
available, a supervisor shall return the customer's call within one working day..
3. Subscriber Complaint Log. The Company shall maintain information of all
Complaints and their disposition, and a summary thereof shall be submitted to City
on a quarterly basis.
4. Complaint Response Times and Verification. The Company shall respond to
complaints as follows:
Within eight (8) hours after receipt of a request for repairs relating to a Cable
Service Interruption affecting at least ten (10) percent of the Subscribers of the
System;
Within twenty -four (24) hours after receipt of requests for service related to all
other Cable Service Interruptions; and
iii. Within forty- eight (48) hours for all other complaints and requests for repair.
All Cable System related problems shall be resolved within five (5) business days
unless technically infeasible. Verification of Subscriber complaints, including but not
limited to billing complaints, and resolution must occur within forty -eight (48) hours
(provided that the schedule or preferences of the person requesting installation have
not been responsible for the delay); and in any event, resolution must occur within
one (1) week, Those matters requiring additional maintenance, repair, or technical
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0
adjustments that are documentable as necessitating in excess of one (1) week to
reasonably complete, must be finally resolved within thirty (30) days of the initial
complaint. The City Manager's office may require reasonable documentation to be
provided by the Company to substantiate the request for additional time to resolve a
complaint.
5. Identification. All officers, agents, or employees of a Company, including its
contractors or subcontractors, who come into contact with members of the public
shall wear on at all times on their outer clothing a photo - identification card in a form
reasonably acceptable to City. Company shall account for all identification cards at
all times. Every vehicle of Company, or its major subcontractors, shall be clearly
identifiable as working for that Company.
6. Charges for Repairs. No charge shall be made to a Subscriber for service or repairs;
except that Company may charge for service calls not related to its Cable System, or
that are caused by the Subscriber or members of its household, or the Subscriber's
agents or guests.
b. System Performance Audit. The Franchise shall direct the following:
1. City shall require that a System Performance Audit be conducted biannually at
Company's expense by an independent technical consultant selected by City to
verify that the System complies with all technical standards, including but not limited
to signal strength, and other specifications of the Franchise. Upon completion of an
Audit, the Company and City shall meet to review the performance of the Cable
System. The reports required by this Chapter regarding Subscriber complaints, the
records of performance audits and tests, and the opinion survey report shall be
utilized as the basis for review. In addition, any Subscriber may submit complaints
prior to or during the review meetings, either orally or in writing, and these shall also
be considered.
Within thirty (30) days after the conclusion of the System Performance Audit review
meetings, City shall issue findings with respect to the adequacy of System
performance and quality of service. If areas of non- compliance are found, City may
direct Company to correct the non - compliance within a period of time as City
determines is reasonable.
2. Participation by the City and the Company in this process shall not waive any rights
they may possess under applicable federal or state law.
3. In addition to the Performance Audit described above, City may conduct audits of the
same or lesser magnitude, at its sole expense, when and if determined necessary or
appropriate by City.
c. System Technical Data. Company shall provide and maintain system technical data,
including but not limited to signal strength testing information. All technical data
reasonably necessary to demonstrate a Company's compliance with FCC regulations,
this Chapter, and the Franchise shall be available for City's inspection during normal
business hours upon two (2) business days notice. In the event of System failure or
other operating emergency, the technical data will be made available at any time, so long
as the provision of the data does not unreasonably interfere with Company's operations.
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d. System Location Data. The Company shall provide the City with data in a digital or other
format specified by the City which details and documents all the geographic locations of
Facilities located in PROW. The computer disk or other record shall be updated
whenever there have been significant changes in the location of the Facilities or at the
Director's discretion. In addition, the Company shall maintain in its local office a
complete, fully- dimensioned, and up -to -date set of as -built system maps and drawings
upon completion of construction. As -built drawings shall show all Facilities. The scale of
maps and drawings shall be sufficient to show the required details in easily readable
form and size.
e. Emergency Repair Capability. It shall be Company's responsibility to assure that its
personnel, qualified to make repairs, are available at all reasonable times and that they
are supplied with keys, equipment location instructions, and technical information
necessary to begin repairs upon notification of the need to maintain or restore
continuous service to the System.
f. Refund. When a Subscriber voluntarily discontinues service, Company shall refund,
within thirty (30) days of the discontinuance of service, the unused portion of any
advance payments or deposits after deducting any charges currently due through the
date of discontinuance. Unused payment portions shall be the percentage of time for
which Subscriber has paid for service yet will not receive the service because of the
Subscriber's discontinuation of service.
f. Disabled Access.
1. The Company shall provide maximum practicable availability of the Services and
facilities of the System to disabled persons. At a minimum, the Company shall
provide a single remote control device for each television set connected to the
Service to those Subscribers who are paraplegic or quadriplegic.
2. Upon initiation of Service in the City, the Company shall submit to the City a plan
and/or report describing the equipment, facilities, and ongoing services the Company
intends to or does make available to disabled persons. Information regarding the
facilities, equipment, and ongoing services for disabled persons shall be kept
updated and the Company shall promptly submit to the City notification of any
deletions or additions to the information.
3. The Company shall provide within forty -five (45) days of a request from a Subscriber,
for rental or purchase, equipment' which facilitates the reception of all cable channels
by hearing - impaired Subscribers in accordance with the FCC's regulations regarding
Closed Captioning. The Company shall also provide TDD (or equivalent) equipment
at the Company office that will allow the Subscribers to contact the Company for any
reason related to the System.
g. Installations.
1. All installations will include appropriate grounding, adjustment of the television set in
order to receive Service, and the provision of required Subscriber information and
literature to instruct the Subscriber in the utilization of the Services.
-18- City of NB 05103(2004
2. The Company shall offer Subscribers the option to receive an A/B switch at the time
of initial Service installation for no additional installation cost, and shall provide
Subscribers with written information on how to use an A/B switch.
3. Upon Subscriber request, the Company shall provide an A/B switch after the initial
installation of Service. If the Subscriber requests installation of the A/B switch, the
Company may charge reasonable fees for the installation which fee shall not exceed
the maximum rate permitted by applicable law.
4. When applicable, if the Company cannot perform standard installations within nine
(9) calendar days of request by a Subscriber (provided that the schedule or
preferences of the person requesting installation have not been responsible for the
delay), the Subscriber may request and is entitled to receive a $20.00 credit.
Repeated failure to perform standard installations within the nine (9) calendar days or
to provide the credit for late installations shall be grounds for Franchise revocation or
other enforcement actions.
h. Service Interruptions and Other Service Problems.
The Company shall render efficient service, make repairs promptly, and interrupt
Service only if unavoidably necessary and for the shortest period possible. The
interruptions, insofar as possible, shall be preceded by reasonable notice to each
affected person and shall occur during periods of minimum System use.
2. The Company shall promptly notify the City of any significant "Service Interruption" in
the operation of the System. For the purposes of this Section, a "significant Service
Interruption in the operation of the System" shall mean any interruption of Cable
Services of at least four (4) continuous hours to at least ten percent (10 %) of the
Subscribers in the area or areas of the Company served by the Company.
3. The Company shall exercise its best efforts to limit any Service Interruption for the
purpose of maintaining, repairing, or reconstruction of the System to periods of
minimum use. Except in an emergency or other situation necessitating a more
expedited or alternative notification procedure, the Company may schedule a Service
Interruption for a period of more than four (4) hours during any twenty -four (24) hour
period only after the Company and each affected Subscriber in the Company have
been given twenty -four (24) hours prior notice of the proposed interruption.
4. Technicians employed by the Company and capable of performing Service - related
emergency repairs and maintenance must be available twenty -four (24) hours a day,
every day, including weekends and holidays.
5. Excluding conditions beyond the control of the Company, the Company will begin
working on Service Interruptions promptly and in no event later than twenty -four (24)
hours after the interruption becomes known (including weekends and holidays).
"Working on" constitutes taking positive steps toward rectifying the problem and not
merely acknowledging the problem.
6. Automatic Credits. The Franchise shall require that:
Outage of All Channels. The Company shall provide an automatic credit to all
affected Subscribers within the Outage area when there is an Outage of all
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0
channels for a period of twenty -four (24) consecutive hours or more, regardless
of the cause of the Outage. The credit for an Outage shall equal, at a minimum,
the value of one- thirtieth (1/30) of each Subscriber's monthly bill for the first
twenty -four (24) consecutive hour period and prorated for each additional four (4)
hour period or portion thereof that the Outage continues.
ii. Outage of Premium Service. The Company shall provide an automatic credit to
all affected Subscribers when there is an Outage of any Premium Service for a
period of twenty -four (24) consecutive hours or more which affects an entire
franchise area, or other discrete area of the Company served by the Company,
regardless of the cause of the Outage. The credit shall equal, at a minimum, the
value of one - thirtieth (1/30) of each Subscriber's monthly bill for that Premium
Service for the first twenty -four (24) hour consecutive hour period and prorated
for each additional four (4) hour period or portion thereof that the Outage
continues.
iii. Outage of Non - Premium Service. The Company shat I provide a credit to a
Subscriber whenever an Outage or Outages of four or more hours in a twenty -
four (24) hour period has affected any of the non - ..premium channels received by
a Subscriber as part of their Service. The credit shall equal the value of one -
thirtieth (1/30) of each Subscriber's monthly bill for Outages of four (4) hours or
greater duration occurring in a twenty -four (24) hour period. In the event that a
premium channel is affected by the Outage, the credit shall equal the value of
one - thirtieth (1/30) the Subscriber's monthly premium rate for each Outage of
four (4) hours or greater duration occurring in a twenty -four (24) hour period. The
Company need not provide a credit under this paragraph (iii) if the Company has
provided a credit under paragraph (i) or (ii) to the same subscribers for the same
Outage.
7. Repeated failure to provide the proper credit for Outages shall be grounds for
Franchise revocation or other enforcement actions.
i. Service Appointments. The Franchise shall require the Company to comply with the
following:
1. The "appointment window" alternatives for installations, service calls for Cable
Service, and other installation activities will be either a specific time or, at maximum,
a four -hour time block during normal business hours. The Company may schedule
services calls for Cable Service and other installation activities outside or normal
business hours for the convenience of the Subscriber.
2. If the Company does not arrive for appointments for installations or service calls
within a designated 4 -hour time frame agreed to by the Subscriber, the Subscriber
may request and is entitled to receive a $20.00 credit. If the Company fails to
provide a credit, and the request was made by the Subscriber within 60 days of the
missed appointment, the City may direct the Company to issue the credit. Repeated
failure to provide the credit shall be grounds for Franchise revocation.
3. The Company may not cancel an appointment with a Subscriber after the close of
business on the business day prior to the scheduled appointment.
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4. If the Company's representative is running late for an appointment with a Subscriber
and will not be able to keep the appointment as scheduled, the Company will
document a diligent effort to contact the Subscriber directly. If, however, the
Subscriber is unavailable at the time the contact attempt is made, the Company will
attempt a second documented contact at least one more time during the previously
agreed upon appointment window. The appointment will be rescheduled, as
necessary, at a time which is convenient to the Subscriber. Contacting the
Subscriber will not necessarily excuse a missed appointment. In the event that it is
necessary for Company to contact the Subscriber regarding the scheduled
appointment and Subscriber is not available, Company will use its best efforts to
provide the Subscriber with a phone number to contact Company.
j. Annual Notice. At least once a year, the Company shall communicate in writing with all
Subscribers. At a minimum, this communication shall comply with Federal regulations
and shall contain statements or provisions addressing each of the following issues:
Complaint Handling. Any complaints or inquiries not satisfactorily handled by the
Company may be referred to the Company Manager, whose phone number shall be
shown on the communication.
2. Schedule. A complete schedule of all current programming services, excluding pay -
per -view, rates and charges and promotional offers.
3. Subscriber Bill of Rights. The Company shall provide Subscribers with the
Subscriber Bill of Rights ( "SBR "). The SBR may be in a form commonly distributed
by a Company throughout its service area, provided that the SBR describes, in
understandable language:
i. The Subscriber's rights and obligations that are generally provided under the
Franchise and federal law, including a description of how to contact the Company
and, if necessary, the City, in the event of an unresolved Subscriber complaint;
ii. The Subscriber's rights to credits or free service when any of the conditions
described within Section 5.44.090 (h)(6) apply.
k. Notices of Rate. Pricing, or Services Changes.
Notice of any pricing changes or additional charges and /or any changes in
programming services must be made as soon as possible. In no instance shall a
company increase rates or change a programming schedule without at least thirty
(30) days advance notice of the changes.
2. Notices of changes in rates shall indicate the new rate inclusive of all fees and /or
other fees and the amount the rate has increased or decreased from the current rate.
Specific words such as "increase" or "decrease" must be used to describe the
changes (as opposed to less specific terms, such as "adjustment ").
3. Notices of changes of programming services and /or channel locations shall include a
description of the new programming service, the specific Channel Location, and the
hours of operation of that programming service. In addition, should the Channel
Location, hours of operation, or existence of other programming services be affected
-21- City of NB 05/03/2004
by the introduction of a new service, this information must also be included in the
notice.
4. In order that Subscribers are fully apprised of the charges they may incur, the
Company shall advertise rates that include all costs and fees.
I. Other Notices.
1. Free Programminq. If Company offers any channels with programming rated NC -17,
R, X, or the equivalents thereof full or part-time without charge, Company shall
include the rating(s) of the programming to be made available for viewing and the
right of the Subscriber to have the Company block the programming. The Company
shall provide, by sale or lease, a device for blocking this programming
2. Notices about the Franchise Fee. Whenever a Company describes to Subscribers in
writing the City's collection or administration of the Franchise Fee, it shall do so in a
manner and form acceptable to the City.
3. Notices to New Subscribers. Before providing Cable Service to any Subscriber,
Company shall provide the Subscriber Bill of Rights to Subscriber and shall include a
written notice to the Subscriber containing substantially the following information:
"Subscriber understands that (insert Name of Company) uses public
rights -of -way and other facilities of the City of Newport Beach in providing
service and that this continued use cannot be guaranteed. Subscriber
agrees not to make any claims against the City of Newport Beach or its
officers or employees in the event that the use is denied for any reason,
and (insert Name of Company) is unable, in its discretion, to provide
service over alternate routes."
m. Disconnections /Denial of Service.
The Company shall not terminate residential Service for nonpayment of a delinquent
account unless the Company furnishes a notice of the delinquency and impending
termination at least fifteen (15) days prior to the proposed termination. The notice
shall be mailed, postage prepaid, to the Subscriber to whom the Service is billed.
This notice shall not be mailed until the sixteenth (16`h) day after the date the bill for
Services was mailed to the Subscriber. The notice of delinquency and impending
termination may be part of a billing statement.
2. Notice of Termination. Every notice of termination of Service shall include all of the
following information:
The name and address of the Subscriber whose account is delinquent;
The amount of the delinquency;
iii.. The date by which payment is required in order to avoid termination of Service;
iv. The telephone number of a representative of the Company who can provide
additional information and handle complaints or initiate an investigation
concerning the Service and charges in question.
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3. The Company shall only terminate Cable Service on days when the Subscriber can
reach a representative of the Company either in person or by telephone. Cable
Service terminated without good cause must be restored without charge for the
Cable 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.
n. Deposits, Refunds and Credits.
The Company may require refundable deposits in circumstances where deposits are
necessary to protect equipment or to ensure payment where there is reasonable
evidence of a risk of nonpayment, provided that the Company shall be required to
pay simple interest at a rate of one -half percent (1/2 %) per month (6 % per year).
Interest shall be accrued and payable upon termination of Service. Upon termination
of Service for any reason, Subscribers will be entitled to receive a refund or credit
against amounts owed the Company equal to the deposit plus accumulated interest.
2. Refund checks will be issued promptly following the resolution of the event giving rise
to the refund; and by the earlier of either:
The Subscriber's next billing cycle; or
ii. Thirty (30) days.
3. If the Company does not mail a check for a refund (including applicable interest) to
any Subscriber disconnecting Service with an outstanding credit within thirty (30)
days of the date Cable Service is ended, and the Subscriber has returned all
Company owned equipment, the Subscriber may request and is entitled to receive a
$4.75 (or such other amount as may be permitted pursuant to State law) payment, in
addition to the total refund (and applicable interest) due. If the Company fails to
provide the $4.75 payment and the request was made by the Subscriber within sixty
(60) days after failure to receive the refund, the City may direct the Company to
provide the $4.75 payment as well as any outstanding refund (and applicable
interest) due. Repeated failure to provide the $4.75 payment shall be grounds for
Franchise revocation and /or other enforcement actions.
4. Credits for Cable Service will be issued no later than the Subscriber's next billing
cycle following the determination that a credit is warranted.
o. Rates, Fees, And Charges.
1. The Company shall not, except to the extent expressly permitted by law, impose any
fee or charge on any Subscriber for:
i. Any service call to a Subscriber's premises to perform any repair or maintenance
work related to Company, installed equipment necessary to receive Service,
except any work which was necessitated by a negligent or wrongful act of the
Subscriber; or
ii. The disconnection of any Services to a Subscriber, provided that the Company
may impose appropriate charges if; at the time of disconnection, some or all of
the Company's equipment is not returned to the Company or the Subscriber has
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not paid all outstanding fees and charges due to the Company; or there is
damage to the equipment of the Company, excluding normal wear and tear and
the circumstances described in the next paragraph.
Where the actions of the Company, its agent(s) or subcontractor(s) can be shown
upon a reasonable demonstration of evidence to have contributed to the theft, loss or
damage of a converter or other equipment lawfully used by a Subscriber, the
Subscriber's liability with respect to the converter or other equipment shall be
reduced to the extent of the contributing actions.
All charges for Services must be applied on a nondiscriminatory basis recognizing
that the Cable Act allows for reasonable discounts to senior citizens and/or the
economically disadvantaged and that a Company may, upon reasonable notice to
Subscribers, conduct promotional campaigns in which rates are discounted or
waived, and may offer bulk rate discounts for multiple dwelling units, hotels, motels,
and similar institutions.
p. Enforcement.
1. Repeated failure to comply with any or all of the provisions delineated above shall be
grounds for Franchise revocation in accordance with the Franchise revocation
procedures and /or other enforcement actions.
2. The City may seek injunctive relief or any other judicial remedy available pursuant to
state or federal law in order to enforce compliance with these standards.
q. Rights Reserved By City.
1. Additional Subscriber Service Standards. The City reserves the right to establish
additional, reasonable Subscriber Cable Service standards from time to time, as may
be necessary, after making a finding of need and after notice to and opportunity to be
heard from the Company has been afforded.
2. Rate Regulation. The City reserves the right to regulate rates for Cable Service to
the fullest extent permitted by law. Notwithstanding anything in these standards to
the contrary, in the event that the Cable Act is amended or repealed, or restrictions
on the authority of the City to regulate rates are otherwise removed or lessened, or
the FCC or any court permits the City to regulate rates, the City may, at its discretion,
establish additional procedures and standards for rates and regulate rates to the
fullest extent of its regulatory authority under federal, State, and local laws.
3. Performance Meetings. Upon request of the City, the Company shall meet with the
City to review the requirements set forth in this Chapter or the Franchise.
4. Cable Review Board. The City reserves the right to create and maintain a Cable
Review Board. Upon request of City, the Company shall send a representative to
Cable Review Board meetings to provide cable related information and to respond to
Subscriber and City inquiries and complaints.
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Section 5.44.100 Violations.
a. Use of Public Streets. Pursuant to Section 1300 of the City Charter, it is unlawful for any
person to construct, install, or maintain in any public place within the City's Territory, or upon
any easement owned or controlled by a public utility, or within any other public property of City,
or within any privately -owned area within City's jurisdiction which is not yet, but is designated as,
a proposed public place on a tentative subdivision map approved by City, any equipment,
Facilities, or System for distributing signals or services through a cable television system,
without a valid Franchise.
b. Unauthorized Connections. It shall be unlawful for any person to make or use any
unauthorized connection to, or to monitor, tap, receive or send any signal or service via a
franchised System, or to enable any Person to receive or use any service, television or radio
signal, picture, program, or sound, or any other signal without payment to the owner of the
System.
c. Tampering with Facilities. It shall be unlawful, without the consent of the owner, to
willfully attach to, tamper with, modify, remove or injure any physical part of or signals on a
franchised System. However, the City or its contractors may remove or modify franchised
System if Company fails to locate or relocate System provided that City has adequately notified
Company via the Underground Service Alert or similar system.
Section 5.44.110 Termination and Related Rights.
a. Material Breach.
In the event that the Company fails to comply with a material provision of any
franchise, then, in accordance with the procedures provided herein, the City may
revoke the franchise granted herein and terminate any franchise in accordance, with
the procedure set forth below.
2. A failure to comply with a material provision of any Franchise shall include, without
limitation, any of the following acts or failures to act by the Company, an Affiliated
Person or the Guarantor of any of the following events, unless excused by the City.
i. Substantial failure to provide required financial information;
ii. Substantial failure to satisfy the requirements regarding System
characteristics or repeated failure to meet the technical performance
standards, as provided in any franchise;
Substantial or repeated failure to provide any Cable Service to any Person as
required by any franchise;
iv. Substantial failure to maintain the mix, level, and quality of Services within the
broad categories of video programming and other services as set forth in any
franchise;
Abandonment of the System, in whole or in material part, without the prior
written consent of the City;
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vi. Substantial failure to supply the PEG Channels and related facilities and
equipment after the date by which the items must be supplied, as provided in
any franchise;
vii. Substantial failure to comply with interconnection requirements as provided in
any franchise;
viii. Substantial and repeated imposition of any nonstandard Installation and other
charges for Basic Service which are discriminatory;
ix. Substantial and repeated failure to comply with consumer service standards;
X. Substantial failure to comply with the privacy rights of Subscribers as
provided in this Chapter, any franchise, or Section 631 of the Cable Act or
Section 637.5 of the California Penal Code;
A. Substantial failure to make any of the Franchise Fee compensation payments
as provided herein, or any other payments required by this Chapter or any
franchise, or to maintain the bond or other instrument in the amount required
herein;
xii. Substantial failure to comply with any rules, laws, regulations, orders or other
directives of the City issued pursuant to the police powers or pursuant to this
Chapter or any franchise;
xiii. The taking of any material action which requires the approval or consent of
the City Council without having first obtained the approval or consent, as
provided in Section 5.44.030 of this Chapter;
xiv. Substantial failure to furnish and maintain throughout the term of any
franchise the liability and indemnification insurance coverage;
xv. To engage in a course of conduct intentionally designed to practice any fraud
or deceit upon the City, any Subscriber, or any other use of the System;
xvi. Failure to cooperate fully and faithfully with any lawful investigation, audit or
inquiry conducted by a governmental agency;
xvii. Any material written misrepresentation, intentionally made by or on behalf of
the Company in its proposal for the franchise granted pursuant to any
franchise, or in connection with the negotiation or renegotiation of, or any
amendment or other modification to any franchise, to the extent that any
misrepresentation was relied upon by the City;
xviii. The conviction or determination of factual guilt, of the Company, any Affiliated
Person, any director or executive officer of the Company or of an Affiliated
Person, any Person holding Control of or a Controlling Interest in the
Company, or any employee or agent of the Company or of any Affiliated
Person acting under the express direction or with the actual consent of the
Company, its directors or officers, of any criminal offense, including, without
limitation, bribery, fraud or misrepresentation arising out of or in connection
with the award, transfer, application for rate increase, or other regulation of
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i •
any franchise, provided that the right to terminate any franchise in the event
of the convictions shall arise only with respect to any of the foregoing
convictions of the Company itself and, in the event of the conviction of any
other Persons specified in this subsection, if the Company fails to
disassociate itself from, or terminate the employment of, other Persons with
respect to activities in the Franchise Area or any other activities affecting the
System, within thirty (30) days after the time in which appeals from a
conviction may be taken, or within thirty (30) days following the final
determination of all appeals which are in fact taken;
xix. The conviction of any City officer, City employee, or City agent of the offense
of bribery or fraud which arises out of or in connection with any intentional
action by the Company, any Affiliated Person, any director or executive officer
of the Company or of any Affiliated Person, any Person holding Control of or
a Controlling Interest in the Company, or of any employee or agent of the
Company or of any Affiliated Person acting under the express direction or
actual consent of the Company or any of the foregoing, which act was
undertaken for the benefit of the Company;
xx. Any material false entry knowingly made in the books or accounts or records
of the Company, or any substantial false statements knowingly made in any
report or fling to the City or any governmental agency or otherwise by the
Company, any director, officer, or other Person holding a Controlling Interest
in the Company, any Affiliated Person, or any employee or agent of the
Company acting under the express direction or with the actual consent of the
Company;
xxi. Failure to comply with a duly constituted lawful order or ruling of any City
regulatory body having jurisdiction over the Company;
xxii. Substantial failure to comply with the access origination point requirements as
set forth in any franchise; or
xxiii. Substantial failure to comply with the construction requirements set forth in
any franchise.
Notwithstanding the foregoing, if, as a result of a failure or alleged failure to comply
with a material provision of any franchise as delineated in the foregoing subsections,
the Company is unable to comply with any other material provision(s) which
necessarily and directly arise(s) out of the failure or alleged failure as delineated in
the subsections, the inability to comply with the other provision(s) shall not be
deemed to be an independent failure to comply with a material provision of any
franchise.
3. The City Council may exercise its right to revoke and terminate the franchise for a
failure by the Company to comply with a material provision of this Chapter and /or any
franchise in accordance with the following procedures:
The City shall notify the Company, in writing, of an alleged failure to comply
with a material provision of the Franchise. The notice shall specify the
alleged failure with reasonable particularity. The Company shall, within forty -
five (45) days after receipt of the notice, either cure the alleged failure or; in
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the event the failure cannot be reasonably cured within forty -five (45) days,
within a reasonable time, provided the Company commences to cure within
the forty -five (45) days and diligently pursues the cure to completion, or, in a
written response to the City, the Company shall either present facts and
arguments in refutation or excuse of the alleged failure or state that the
alleged failure will be cured and set forth the method and time schedule for
accomplishing the cure.
ii. The City shall investigate: (a) whether a failure to comply with a material
provision has occurred; (b) whether the failure is excusable; and (c) whether
the failure has been cured or will be cured by the Company.
iii. If the City determines that a failure to comply with a material provision has
occurred and that either the failure is not excusable or has not been or will not
be cured by the Company, then the City shall so notify the Company.
iv. At the conclusion of or in the event that the investigation is not concluded, as
provided above, the City shall, within thirty (30) days, provide notice of a
public hearing at which the Company shall have the opportunity to respond to
the claim that a material breach has occurred and to present facts and
arguments in refutation or excuse of an alleged breach, or to demonstrate
that a failure shall be cured as provided in any franchise.
V. All final City determinations with respect to revocation or termination must be
made by the City Council. Notwithstanding any final determination by the City
Council, the Company maintains its rights of appeal, if any, under applicable
law.
4. Circumstances Beyond Control of the Company. The Company shall not be subject
to sanction when its performance is prevented for reasons beyond its control, unless
the occurrences or conditions are intentionally caused or created by the Company, or
by an Affiliated Person at the Company's express direction.
5. Pending Litigation. Except when enjoined by a court of law, litigation pending against
the Company shall not excuse the Company from the performance of its obligations
under this Agreement. The Company may petition the City to be excused from the
performance of its obligation under this Chapter because of pending litigation which
the City may grant or deny in the exercise of its discretion.
b. Termination
The termination of any franchise and the Company's rights therein shall become
effective upon the earliest to occur of the:
i. Revocation of the franchise by action of the City Council;
ii. Abandonment of the System, in whole or material part, by the Company without
the express prior approval of the City; or
iii. Expiration of the term of the franchise, if not renewed or extended. In the event of
any termination, the City shall have all rights as provided in any franchise,
including, without limitation, the right to order the Company to continue to operate
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the System or to then or thereafter remove the System, or to acquire or affect a
transfer of the System. In any event, the Company maintains its rights of appeal,
if any, under applicable law.
2. In the event of any . termination of any franchise, the City Council may direct the
Company to operate the System on behalf of the City pursuant to the provisions of
this Chapter and additional terms and conditions as are equitable and mutually
agreeable to the City and the Company or a third party, fora period of up to twelve
(12) months, in which event the Company or third party, as applicable, shall be
entitled to all revenues generated by the System during a period of continued
operation. in the case of operation of the System by a third party, the Company shall
be entitled to a fair rental for use of the System.
3. Upon the termination of any franchise due to the expiration of the term of the
franchise granted herein, if not renewed or extended, the Company shall be entitled
to cancel the performance bond or letter of credit, after account is taken for all offsets
necessary to compensate the City for any uncured failure to comply with any
provision of any franchise as herein provided. If the Company continues to operate
the System following the termination of any franchise, the Company shall not be
entitled to cancel a bond or letter of credit until the end of continued operation. In the
event of a termination of any franchise for cause due to a material breach by the
Company or otherwise, the bond or letter of credit shall become the property of the
City to the extent necessary to cover any costs, loss, or damage incurred by the City
as a result of the termination or material breach, provided that any amounts in excess
of the costs, loss or damage shall be refunded to the Company or surety, as
applicable..
4. In the event of any termination, the City may purchase the Cable System in
accordance with the procedures of this section. In this event, the price to be paid for
the Cable. System to Company shall be the price the Cable Act requires.
5. Upon any acquisition or transfer, and, if applicable, receipt of payment by the
Company from the City, the Company shall:
i. Cooperate with the City in maintaining the distribution of all Services over the
System during acquisition or transfer of ownership;
ii. Promptly execute all appropriate documents to transfer to the City or third party,
free of any and all encumbrances, title to the System, as well as all contracts,
leases, licenses, and rights necessary to maintain the System and the distribution
of Services over the System; and
iii. Promptly supply the City with all necessary records to operate. the System,
including, without limitation, all Subscriber records and plant equipment layout
documents.
6. Upon any termination of any franchise, if so directed by the City, the Company shall,
at its own cost and expense, promptly remove that part of the System located in the
right -of -way and shall replace or repair and restore to serviceable condition each
affected Facility therein, in the manner as set forth in this Chapter and Chapter 1.3.20
of the Newport Beach Municipal Code.
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7. In the event of any acquisition of the System by the City pursuant to this Chapter, and
subject to the requirements of applicable law the City:
Shall not be required to assume any of the obligations of any collective
bargaining agreements or any other employment contract held by the Company
or any other obligations of the Company to any of its officers, employees, or
agents, including; without limitation, any pension or other retirement, or any
insurance obligations; and
ii. May lease, sell, operate, or otherwise dispose of all or any part of the System in
any manner, provided that the Company may seek the award of any franchise to
construct, operate, or maintain the System in connection with any sale.
Section 5.44.120 Franchise Applications.
Applicants for an initial franchise shall submit to the City, or to its designated
representative, written application in a format provided by the City, at the time and place
specified by the City for accepting applications, and accompanied by the designated application
fee. A nonrefundable application fee, established by resolution of the City, shall accompany the
application for an initial franchise to cover all costs associated with processing the application,
including without limitation, costs of administrative review, financial, legal and technical
evaluation of the applicant, the costs of consultants (including technical and legal experts),
notice and publication requirements, and document preparation expenses. In the event that
costs exceed the application fee, the applicant shall pay the difference to the City within twenty
(20) days following receipt of an itemized statement of the costs. This provision is procedural
and shall not constitute the grant of any right to a Company to renewal or otherwise. This
provision does not apply to any renewal of an existing franchise.
Section 5.44.130 Records; Reports; Right to Inspect and Audit; Experts.
a. Company to Provide Records. All reports and records required under this Section shall
be furnished at the sole expense of the Company.
b. Reports of Financial and Operating Activity. No later than ninety (90) days after the
close of a Company's fiscal year, the Company shall submit an audited written report to the City
which shall include:
A Financial Report, audited and certified by a financial officer of Company, for all Cable
System activity in the City during the previous fiscal year, including Gross Annual
Receipts from all sources and gross subscriber revenues from each service. The Report
must set out separately all gross receipts from all sources in the City and gross
subscriber revenues from each Cable Service in the City, and all payments, deductions,
and computations of franchise fees.
2. A summary of the previous year's subscriber totals, new services offered and System
construction activity.
3. A current list of Company's officers, directors, and other principals if there has been any
change in the previous year.
4. A list of stockholders or other equity investors holding five percent (5 %) or more of the
voting interests in Company if there has been any change in the previous year.
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c. Performance Tests and Compliance Reports. Upon written request of City, a Company
shall provide a written report of any FCC or other performance tests conducted by the Company.
In addition, the Company shall provide reports of the test and compliance procedures required
by its franchise, or by this Chapter, no later than thirty (30) days after the completion of those
tests and compliance procedures.
d. Additional Reports and Data. The Company shall prepare and furnish to the City in
writing, at the times and in the form prescribed by City, such additional reports or data as City
may require to confirm and verify Company's compliance with the provisions of its franchise and
this Chapter.
e. Examination of Facilities. Upon two (2) business days notice, and during normal
business hours, a Company shall permit examination, by any duly authorized representative of
the City, of all Franchise property and facilities, together with any appurtenant property and
facilities of the Company situated within the Public Rights -of -Way which are related to the Cable
System.
f. Right to Audit.
In addition to any other inspection rights under this Chapter or the Franchise, upon
thirty (30) days prior written notice, the City shall have the right to inspect, examine, or
audit, during normal business hours, all documents pertaining to a Company or any
Affiliated Person which are reasonably necessary to ascertain a Company's
compliance with its Franchise or this Chapter. All documents pertaining to financial
matters which may be the subject of an audit by the City as set forth herein shall be
retained by a Company for a minimum of five (5) years during the term of and
following the termination of a Franchise. Access by the City to any of the documents
covered by this Section shall not be denied by the Company on grounds that the
documents are alleged by the Company to contain proprietary information.
2. The City may require written certification by a Company's directors, officers, or other
employees with respect to all documents referred to in this Section.
3. Any audit conducted by the City pursuant to this Section shall be conducted at City's
expense. City shall prepare a written report containing its findings, a copy of which
shall be mailed to a Company. Company shall reimburse the City for the expense of
this audit if, as the result of the audit, it is determined that there is a shortfall of more
than two percent (2 %) in the amount of franchise fees or other payments which have
been made or will be made by a Company to the City pursuant to the terms of the
Franchise.
Retention of Experts. In the exercise of its rights under this Chapter, the City shall have
the further right to retain technical experts and other consultants on a periodic basis for
the purpose of monitoring, testing, and inspecting any construction, operation,
maintenance or reconstruction of the System, and all parts thereof, or to ensure
compliance with and enforcement of the provisions of this Chapter and the Franchise.
The City shall bear the cost of retaining the experts, provided that, unless prohibited by
applicable law, the Company shall reimburse the City for all expenses related to the
retention of the experts where this Chapter or the Franchise so provide, or under either
of the following circumstances:
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1. The Company has initiated proceedings which would normally require the City to
retain the experts, such as the filing of a request for approval of a transfer or change
in Control, renewal to the extent allowed by law, expansion of the Franchise Service
Area, or the modification or amendment of the Franchise; or
2. The reports of the experts submitted to the City reveal that the Company has failed to
substantially comply with the terms and conditions of this Chapter or of the
Franchise.
If Company is required to reimburse City pursuant to this paragraph (g), City shall send
Company an itemized description of the charges, and Company shall pay the amount
within forty -five (45) days after the receipt of the description.
Section 5.44.135 Indemnity and Liability Insurance.
a. To the maximum extent permitted by applicable law, a Company shall at all times
defend, indemnify, protect, save harmless, and exempt the City, the City Council, its officers,
agents, servants, attorneys and employees, from any and all, penalties, damages or charges
arising out of claims, suits, demands, causes of action, award of damages, imposition of fines
and penalties, whether compensatory or punitive, or expenses arising therefrom, either at law or
in equity, which arise out of, or are caused by, the construction, erection, location, performance,
operation, maintenance, repair, installation, replacement, removal or restoration of Facilities
within the City based upon any act or omission of a Company, its agents or employees,
contractors, subcontractors, independent contractors, or representatives except for that which is
attributable to the sole negligence or willful misconduct of the City, the City Council, its officers,
agents, servants, attorneys and employees. With respect to the penalties, damages or charges
referenced herein, reasonable, attorneys' fees, consultants' fees, and expert witness fees are
included as those costs which shall be recovered by the City.
b. Except as provided in or as supplemented by any Franchise Agreement, License or
Permit, a Company shall secure and maintain, public liability, property damage insurance, and
umbrella coverage in at least the following amounts:
Public liability: Two (2) million dollars per person /per occurrence;
2. Property Damage: Two (2) million dollars per any one claim;
3. Umbrella liability: Five (5) million dollars.
c. The public and personal liability and property damage insurance policy shall specifically
include the City, the City Council, its employees, and agents as additional insureds.
d. The public and personal liability and property damage insurance policies shall be issued
by an agent or representative of an insurance company licensed to do business in the State and
which has one of the three highest or best ratings from the Alfred M. Best Company.
e. The public liability and property damage insurance policies shall contain an endorsement
obligating the insurance company to furnish the Director with at least thirty (30) days written
notice in advance of the cancellation of the policy.
-.32- City of NB 05/03/2004
i
f. Renewal or replacement policies or certificates shall be delivered to the Director at least
fifteen (15) days before the expiration of the insurance which such policies are to renew or be
replaced.
g. Before a Company commences any construction, the Company shall deliver the policies
or certificates representing the insurance to the Director as required herein.
h. The Director may adjust the coverage amounts specified in paragraph (b) of this Section
provided that the adjustments result in the Company meeting or exceeding the coverage
specified in this Section.
Section 5.44.140 Miscellaneous Provisions.
a. Captions. The section, subsection, paragraph, and subparagraph numbers and letters,
and the captions throughout this Chapter, are intended to facilitate reading and reference. The
numbers, letters, and captions shall not affect the meaning or interpretation of any part of this
Chapter.
b. Franchise References. A Franchise which cites, refers to, or otherwise incorporates this
Chapter, or portions thereof, shall be deemed to be a Franchise issued under and subject to this
Chapter.
c. Filing. When not otherwise specified in this Chapter, all documents required to be filed
with City shall be filed with the City's representative as designated by City.
d. Non - enforcement by the City. A. Company shall not be excused from complying with any
of the requirements of this Chapter, and of its Franchise, and all laws and regulations, or any
subsequently adopted amendments to this Chapter, by any failure of the City on any one or
more occasions to seek, or insist upon, compliance with the requirements or provisions of the
Chapter or Franchise.
e. Continuity of Service. It is the right of all Subscribers to receive Cable Services so long
as their financial and other obligations to a Company are honored. In the event that Company
elects to rebuild, modify, or sell the System, a Company shall use due diligence and reasonable
care to ensure that all Subscribers receive continuous, uninterrupted service. In the event of a
transfer of the System by Company, the current Company shall cooperate with the City or new
Company to operate the System for a temporary period, in order to maintain continuity of service
to all Subscribers. In the event that Company, through its own fault, discontinues system' -wide
service for seventy -two (72) continuous hours, and Company is in material default of its
Franchise, or if the Franchise is revoked by City (but not if City fails to renew the Franchise), City
may, by resolution, when it deems reasonable cause to exist, assume operation of the System
for the purpose of maintaining continuity of service. City's operation of the System may continue
until the circumstances which, in the judgment: of the City, threaten the continuity of service are
resolved to City's satisfaction. City shall be entitled to the revenues for any period during which
it operates the System.
f. Operation by City. During any period when the System is being operated by City
pursuant to paragraph (e) above, City shall, as it may deem necessary, make any changes in
any aspect of operations that, in City's sole judgment, are required for the preservation of quality
of service and service continuity.
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g. Management by City. ,City may, upon assuming operation of a System franchised
hereunder, appoint a manager to act for it in conducting the System's affairs. The manager shall
have the authority as may be delegated by City and shall be solely responsible to City for
management of the System. Company shall reimburse City for all its reasonable costs, in
excess of System revenues, incurred during City's operation if the Franchise is in full force and
effect during the period of City's operation.
h. Notices. All notices and other communications to Company and to City shall be set forth
in the Franchise.
i. Force Maieure: Company's Inability to Perform. In the event Company's performance of
any of the terms, conditions, obligations, or requirements of this Chapter, or any Franchise
granted hereunder, is prevented or impaired due to any cause beyond its reasonable control
and not reasonably foreseeable, the inability to perform shall be deemed to be excused, and no
penalties or sanctions shall be imposed as a result. The causes beyond Company's reasonable
control and not reasonably foreseeable shall include, but not be limited to, any acts of God, civil
emergencies, labor unrest, strikes, utility interruptions, inability to obtain access to an
individual's property on reasonable terms, and any inability of a Company to secure all required
authorizations or permits to utilize necessary poles or conduits, so long as Company uses due
diligence to timely obtain the authorization or permits.
j. Application. All of the provisions of this Chapter shall be applicable to all Cable
Operators, Cable Systems, OVS Operators and OVS Systems to the greatest extent permissible
under applicable law.
k. Severability. If any provision of this Chapter is determined to be void or invalid by any
administrative or judicial tribunal, the provision shall be deemed severable and the invalidation
shall not invalidate the entirety of this Chapter or any other provision.
I. Possessory Interest. By accepting any PROW Permit granted pursuant to this Chapter,
Company acknowledges that notice is and was hereby given to Company pursuant to California
Revenue and Taxation Code Section 107.6 that the use or occupancy of any Public Property
may cause certain taxes to be levied upon such interest. Company shall be solely liable for, and
shall pay and discharge prior to delinquency, any and all possessory interest taxes or other
taxes levied against its right to possession, occupancy or use of any PROW or Public Property
pursuant to any right of possession, occupancy or use created by any PROW Permit.
Section 3: That if any section, subsection, sentence, clause or phrase of this Ordinance is
for any reason held to be invalid or unconstitutional, such decision shall not affect the validity or
constitutionality of the remaining portions of this Ordinance. The City Council hereby declares that
it would have passed this Ordinance and each section, subsection, clause or phrase hereof,
irrespective. of the fact that any one to more sections, subsections, sentences, clauses and phrases
be declared unconstitutional.
Section 4: The Mayor shall sign and the City Clerk shall attest to the passage of this
Ordinance. The City Clerk shall cause the same to be published once in the official newspaper
within fifteen (15) days after its adoption.
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i
Section 5. The City Clerk is directed to certify to the passage and adoption of this
Chapter and to cause it to be published or posted as required by law.
PASSED, APPROVED and ADOPTED this 251h day of May, 2004.
TOD W. RIDGEWAY, Mayor
ATTEST:
LaVONNE HARKLESS, City Clerk
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss.
CITY OF NEWPORT BEACH
1, , City Clerk of the City of Newport Beach, do hereby certify that the
foregoing Ordinance No. 2004 -_ was introduced at a regular meeting of the City Council of
the City of Newport Beach held on the 11`h day of May, 2004, and was thereafter duly and
regularly passed and adopted by the Council of the City of Newport Beach at its regular meeting
held on the 25`h day of May, 2004, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
This Ordinance has been published or posted pursuant to law. Witness my hand and
official seal of the City of Newport Beach this 25`h day of May, 2004.
LaVONNE HARKLESS, City Clerk
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l
J
• • 4f 3
ORDINANCE NO. 2004 -8
AN ORDINANCE OF THE CITY OF NEWPORT BEACH RELATING TO
FRANCHISES FOR CABLE COMMUNICATIONS SYSTEMS.
THE CITY COUNCIL OF NEWPORT BEACH DOES ORDAIN AS FOLLOWS:
Section 1. Chapter 5.44 of the Newport Beach Municipal Code entitled "Community
Antenna Television" is hereby repealed.
Section 2. Chapter 5.44 of the Newport Beach Municipal Code entitled "Cable
Communications Franchises" is hereby added and shall read as follows:
Sections:
Section 5.44.010
Section 5.44.020
Section 5.44.030
Section 5.44.040
Section 5.44.050
Section 5.44.060
Section 5.44.070
Section 5.44.080
Section 5.44,090
Section 5.44. 100
Section 5.44.110
Section 5.44.120
Section 5.44.130
Section 5.44.135
Section 5.44.140
Section 5.44.010
Chapter 5.44
CABLE COMMUNICATIONS FRANCHISES
Title.
Definitions.
Grant of Franchise.
Rights Reserved to the City.
Rights of Subscribers.
Finance.
Services.
Design and Construction.
Operations And Maintenance.
Violations.
Termination and Related Rights.
Franchise Applications.
Records; Reports; Right to Inspect and Audit; Experts.
Indemnity and Liability Insurance
Miscellaneous Provisions.
Title.
This Chapter is known and may be cited as the "Cable Communications Franchises
Chapter."
Section 5.44.020 Definitions.
a. For the purposes of this Chapter, the following words, terms, phrases, and their
derivations have the meanings given herein. Terms defined in the Cable Act shall have the
same meanings herein unless expressly defined otherwise. When not inconsistent with the
context, words used in the present, tense include the future tense, and words in the singular
number include the plural number.
"Affiliated Person" or "Affiliates" means each Person who falls into one or more of the
following categories: (i) each Person having, directly or indirectly, a Controlling Interest in
0 •
Company; (ii) each Person in which Company has, directly or indirectly, a Controlling Interest;
(iii) each officer, director, general partner, limited partner holding an interest of five percent (5 %)
or more in a joint venture, or joint venture partner in Company's Cable System in the City; and
(iv) each Person, directly or indirectly, controlling, controlled by, or under common Control with
Company; provided that "Affiliated Person" excludes the City, any limited partner holding an
interest of less than five percent (5 %) in a Company, or any creditor of Company, solely by
virtue of its status as a creditor, and which is not otherwise an Affiliated Person by reason of
owning a Controlling Interest in, being owned by, or being under common ownership, common
management, or common Control with Company.
"Basic Service" or "Basic Cable Service" or "Basic Service Tier" means the lowest
Service Tier which includes the retransmission of local television Broadcast Signals and Public,
Educational, and Governmental Access Channels.
"Broadcast Signal" means a signal transmitted over the air to a geographically dispersed
public audience and received by a Cable System.
1984 Cable Act" means the Cable Communications Policy Act of 1984.
1992 Cable Act" means the Cable Television Subscriber Protection and Competition Act
of 1992.
"Cable Act" means the Cable Communications Policy Act of 1984, as amended by the
Cable Television Subscriber Protection and Competition Act of 1992 and by the
Telecommunications Act of 1996.
"Cable Operator" means any Person or group of Persons (i) who provides Cable Service
over a Cable System in the City and, directly or through one or more Affiliates, owns a significant
interest in that Cable System; or (ii) who otherwise controls or is responsible for, through any
arrangement, the management and operation of a Cable System in the City.
"Cable Review Board" shall mean an entity formed by resolution of the City that reviews
and hears issues relating to Cable Service, a Cable Franchise, or a Company's operations and
maintenance of Cable Services.
"Cable Service" or "Service" means (i) the one -way transmission to Subscribers of video
programming or other programming service; and (ii) subscriber interaction which is required for
the selection of or use of video programming or other programming service.
"Cable System" or "Cable Communications System" or "System" means a facility,
consisting of a set of closed transmission paths and associated signal generation reception, and
control equipment that is designed to provide Cable Service, which includes video programming,
and which is provided to multiple Subscribers within the City; but this term does not include: (i) a
facility that serves only to retransmit the television signals of one or more television broadcast
stations; (ii) a facility that serves Subscribers without using any public right -of -way; (iii) a facility
of a common carrier which is subject, in whole or in part, to the provisions of Title II of the
Communications Act of 1934 (47 U.S,C. § 201 et seq.), except that the facility shall be
considered a Cable System (other than for purposes of section 621(c) of the Cable Act) to the
extent the facility is used in the transmission of video programming directly to Subscribers,
unless the extent of the use is solely to provide interactive on- demand services; (iv) an open
video system that complies with section 653 of the Cable. Act; or (v) any facilities of any electric
utility used solely for operating its electric utility systems.
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"Channel" means a portion of the electromagnetic frequency spectrum which is used in a
cable system and which is capable of delivering a television channel (as television channel is
defined by the FCC by regulation).
"City" means the City of Newport Beach, California, acting by and through its City
Council, or a representative as the governing body may designate to act on cable matters on its
behalf.
"Company" means the Person granted a Franchise to install, operate, maintain, or
reconstructs Cable System and the lawful successors, transferees, or assignees of that Person.
"Company Manager" means an employee of the Company who is designed by the
Company in writing to the City to be the contact person for Company in accordance with the
provisions of this Chapter.
"Complaint' means a dispute in which a Subscriber notifies Company of an outage or
degradation in picture quality, billing or other issue pertaining to the Subscriber's Cable Service
which is not corrected during the initial telephone or service call.
"Control" or "Controlling Interest" means actual working control in whatever manner
exercised, including, without limitation, working control through ownership, management, debt
instruments, or negative control, as the case may be, of the Cable System or a Company. A
rebuttable presumption of the existence of Control or a Controlling Interest shall arise from the
beneficial ownership, directly or indirectly, by any Person or group of Persons acting in concert
(other than underwriters during the period in which they are offering securities to the public) of
twenty -five percent (25 %) or more of any Person (which Person or group of Persons is referred
to as "Controlling Person "), or being a party to a management contract to manage the system, or
any material portion thereof, in lieu of the Company.
"Converter" or "Terminal" means a device located at a Subscriber's premises that,
converts signals from one frequency to another or otherwise processes signals for use by
Subscribers.
"Director" means the Director of the City's Department of Public Works or his or her
designee.
"Drop" means the cable connecting the Cable System's plant to equipment at the
Subscriber's premises.
"Facilities" or "Facility shall have the same meaning in this Chapter as these terms have
in Chapter 13.20 of the Newport Beach Municipal Code.
"FCC" means the Federal Communications Commission or its designated
representatives.
"Franchise" means a written legal undertaking or action of the City which authorizes a
specific Person to use the City's streets and public ways for the purpose of installing, operating,
maintaining, or reconstructing a Cable System to provide Cable Service.
"Gross Annual Revenue" or "Gross Annual Receipts" or "Gross Receipts" means all
revenue, as determined in accordance with Generally Accepted Accounting Principles, which is
received, directly or indirectly, by the Company and by each Affiliated Person from or in
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connection with the distribution of any Cable Service, and any other Service which may, under
now or then applicable federal law, be included in the Cable Act definition for the purpose of
calculating and collecting the maximum allowable franchise fee for operation of the System,
whether or not authorized by any Franchise, including, without limitation, leased or access
channel revenues and programming fees of any kind, received, directly or indirectly, from or in
connection with the distribution of any Cable Service. It is intended that all revenue collected by
the Company, and by each Affiliated Person, from the provision of Cable Service over the
System, whether or not authorized by the Franchise, be included in this definition. Gross Annual
Revenue also specifically includes: (i) the fair market value of any non- monetary (i.e., barter)
transactions between Company and any Person, other than an Affiliated Person, but not less
than the customary prices paid in connection with equivalent transactions; (ii) the fair market
value of any non - monetary (i.e., barter) transaction between Company and any Affiliated
Persons, but not less than the customary prices paid in connection with equivalent transactions
conducted with Persons who are not Affiliated Persons; (iii) any revenues generated from the
provision of Internet services and/or broadband services which utilize the Cable System for
delivery and must not be excluded pursuant to applicable law; and (iv) any revenue received, as
reasonably determined from time to time by the City, through any means which is intended to
have the effect of avoiding the payment of compensation that would otherwise be paid to the
City for the Franchise granted. Gross Annual Revenue also includes any bad debts recovered.
Gross Annual Revenue also includes all (100 %) advertising revenue (without exclusions for any
commissions, fees, or other costs incurred in securing the revenue) which is received directly or
indirectly by the Company, any Affiliated Person, or any other Person from or in connection with
the distribution of any Service over the System or the provision of any Service- related activity in
connection with the System, or allocable thereto based upon subscriber counts. Gross Annual
Revenue does not include: (i) the revenue of any Person to the extent that the revenue is also
included in the Gross Annual Revenue of the Company; (ii) taxes imposed by law on
Subscribers which the Company is obligated to collect; and (iii) amounts which must be
excluded pursuant to applicable law.
"Pay Cable," `Pay Service," "Premium- Service" or "Pay Television" means programming
choices (such as movie channels, pay- per -view, video on demand) offered to Subscribers on a
per - Channel, per - program or per -event basis.
'PEG Channel' means collectively, the channel capacity dedicated to non - commercial
public, education or government access programming.
"Person" means any person, corporation, partnership, proprietorship, individual, or
organization authorized to do business in the State of California.
"Plant" means the transmitting medium and related equipment which transmits signals
between the Headend and Subscribers, including Drops.
"Public Right -of -Way" or "Right of Way" shall have the same meaning in this Chapter as
the term or terms have in Chapter 13.20 of the Newport Beach Municipal Code.
"Residential Dwelling Unit' or "Dwelling Unit" means a home, mobile home,
condominium, apartment, cooperative unit, and any other individual dwelling unit.
"Service Area" or "Franchise Service Area" means the entirety of the City of Newport
Beach, or as further defined in the Franchise.
"Service Interruption" means the loss of picture or sound on one or more cable channels.
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"Service Tier' or "Tier" means a category of Cable Service or other Services provided by
a Cable Operator and for which a separate rate is charged by the Cable Operator, other than per
channel or per event programming or legitimate packages of per channel or per event
programming,
"Subscriber" means any resident, business, or other Person that lawfully subscribes to
and receives, a Cable Service provided by the Company by means of or in connection with its
Cable System.
"Telecommunications Act" means the Telecommunications Act of 1996
"Territory" shall mean land within the City's boundaries at the time of this Chapter's
adoption and, if later annexed or reorganized into the City's boundaries, land added to the City
at the time of annexation or reorganization.
"Unit" means a discrete place where System Services are used, such as a residence,
apartment, office, store, etc.
b. Terms Not Defined. Words, terms, or phrases not defined herein shall first have the
meaning as defined in the Cable Act, and then the special meanings or connotations used in
any industry, business; trade, or profession where they commonly carry special meanings. If
those special meanings are not common, they will have the standard definitions as set forth in
commonly used and accepted dictionaries of the English language.
Section 5.44.030 Grant of Franchise.
a. Authority to Grant Franchises. Pursuant to the Newport Beach City Charter
(commencing with Section 1300), the City may grant a Franchise to provide Cable Service to
any Person who offers to provide a System pursuant to this Chapter.
b. Form. A Franchise may, at City's sole option, take the form of an ordinance, agreement,
license, permit, contract, resolution, or any other form elected by City.
c. Grants Not Required. Consistent with applicable state and federal law, no provision of
this Chapter requires the granting of a .Franchise when, in the opinion of the City, it is in the
public interest not to do so.
d. Franchise Purpose. The purpose of a Franchise is to identify and authorize the
operation of a Cable Communications System by a specific Company, and to identify and
specify those terms, conditions, definitions, itemizations, specifications and other particulars of
the agreement between the City and a Company. In so doing, a Franchise may clarify, extend,
and interpret the provisions of this Chapter. Where a Franchise and this Chapter conflict, both
shall be liberally interpreted to achieve a common meaning or requirement. In the event this is
not possible within reasonable limits, the Franchise shall prevail.
e. Compliance with Law. Neither this Chapter nor a Franchise granted under it relieves a
Company of any requirement of City, or of any ordinance, rule, regulation, or specification of City
now or hereafter in effect pursuant to City's police power, including, but not limited to, the
obtaining of a business license, and the payment of all permit and inspection fees required from
time to time by the City.
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f. Franchise Non- Exclusive. City may, at its option, grant one or more Franchises to
construct, operate, maintain, and reconstruct a System. These Franchises shall constitute both
a privilege and an obligation to provide the System and Cable Services required by this Chapter
and the Franchise.
g. Duration. The term of any Franchise, and all rights, privileges, obligations and
restrictions pertaining thereto, shall be specified in the Franchise. Pursuant to Section 1302 of
the City Charter, in no event shalt the term of any Franchise exceed 25 years. The effective
date of any Franchise shall be as specified in the Franchise.
h. Use of Public Rights -of -Way. Pursuant to Chapter 13.20 of the Newport Beach
Municipal Code and for the purposes of operating and maintaining a System in the franchised
Service Area, a Company may place and maintain within the Public Rights -of -Way the property
and equipment that conforms to the laws and standards of the City and as are necessary and
appurtenant to the operation of the Cable Communications System. Prior to construction or
alteration of the Plant in Public Rights -of -Way, a Company shall comply with Chapter 13.20.
L Use of Other Utilities. Any Person who provides a System or Services as defined herein
shall be deemed a Company and must obtain a Franchise. If a Company uses distribution
channels furnished by any telephone company, other public utility; or any other entity which are
functionally equivalent to those used by a Cable Operator, the Company shall be required to
comply with all of the provisions of this Chapter.
j. Restrictions against Transfers. Unless prohibited by federal law, neither the franchise
nor any rights or obligations of the Company in or pursuant to the franchise, or the System shall
be transferred in part or as a whole, by assignment, trust, mortgage, lease, sublease, pledge or
other hypothecation, and shall not be sold, transferred, leased, assigned, or disposed of in part
or as a whole, either by forced sale, merger, consolidation, or otherwise, nor shall title thereto,
either legal or equitable, or any right or interest therein, pass to or vest in any Person, nor shall a
transfer of Control of the Company or the System occur, either by act of the Company, by
operation of law or otherwise, in each case without the prior written consent of the City, which
consent shall not be unreasonably withheld; and which shall be expressed by Resolution and
then only under conditions as may be therein prescribed.
k. Effect of Unauthorized Action.
1. The taking of any action described in paragraph 0) without the prior consent of the
City shall:
Be deemed a material breach of Franchise; and
ii. Among other remedies available to the City, be subject to a liquidated damages
assessment, which assessment shall be up to $5,000.00 a day until the taking of
an action described in the foregoing paragraph 0) is approved, or if not approved,
until the prior ownership, Control or other status quo ante is restored to a
condition satisfactory to the City. The amount of the assessment shall be
determined by the City.
If the City denies its consent to any action and the action has nevertheless been
effected, the Council may revoke the Franchise unless the ownership of the
Franchise and /or System or Control of the Company, the System or the Franchise is
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promptly restored to its status prior to the unauthorized action or to a status
acceptable to the City.
3. The grant or waiver of any one or more consents shall not render unnecessary any
subsequent consent or consents, nor shall the grant of any consent constitute a
waiver of any other rights of the City.
I. Additional Restrictions.
1. The Company shall not enter into any management contract or other arrangement for
the management of the System, or sell or otherwise transfer the System, or any
material portion thereof, with or without the Franchise, without the prior written
consent of the City.
2. Any use by the Company of its own or an existing MAN, SMATV, MDS, DBS, or
other system in any structure located in the Service Area for the distribution of any
Service which would otherwise be distributed over the System, shall not relieve the
Company of its obligation to construct, operate, and maintain the System in the
structure pursuant to this Chapter and applicable law.
m. Approval Procedure.
The Company shall promptly notify the City of any action or proposed action requiring
consent of the City pursuant to this Section. The Company shall submit to the City
an original and four copies, unless otherwise directed, of its petition on FCC Form
394, requesting consent, which petition shall fully describe the action or proposed
action and clearly state the basis on which the petition should be approved. The
petition shall also contain all reasonably appropriate documentation. The 120 -day
period to review a transfer request under Section 617 of the Cable Act shall not
commence until all of the information required by FCC Form 394, any applicable
State law, the Franchise and this Chapter is submitted to the City, including but not
limited to:
Name and address of the proposed transferee and identification of the
ownership and control of the transferee, including: the names and addresses
of the ten (10) largest holders of an ownership interest in the transferee and its
cable affiliates and all persons with twenty (20 %) percent or more ownership
interest in the transferee and its cable system; the Persons who Control the
transferee; all officers and directors of the transferee and its cable affiliates;
and any other Cable System ownership interest or each named Person;
ii. A demonstration of the transferee's technical ability and legal qualifications to
construct, maintain, upgrade and operate the System, including identification of
key personnel;
iii. The transferee must show that it, as well as any person which Controls the
transferee, has not, at any time during the ten (10) years preceding the
submission of the petition, been convicted of any act or omission of character
that the transferee cannot be relied upon to deal truthfully with the City and the
Subscribers of the System, or to substantially comply with its lawful obligations
under applicable law;
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iv. The transferee must certify that no elected official of the City holds an interest,
other than shares in a publicly traded company, in the transferee or an
Affiliated Person of the transferee;
V. Current financial statements showing the financial condition of the System as
of the date of the petition. If a Company does not maintain financial records at
the System level, then the Company may provide financial statements of the
smallest reporting entity which includes the System;
vi. A statement prepared by a certified public accountant or responsible official of
the transferee regarding the transferee's or assignee's financial ability to
Construct, upgrade, maintain and operate the System,
vii. A description of the transferee's prior experience in Cable System ownership,
construction and operation and identification of communities in which the
transferee or assignee or entities under common Control with the transferee
have a cable franchise or license;
viii. A description of the transferee's plans for meeting any System obligations
under the Franchise, including, but not limited to, any upgrade obligations,
upgrade completion schedules, channel capacity requirements, technical
design requirements, and performance characteristics;
ix. An affidavit or declaration of the transferee or authorized officer certifying the
truth and accuracy of the information in the petition or other written request,
acknowledging the enforceability of the commitments of the petition or other
written request, and certifying that the proposal meets all federal and state taw
requirements; and
X. A summary of the plans and commitments of the transferee, to remedy specific
and known defaults and violations, if any, in the operation of the System under
the Franchise.
2. At any time during the review process, the City reserves the right to require additional
supporting documentation from the Company or any other Person involved in the
action or proposed action. The Company shall.provide all reasonably requested
assistance to the City in connection with any inquiry and, as appropriate; shall use its
best efforts to secure the cooperation and assistance of all other Persons involved in
the action.
n. Conditions. As a condition to the granting of any consent required by this Section, the
City may require that the transferee execute an agreement, in a form and containing reasonable
conditions as may be required by the City, specifying that the transferee assumes and agrees to
be bound by all applicable provisions of the Franchise. The execution of the agreement by the
transferee shall in no way relieve the Company, or any other transferor involved in any the
action, of its obligations pursuant to the Franchise during its tenure as the franchisee up to and
including the date of execution of the Agreement without the consent of the City.
o. Reimbursement of Processing and Review Costs. To the extent not prohibited by
applicable law, a Company shall reimburse the City for the City's reasonable processing and
review expenses in connection with a transfer of the Franchise or a change in Control of the
Franchise, including without limitation, costs of administrative review, financial, legal, and
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technical evaluation of the proposed transferee, costs of consultants (including technical and
legal experts), notice and publication costs, and document preparation expenses. A reasonable
deposit in an amount determined by the City may be required by the City. In addition, prior to
any transfer or change in Control, a Company shall reimburse the City for all of the City's
expenses in connection with evaluating or negotiating a renewal of a Company's franchise,
whether or not the renewal was ever finalized or granted. The City may send a Company an
itemized description of all charges, and that Company shall pay the amount within forty -five (45)
days after the receipt of the description.
Section 5.44.040 Rights Reserved by the City.
a. Reservation. The grant of the Franchise does not limit the rights of City under state law
with respect to its power of eminent domain.
b. Non- waiver or Bar. Neither the granting of any Franchise, nor any provisions of this
Chapter, shall constitute or be construed as a waiver or bar to the exercise of any governmental
right or power by City.
c. Delegation of Powers. Any right or power in, or duty retained by or imposed upon City,
or any commission, officer, employee, department, or board of City, may be delegated by City to
any officer, employee, department or board of City, or to an other person or entity as City may
designate to act on its behalf.
d. Right of Inspection of Construction. Pursuant to Chapter 13.20, the City shall have the
right to inspect and approve all construction, installation, or other physical work performed by
Company in the Public Rights -of -Way and on private property consistent with standards
approved by the City.
e. Right to Require Removal and Repair of Propert y. Pursuant to Chapter 1320 and
consistent with applicable law, upon the lawful revocation, expiration, or termination of the
Franchise, the City shall have the right to require a Company to remove, at Company's expense,
all portions of its System and any other property from all streets and public rights -of -way within
the Franchise Service Area and to require the repair of any public facility, right -of -way, or
property damaged during the removal process within a reasonable period of time.
f. Right of Intervention. The City shall have the right of intervention in any suit, proceeding
or other judicial or administrative proceeding in which the City has any material interest, and to
which a Company is party.
g. Place of Inspection. The City shall have the right to inspect Company's local premises,
and to request copies of all relevant information that is reasonably necessary for the exercise of
City's regulatory authority, upon reasonable notice at any time during normal business hours.
Any Company records kept at another place shall, within twenty (20) days of City's request, be
made available to City for City's inspection and copying. All reports and records required
pursuant to this Chapter shall be furnished at the sole expense of Company, except as
otherwise provided in this Chapter or the Franchise.
h. Printed Messages on Bills. The City shall have the right to limit printed messages on
subscriber bills to information applicable only to Subscribers within the Franchise Area.
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Section 5.44.050
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Rights of Subscribers.
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a. Discriminatory Practices Prohibited'. A Company shall not deny Cable Service or
otherwise discriminate against Subscribers or others on the basis of race, color, religion,
national origin, sex, age, disability, or characteristics of other protected classes.
b. Tapping and Monitoring. A Company shall not tap or monitor, or permit any other person
controlled by Company to tap or monitor, any cable, line, signal input device, or subscriber outlet
or receiver, to collect personally identifiable information (as defined in Section 631 of the Cable
Act) concerning any Subscriber whatsoever without the prior written consent of the Subscriber
or a court order; provided, however, that a Company may monitor customer service calls for
quality control purposes and may conduct system -wide or individually addressed "sweeps" for
the purpose of verifying system integrity, monitoring signal levels, or checking for unauthorized
connections to the Cable System, service levels, or billing- for -pay services.
c. Data Collection.
Except for its own use, or in connection with the provision of Cable Services or for
release of data to the City, the Company shall not permit its system to be used for
data collection purposes, nor shall it otherwise collect data which would reveal the
commercial product or other preferences or opinions of an individual Subscriber,
members of their families, or their guests, licensees or employees, unless the
Company shall have received the prior written consent of Subscriber.
2. The Company shall not disclose or permit the release or sale of data on individual
Subscribers or groups thereof, but may disclose or permit the release or sale of
aggregate data.
d. Disclosure of Subscriber Lists. The Company shall not disclose, or sell, or permit the
disclosure or sale of its subscriber list without the prior written consent of each Subscriber on a
list; provided that Company may use its subscriber list as necessary for the construction,
marketing, and maintenance of the Company's services and facilities authorized by a Franchise,
and the billing of Subscribers for Cable Services; and provided further, that consistent with
applicable law, City may use Company's subscriber list for the purpose of communication with
Subscribers in connection with matters relating to the operation, management, and maintenance
of the Cable System and for the audit of financial and other obligations pursuant to this Chapter,
any franchise, or other applicable law.
e. Disclosure of Subscriber Preferences. Company shall not disclose 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 the prior
written consent of the Subscriber.
f. Terms of Subscriber Consent.
1. Any written consent given in accordance with paragraph (d) shall be limited to a
period of time not to exceed one year, or a term agreed upon by the Company and
the Subscriber.
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2. The Company shall not condition the delivery or receipt of Cable Services to any
Subscriber on any consent.
3. A Subscriber may at any time revoke, without penalty or cost, any consent previously
given by delivering to the Company in writing a statement of the Subscriber's intent to
so revoke.
g. Other Persons Affected. The prohibitions contained in paragraphs (a) through (e),
inclusive, of this Section apply to a Company, as well as to all of the following:
Officers, directors, employees, agents, and general and limited partners of the
Company
Any person or combination of persons owning, holding, or controlling any corporate
stock or other ownership interests in the Company;
3. Any affiliated or subsidiary entity owned or controlled by a Company, 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 Company, shall
own, hold or control any corporate stock or other ownership interests; and
4. Any person, firm, or corporation acting or serving in the capacity of a holding or
controlling company of the Company.
Section 5.44.060 Finance.
a. Payments to Citv.
1. As compensation for any Franchise to be granted, and inconsideration of permission
to use the City's streets and public rights -of -way for the construction, operation,
maintenance, and reconstruction of a System, a Company shall pay to the City the
amounts and in the manner specified herein and in the Franchise.
Payments due. the City shall be computed quarterly, and shall be paid within
forty -five (45) days after the close of each calendar quarter. The payment shall
be accompanied by a report showing the basis for the computation and such
other relevant facts as may be required by the City to determine the accuracy of
the payment. A final annual reconciliation, and payment if any, shall be
delivered to City by Company within ninety (90) days after the end of each
calendar year.
ii. If any franchise payment or recomputed amount is not made on or before the
dates specified above in subsection (i), Company shall pay as additional
compensation the greater of the following:
A. An interest charge, computed from the applicable due date, at an
annual rate equal to the prevailing commercial prime interest rate in
effect upon the due date, plus one percent (1 %).
B. A sum of money equal to $5,000 for each month, or part thereof, of
delay, which sum shall also bear interest from the due date at an
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annual rate equal to the prevailing commercial prime interest rate in
effect upon the due date, plus one percent (1 %).
iii. In addition to any late payment made pursuant to subsection 3 above, if a
payment is late by sixty (60) days or more, Company shall pay a sum of money
equal to five percent (5 %) of the amount due in order to defray additional
expenses and costs incurred by City as a result of such delinquent payment.
iv. No acceptance of any payment shall be construed as a release of, or an
accord, or satisfaction of, any claim that the City might have for further or
additional sums payable under the terms of this Chapter, or for any other
performance by Company of an obligation hereunder.
2. Payments of compensation made by a Company to the City pursuant to the
provisions of this Chapter are in addition to, and exclusive of, any and all authorized
taxes, business license fees, and other fees, levies, or assessments now in effect or
subsequently adopted in accordance with state and federal law.
b. Financial Security The Franchise shall require that the Company provide Financial
Security pursuant to this section. The City shall determine the appropriate level of Financial
Security, which may include all of the following protections for the City against Company default
or failure to comply with this Chapter or the Franchise. The Director shall determine the
appropriate level of Financial Security to adequately repair Public Facilities or Public Rights-of-
Way. This Security shall include;
1. Security Fund.
The City shall require the Company to deposit into a bank account established
by the City, and to maintain on deposit through the duration of the Franchise
Term, security ( "Security Fund ") for the faithful performance by Company of
all of the provisions of the Company's Construction Plan, compliance with this
Chapter, with all orders, permits and directions of the City, or any designated
representative of the City having jurisdiction over Company's acts or defaults,
as security for the payment to the City of any claims, fees, liens, maintenance
obligations relating to above - ground facilities, or taxes due the City which
arise by reason of the construction, operation, and maintenance of the
Facilities, and to satisfy any actual or liquidated damages arising out of a
breach. In lieu of a Security Fund, the City may accept a Bond or Letter of
Credit for an equivalent amount in a form and from a financial institution
acceptable to the City.
If the Company fails, after forty -five (45) days written notice, to pay to the City
any fees that are due and unpaid, or fails to repay within such forty - five (45)
days, any damages, costs or expenses which the City is compelled to pay by
reason of any act or default of the Company; or if Company fails to comply
with any provision of this Chapter and the City determines that the failure was
without just cause and, in a manner consistent with the procedures specified
in this Chapter, the Director reasonably determines that the default can be
remedied by a withdrawal from the Security Fund or is nevertheless subject to
liquidated damages, then, in any such event, the Director may immediately
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withdraw the amount thereof from the Security Fund, with interest and any
liquidated damages. Upon such withdrawal, the Director shall notify the
Company of the amount and the date of withdrawal.
iii. Within thirty (30) days after notice to Company that any amount has been
withdrawn by City from the Security Fund, the Company shall deposit a sum
of money sufficient to restore the Security Fund to the original amount.
iv. The rights reserved to the City with respect to the Security Fund are in
addition to all other rights of the City, and no action, proceeding or exercise of
any right with respect to such security fund shall affect any other right the City
may have.
2. Faithful Performance. Bond and Labor and Materials Bond. Prior to issuance of any
PROW Permit to construct Facilities in the Public Right of Way, the Director shall require
Company to furnish proof of the posting of a Faithful Performance Bond and/or Labor and
Materials Bond in favor of the City, with corporate surety approved by the Director in the sum
specified in any PROW Permit, and conditioned that the Company shall well and truly observe,
fulfill, and perform each term and condition of any PROW Permit; provided, however, that such
bond(s) shall not be required after certification by Director of the completion of construction. The
corporate surety must be authorized to issue such bonds in the State of California, and the bond
must be obtained and secured through an agent approved by the Director. During the course of
construction, the amount of the bond(s) may from time to time be reduced, as provided in any
PROW Permit. Written evidence of payment of premiums shall be filed with the Director.
Section 5.44.070 Services.
a. Services to be Provided. A Cable System shall provide, as a minimum, the broad
programming categories specified in the Franchise.
b. Changes in Services. Company shall follow Section 5.44.090 when making any changes
in rates, programming services or channel position in the System.
c. Non - discrimination.
A Company shall not discriminate between or among Subscribers within one type or
class in the availability of services, at either standard or differential rates according to
published rate schedules, except as otherwise authorized by law. No charges may
be made for services except as listed in published schedules which are available for
inspection by anyone at Company's office, quoted by Company on the telephone,
and displayed or communicated to all potential Subscribers.
2. The Company shall furnish and maintain Cable Services to each person who makes
a bona fide request to receive any programming service. Nothing in this Chapter shall
limit the right of the Company to deny Cable Service to any household or individual
which has a negative credit or service history with the Company, which may include
non- payment of bills or theft or damage to the Company's equipment, or who has
threatened or assaulted employees of the Company in the course of their
employment.
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d. Prepayment. Company may not charge Subscribers for services more than one ('1)
month in advance unless an individual Subscriber requests a longer period. Bills may be due
and payable upon mailing but shall not be delinquent, and no late charge penalties shall be
assessed, except as provided in state law. All bills and billing statements shall clearly indicate
the billing period, and the actual due date.
e. Disconnect for Cause. Company may disconnect a Subscriber only for cause, which
shall include, without limitation, the following:
1. Payment delinquency in excess of forty -five (45) days.
2. Willful or negligent damage to or misappropriation of Company's property.
3. Monitoring, tapping, or tampering with Company's system, signals, or service.
4. Threats of violence to Company's employees or property.
f. Reconnection. Company shall, upon Subscriber's written request, reconnect service that
has been disconnected for payment delinquency when payment has removed the delinquency.
If authorized by applicable law, a published standard charge may be made for reconnection.
Company shall not be required to make more than three (3) reconnections for the same
subscriber if the disconnections involved were caused by payment delinquency within any
previous twenty -four (24) month period. Reconnection for disconnections covered by Section
5.44.070(e)(2), (3), and (4) shall be at Company's sole discretion.
g. Installations.
1. Company shall promptly provide and maintain service as specified in the Franchise
to the residential, commercial, and industrial structures in the Franchise Service
Area, as defined in the Franchise, upon request of the lawful occupant or owner.
2. Where a new Drop is required to provide service, Company shall advise each
Subscriber that the Subscriber has the right to require that installation be done over
any route on the Subscriber's property, and in any manner the Subscriber may elect
which is technically feasible, consistent with the Building Code, and consistent with
proper construction practices. If the Subscriber requests installation other than a
standard installation, then the Subscriber may be required to pay the fee required in
paragraph (h).
For purposes of this paragraph, a standard installation shall include installation of
drop cable with fittings up to one hundred and fifty feet (150) feet from the CATV
distribution system measured along the cable from the center line of the street or
utility easement through the house wall or, at the Subscriber's option, through the
floor from a house vent or crawl space directly to the Subscriber's television set, with
five feet of cable from the wall or floor entry to the TV set. Also included as part of a
standard installation is the grounding cable, fine tuning of the television set in order
to insure the reception of Cable Service, and the provision by the Company of the
appropriate literature and information.
4. After Cable Service has been established by activating trunk or distribution cables for
any area, Company shall provide Cable Service to any person requesting Cable
Service in that area within nine (9) calendar days from the date of request, provided
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that the Company is able to secure all access rights necessary to extend service to
that potential Subscriber within that nine (9) day period on reasonable terms and
conditions.
h. Non- Standard Installations. For each non - standard installation, a Company may charge
the Subscriber for the cost of material and labor in excess of that required for a Standard
Installation. Company shall provide each Subscriber a written estimate of all charges for a non -
standard installation prior to installation and obtain Subscriber's written authorization in advance
for all nonstandard installation charges.
i. Converters /Terminals. At the time a converter or terminal is required for Subscribers to
have access to all services on its System, Company shall make them available to Subscribers
for a fee. Company may require each Subscriber who elects to install a converter or terminal to
furnish a security deposit.
1. Each converter or terminal device shall be and remain the property of the Company.
Company shall be responsible for maintenance and repair of all equipment owned by
Company and may replace it as Company may from time -to -time elect, except that
Subscriber shall be responsible for loss of or damage to any device while in the
Subscriber's possession.
2. Upon termination or cancellation of a Subscriber's service, the Subscriber shall
promptly return Company's property to Company in the same condition as received
excepting reasonable wear and tear.
3. Company may apply the security deposit against any sum due from Subscriber for
loss of or damage to a converter or terminal exceeding reasonable wear and tear. In
the event that no security deposit has been required, the Company may charge the
Subscriber for any damage exceeding reasonable wear and tear.
4. If Company has no claim against the Subscriber's security deposit, Company shall
return it, or the balance, to the Subscriber within thirty (30) days of return of the
converter or terminal.
Section 5.44.080 Design and Construction of System.
The System shall be designed and constructed in accordance with the provisions of
Chapter 13.20 of the Newport Beach Municipal Code and the Franchise. Construction
components and techniques shall be in accordance with Chapter 13.20, the Franchise and all
applicable law.
Section 5.44.090 Operations and Maintenance.
a. Customer Service Standards. The Company shall comply with the following Standards
for Customer Service:
Service Area Office. The Company shall maintain an office in the Service Area, or at
another location as is approved by the City in writing. That office must be open
during all usual business hours, but in no case less than forty eight (48) hours per
week, including during at least one weekend day per week.
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2. Customer Service Center.
Company shall have a publicly listed, non -long- distance - charge telephone
number that is in operation to receive Subscriber Complaints and requests on a
24 -hour basis. This telephone number shall be listed prominently on the front
page of Subscribers' billing in bold print.
ii. A Company shall have a telephone service system to receive all construction
and service complaints. This telephone service shall be in operation no less
than 48 hours each week including eight hours at least one weekend day.
iii. A sufficient number of customer service representatives shall be provided so
that callers are not required to wait more than thirty (30) seconds before being
connected to a customer service representative ninety percent (90 %) of the
time, measured quarterly, or to receive busy signals more than three percent
(3 %0) of the time, measured quarterly.
iv. The telephone number of the local office shall be listed in the telephone
directory serving the City of Newport Beach.
The telephone service system shall be capable of generating reports relating to
answer times, response times, hold times, and abandoned calls.
vi. Customer service personnel shall identify themselves immediately and when
requested, a Spanish- speaking representative will be available for non - English
speaking subscriber complaints.
vii. Customers shall have the right to speak with a supervisor, and if none is
available, a supervisor shall return the customer's call within one working day.
3. Subscriber Complaint Log. The Company= shall maintain information of all
Complaints and their disposition, and a summary thereof shall be submitted to City
on a quarterly basis.
4. Complaint Response Times and Verification. The Company shall respond to
complaints as follows:
Within eight (8) hours after receipt of a request for repairs relating to a Cable
Service Interruption affecting at least ten (10) percent of the Subscribers of the
System;
ii. Within twenty -four (24) hours after receipt of requests for service related to all
other Cable Service Interruptions; and
iii. Within forty -eight (48) hours for all other complaints and requests for repair.
All Cable System related problems shall be resolved within five (5) business days
unless technically infeasible. Verification of Subscriber complaints, including but not
limited to billing complaints, and resolution must occur within forty -eight (48) hours
(provided that the schedule or preferences of the person requesting installation have
not been responsible for the delay); and in any event, resolution must occur within
one (1) week. Those matters requiring additional maintenance, repair, or technical
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adjustments that are documentable as necessitating in excess of one (1) week to
reasonably complete, must be finally resolved within thirty (30) days of the initial
complaint. The City Manager's office may require reasonable documentation to be
provided by the Company to substantiate the request for additional time to resolve a
complaint.
5. Identification. All officers, agents, or employees of a Company, including its
contractors or subcontractors, who come into contact with members of the public
shall wear on at all times on their outer clothing a photo- identification card in a form
reasonably acceptable to City. Company shall account for all identification cards at
all times. Every vehicle of Company, or its major subcontractors, shall be clearly
identifiable as working for that Company.
6. Charges for Repairs. No charge shall be made to a Subscriber for service or repairs,
except that Company may charge for service calls not related to its Cable System, or
that are caused by the Subscriber or members of its household, or the Subscriber's
agents or guests.
b. System Performance Audit. The Franchise shall direct the following:
City shall require that a System Performance Audit be conducted biannually at
Company's expense by an independent technical consultant selected by City to
verify that the System complies with all technical standards, including but not limited
to signal strength, and other specifications of the Franchise. Upon completion of an
Audit, the Company and City shall meet to review the performance of the Cable
System. The reports required by this Chapter regarding Subscriber complaints, the
records of performance audits and tests, and the opinion survey report shall be
utilized as the basis for review. In addition, any Subscriber may submit complaints
prior to or during the review meetings, either orally or in writing, and these shall also
be considered.
Within thirty (30) days after the conclusion of the System Performance Audit review
meetings, City shall issue findings with respect to the adequacy of System
performance and quality of service. If areas of non - compliance are found, City may
direct Company to correct the non - compliance within a period of time as City
determines is reasonable.
2. Participation by the City and the Company in this process shall not waive any rights
they may possess under applicable federal or state law.
3. In addition to the Performance Audit described above, City may conduct audits of the
same or lesser magnitude, at its sole expense, when and if determined necessary or
appropriate by City.
c. System Technical Data. Company shall provide and maintain system technical, data,
including but not limited to signal strength testing information. All technical data
reasonably necessary to demonstrate a Company's compliance with FCC regulations,
this Chapter, and the Franchise shall be available for City's inspection during normal
business hours upon two (2) business days notice. In the event of System failure or
other operating emergency, the technical data will be made available at any time, so long
as the provision of the data does not unreasonably interfere with Company's operations.
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d. System Location Data. The Company shall provide the City with data in a digital or other
format specified by the City which details and documents all the geographic locations of
Facilities located in PROW. The computer disk or other record shall be updated
whenever there have been significant changes in the location of the Facilities or at the
Director's discretion. In addition, the Company shall maintain in its local office a
complete, fully - dimensioned, and up -to -date set of as- built system maps and drawings
upon completion of construction. As -built drawings shall show all Facilities. The scale of
maps and drawings shall be sufficient, to show the required details in easily readable
form and size.
e. Emergency Repair Capability. It shall be Company's responsibility to assure that its
personnel, qualified to make repairs, are available at all reasonable times and that, they
are supplied with keys, equipment location instructions, and technical information
necessary to begin repairs upon notification of the need to maintain or restore .
continuous service to the System.
f. Refund. When a Subscriber voluntarily discontinues service, Company shall refund,
within thirty (30) days of the discontinuance of service, the unused portion of any
advance payments or deposits after deducting any charges currently due through the
date of discontinuance. Unused payment portions shall be the percentage of time for
which Subscriber has paid for service yet will not receive the service because of the
Subscriber's discontinuation of service.
f. Disabled Access.
1. The Company shall provide maximum practicable availability of the Services and
facilities of the System to disabled persons. At a minimum, the Company shall
provide a single remote control device for each television set connected to the
Service to those Subscribers who are paraplegic or quadriplegic.
2. Upon initiation of Service in the City, the Company shall submit to the City a plan
and /or report describing the equipment, facilities, and ongoing services the Company
intends to or does make available to disabled persons. Information regarding the
facilities, equipment, and ongoing services for disabled persons shall be kept
updated and the Company shall promptly submit to the City notification of any
deletions or additions to the information.
3. The Company shall provide within forty -five (45) days of a request from a Subscriber,
for rental or purchase, equipment which facilitates the reception of all cable channels
by hearing- impaired Subscribers in accordance with the FCC's regulations regarding
Closed Captioning. The Company shall also provide TDD (or equivalent) equipment
at the Company office that will allow the Subscribers to contact the Company for any
reason related to the System.
g. Installations.
1. All installations will include appropriate grounding, adjustment of the television set in
order to receive Service, and the provision of required Subscriber information and
literature to instruct the Subscriber in the utilization of the Services.
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2. The Company shall offer Subscribers the option to receive an A/B switch at the time
of initial Service installation for no additional installation cost, and shall provide
Subscribers with written information on how to use an A/B switch.
3. Upon Subscriber request, the Company shall provide an A/B switch after the initial
installation of Service. If the Subscriber requests installation of the A/B switch, the
Company may charge reasonable fees for the installation which fee shall not exceed
the maximum rate permitted by applicable law.
4. When applicable, if the Company cannot perform standard installations within nine
(9) calendar days of request by a Subscriber (provided that the schedule or
preferences of the person requesting installation have not been responsible for the
delay), the Subscriber may request and is entitled to receive a $20.00 credit.
Repeated failure to perform standard installations within the nine (9) calendar days or
to provide the credit for late installations shall be grounds for Franchise revocation or
other enforcement actions.
h. Service Interruptions and Other Service Problems.
The Company shall render efficient service, make repairs promptly, and interrupt
Service only if unavoidably necessary and for the shortest period possible. The
interruptions, insofar as possible, shall be preceded by reasonable notice to each
affected person and shall occur during periods of minimum System use.
2. The Company shall promptly notify the City of any significant "Service Interruption" in
the operation of the System. For the purposes of this Section, a "significant Service
Interruption in the operation of the System" shall mean any interruption of Cable
Services of at least four (4) continuous hours to at least ten percent (10 %) of the
Subscribers in the area or areas of the Company served by the Company.
The Company shall exercise its best efforts to limit any Service Interruption for the
purpose of maintaining, repairing, or reconstruction of the System to periods of
minimum use. Except in an emergency or other situation necessitating a more
expedited or alternative notification procedure, the Company may schedule a Service
Interruption for a period of more than four (4) hours during any twenty -four (24) hour
period only after the Company and each affected Subscriber in the Company have
been given twenty -four (24) hours prior notice of the proposed interruption.
4. Technicians employed by the Company and capable of performing Service- related
emergency repairs and maintenance must be available twenty -four (24) hours a day,
every day, including weekends and holidays.
5. Excluding conditions beyond the control of the Company, the Company will begin
working on Service Interruptions promptly and in no event later than twenty -four (24)
hours after the interruption becomes known (including weekends and holidays).
"Working on" constitutes taking positive steps toward rectifying the problem and not
merely acknowledging the problem.
6. Automatic Credits. The Franchise shall require that:
i. Outage of All Channels. The Company shall provide an automatic credit to all
affected Subscribers within the Outage area when there is an Outage of all
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channels for a period of twenty -four (24) consecutive hours or more, regardless
of the cause of the Outage. The credit for an Outage shall equal, at a minimum,
the value of one- thirtieth (1130) of each Subscriber's monthly bill for the first
twenty -four (24) consecutive hour period and prorated for each additional four (4)
hour period or portion thereof that the Outage continues.
ii. Outage of Premium Service. The Company shall provide an automatic credit to
all affected Subscribers when there is an Outage of any Premium Service for a
period of twenty -four (24) consecutive hours or more which affects an entire
franchise area, or other discrete area of the Company served by the Company,
regardless of the cause of the Outage. The credit shall equal, at a minimum, the
value of one - thirtieth (1130) of each Subscriber's monthly bill for that Premium
Service for the first twenty -four (24) hour consecutive hour period and prorated
for each additional four (4) hour period or portion thereof that the Outage
continues.
iii. Outage of Non- Premium Service. The Company shall provide a credit to a
Subscriber whenever an Outage or Outages of four or more hours in a twenty -
four (24) hour period has affected any of the non- premium channels received by
a Subscriber as part of their Service. The credit shall equal the value of one-
thirtieth (1/30) of each Subscriber's monthly bill for Outages of four (4) hours or
greater duration occurring in a twenty -four (24) hour period. In the event that a
premium channel is affected by the Outage, the credit shall equal the value of
one - thirtieth (1/30) the Subscriber's monthly premium rate for each Outage of
four (4) hours or greater duration occurring in a twenty -four (24) hour period. The
Company need not provide a credit under this paragraph (iii) if the Company has
provided a credit under paragraph O or (ii) to the same subscribers for the same
Outage.
7. Repeated failure to provide the proper credit for Outages shall be grounds for
Franchise revocation or other enforcement actions.
Service Appointments. The Franchise shall require the Company to comply with the
following:
1. The "appointment window" alternatives for installations, service calls for Cable
Service, and other installation activities will be either a specific time or, at maximum,
a four -hour time block during normal business hours. The Company may schedule
services calls for Cable Service and other installation activities outside or normal
business hours for the convenience of the Subscriber.
2. If the Company does not arrive for appointments for installations or service calls
within a designated 4 -hour time frame agreed to by the Subscriber, the Subscriber
may request and is entitled to receive a $20.00 credit. If the Company fails to
provide a credit, and the request was made by the Subscriber within 60 days of the
missed appointment, the City may direct the Company to issue the credit. Repeated
failure to provide the credit shall be grounds for Franchise revocation.
3. The Company may not cancel an appointment with a Subscriber after the close of
business on the business day prior to the scheduled appointment.
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4. If the Company's representative is running late for an appointment with a Subscriber
and will not be able to keep the appointment as scheduled, the Company will
document a diligent effort to contact the Subscriber directly. If, however, the
Subscriber is unavailable at the time the contact attempt is made, the Company will
attempt a second documented contact at least one more time during the previously
agreed upon appointment window. The appointment will be rescheduled, as
necessary, at a time which is convenient to the Subscriber. Contacting the
Subscriber will not necessarily excuse a missed appointment. In the event that it is
necessary for Company to contact the Subscriber regarding the scheduled
appointment and Subscriber is not available, Company will use its best efforts to
provide the Subscriber with a phone number to contact Company.
j. Annual Notice. At least once a year, the Company shall communicate in writing with all
Subscribers. At a minimum, this communication shall comply with Federal regulations
and shall contain statements or provisions addressing each of the following issues:
Complaint Handling. Any complaints or inquiries not satisfactorily handled by the
Company may be referred to the Company Manager, whose phone number shall be
shown on the communication.
2. Schedule. A complete schedule of all current programming services, excluding pay -
per -view, rates and charges and promotional offers.
3. Subscriber Bill of Rights. The Company shall provide Subscribers with the
Subscriber Bill of Rights ( "SBR "). The SBR may be in a form commonly distributed
by a Company throughout its service area, provided that the SBR describes, in
understandable language:
i. The Subscriber's rights and obligations that are generally provided under the
Franchise and federal law, including a description of how to contact the Company
and, if necessary, the City, in the event of an unresolved Subscriber complaint;
ii. The Subscriber's rights to credits or free service when any of the conditions
described within Section 5.44.090 (h)(6) apply.
k. Notices of Rate. Pricing or Services Changes.
Notice of any pricing changes or additional charges and /or any changes in
programming services must be made as soon as possible. In no instance shall a
company increase rates or change a programming schedule without at least thirty
(30) days advance notice of the changes.
2. Notices of changes in rates shall indicate the new rate inclusive of all fees and /or
other fees and the amount the rate has increased or decreased from the current rate.
Specific words such as "increase" or "decrease" must be used to describe the
changes (as opposed to less specific terms, such as "adjustment ").
3. Notices of changes of programming services and /or channel locations shall include a
description of the new programming service, the specific Channel Location, and the
hours of operation of that programming service. In addition, should the Channel
Location, hours of operation, or existence of other programming services be affected
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by the introduction of a new service, this information must also be included in the
notice.
4. In order that Subscribers are fully apprised of the charges they may incur, the
Company shall advertise rates that include all costs and fees.
I. Other Notices,
1. Free Programming. If Company offers any channels with programming rated NC -17,
R, X, or the equivalents thereof full or part-time without charge, Company shall
include the rating(s) of the programming to be made available for viewing and the
right of the Subscriber to have the Company block the programming. The Company
shall provide, by sale or lease, a device for blocking this programming.
2. Notices about the Franchise Fee. Whenever a Company describes to Subscribers in
writing the City's collection or administration of the Franchise Fee, it shall do so in a
manner and form acceptable to the City.
3. Notices to New Subscribers. Before providing Cable Service to any Subscriber,
Company shall provide the Subscriber Bill of Rights to Subscriber and shall include a
written notice to the Subscriber containing substantially the following information:
"Subscriber understands that (insert Name of Company) uses public
rights -of -way and other facilities of the City of Newport Beach in providing
service and that this continued use cannot be guaranteed. Subscriber
agrees not to make any claims against the City of Newport Beach or its
officers or employees in the event that the use is denied for any reason,
and (insert Name of Company) is unable, in its discretion, to provide
service over alternate routes.
m. Disconnections /Denial of Service.
The Company shall not terminate residential Service for nonpayment of a delinquent
account unless the Company furnishes a notice of the delinquency and impending
termination at least fifteen (15) days prior to the proposed termination. The notice
shall be mailed, postage prepaid, to the Subscriber to whom the Service is billed.
This notice shall not be mailed until the sixteenth (16 h) day after the date the bill for
Services was mailed to the Subscriber. The notice of delinquency and impending
termination may be part of a billing statement.
2. Notice of Termination. Every notice of termination of Service shall include all of the
following information:
The name and address of the Subscriber whose account is delinquent;
ii. The amount of the delinquency;
iii. The date by which payment is required in order to avoid termination of Service;
iv. The telephone number of a representative of the Company who can provide
additional information and handle complaints or initiate an investigation
concerning the Service and charges in question.
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3. The Company shall only terminate Cable Service on days when the Subscriber can
reach a representative of the Company either in person or by telephone. Cable
Service terminated without good cause must be restored without charge for the
Cable. 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.
n. Deposits, Refunds and Credits.
The Company may require refundable deposits in circumstances where deposits are
necessary to protect equipment or to ensure payment where there is reasonable
evidence of a risk of nonpayment, provided that the Company shall be required to
pay simple interest at a rate of one -half percent (112 %) per month (6% per year).
Interest shall be accrued and payable upon termination of Service. Upon termination
of Service for any reason, Subscribers will be entitled to receive a refund or credit,
against amounts owed the Company equal to the deposit plus accumulated interest.
2. Refund checks will be issued promptly following the resolution of the event giving rise
to the refund; and by the earlier of either:
L The Subscriber's next billing cycle; or
ii. Thirty (30) days.
3. If the Company does not mail a check for a refund (including applicable interest) to
any Subscriber disconnecting Service with an outstanding credit within thirty (30)
days of the date Cable Service is ended, and the Subscriber has returned all
Company owned equipment, the Subscriber may request and is entitled to receive a
$4.75 (or such other amount as may be permitted pursuant to State law) payment, in
addition to the total refund (and applicable interest) due. If the Company fails to
provide the $4.75 payment and the request was made by the Subscriber within sixty
(60) days after failure to receive the refund, the City may direct the Company to
provide the $4.75 payment as well as any outstanding refund (and applicable .
interest) due. Repeated failure to provide the $4.75 payment shall be grounds for
Franchise revocation and /or other enforcement actions.
4. Credits for Cable Service will be issued no later than the Subscriber's next billing
cycle following the determination that a credit is warranted.
o. Rates, Fees, And Charges.
1. The Company shall not, except to the extent expressly permitted by law, impose any
fee or charge on any Subscriber for:
Any service call to a Subscriber's premises to perform any repair or maintenance
work related to Company, installed equipment necessary to receive Service,
except any work which was necessitated by a negligent or wrongful act of the
Subscriber; or
ii. The disconnection of any Services to a Subscriber, provided that the Company
may impose appropriate charges if, at the time of disconnection, some or all of
the Company's equipment is not returned to the Company or the Subscriber has
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not paid all outstanding fees and charges due to the Company; or there is
damage to the equipment of the Company, excluding normal wear and tear and
the circumstances described in the next paragraph.
2. Where the actions of the Company, its agent(s) or subcontractor(s) can be shown
upon a reasonable demonstration of evidence to have contributed to the theft, loss or
damage of a converter or other equipment lawfully used by a Subscriber, the
Subscriber's liability with respect to the converter or other equipment shall be
reduced to the extent of the contributing actions.
3. All charges for Services must be applied on a nondiscriminatory basis recognizing
that the Cable Act allows for reasonable discounts to senior citizens and /or the
economically disadvantaged and that a Company may, upon reasonable notice to
Subscribers, conduct promotional campaigns in which rates are discounted or
waived, and may offer bulk rate discounts for multiple dwelling units, hotels, motels,
and similar institutions.
p. Enforcement.
1. Repeated failure to comply with any or all of the provisions delineated above shall be
grounds for Franchise revocation in accordance with the Franchise revocation
procedures and /or other enforcement actions.
2. The City may seek injunctive relief or any other judicial remedy available pursuant to
state or federal law in order to enforce compliance with these standards.
q. Rights Reserved By City.
1. Additional Subscriber Service Standards. The City reserves the right to establish
additional, reasonable Subscriber Cable Service standards from time to time, as may
be necessary, after making a finding of need and after notice to and opportunity to be
heard from the Company has been afforded.
2. Rate Regulation. The City reserves the right to regulate rates for Cable Service to
the fullest extent permitted by law. Notwithstanding anything in these standards to
the contrary, in the event that the Cable Act is amended or repealed, or restrictions
on the authority of the City to regulate rates are otherwise removed or lessened, or
the FCC or any court permits the City to regulate rates, the City may, at its discretion,
establish additional procedures and standards for rates and regulate rates to the
fullest extent of its regulatory authority under federal, State, and local laws.
3, Performance Meetings. Upon request of the City, the Company shall meet with the
City to review the requirements set forth, in this Chapter or the Franchise.
4. Cable Review Board. The City reserves the right to create and maintain a Cable
Review Board. Upon request of City, the Company shall send a representative to
Cable Review Board meetings to provide cable related information and to respond to
Subscriber and City inquiries and complaints.
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Section 5.44.100 Violations.
a. Use of Public Streets. Pursuant to Section 1300 of the City Charter, it is unlawful for any
person to construct, install, or maintain in any public place within the City's Territory, or upon
any easement owned or controlled by a public utility, or within any other public property of City,
or within any privately -owned area within City's jurisdiction which is not yet, but is designated as,
a proposed public place on a tentative subdivision map approved by City, any equipment,
Facilities, or System for distributing signals or services through a cable television system,
without a valid Franchise.
b. Unauthorized Connections. It shall be unlawful for any person to make or use any
unauthorized connection to, or to monitor, tap, receive or send any signal or service via a
franchised System; or to enable any Person to receive or use any service, television or radio
signal, picture, program, or sound, or any other signal without payment to the owner of the
System.
c. Tampering with Facilities. It shall be unlawful, without the consent of the owner, to
willfully attach to, tamper with, modify, remove or injure any physical part of or signals on a
franchised System. However, the City or its contractors may remove or modify franchised
System if Company fails to locate or relocate System provided that City has adequately notified
Company via the Underground Service Alert or similar system.
Section 5.44.110 Termination and Related Rights.
a. Material Breach.
1. In the event that the Company fails to comply with a material provision of any
franchise, then, in accordance with the procedures provided herein, the City may
revoke the franchise granted herein and terminate any franchise in accordance with
the procedure set forth below.
2. A failure to comply with a material provision of any Franchise shall include, without
limitation, any of the following acts or failures to act by the Company, an Affiliated
Person or the Guarantor of any of the following events, unless excused by the City.
Substantial failure to provide required financial information;
ii. Substantial failure to satisfy the requirements regarding System
characteristics or repeated failure to meet the technical performance
standards, as provided in any franchise;
iii. Substantial or repeated failure to provide any Cable Service to any Person as
required by any franchise;
iv. Substantial failure to maintain the mix, level, and quality of Services within the
broad categories of video programming and other services as set forth in any
franchise;
V. Abandonment of the System, in whole or in material part, without the prior
written consent of the City;
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vi. Substantial failure to supply the PEG Channels and related facilities and
equipment after the date by which the items must be supplied, as provided in
any franchise;
vii. Substantial failure to comply with interconnection requirements as provided in
any franchise;
viii. Substantial and repeated imposition of any nonstandard Installation and other
charges for Basic Service which are discriminatory;
ix. Substantial and repeated failure to comply with consumer service standards;
X. Substantial failure to comply with the privacy rights of Subscribers as
provided in this Chapter, any franchise, or Section 631 of the Cable Act or
Section 637.5 of the California Penal Code;
A. Substantial failure to make any of the Franchise Fee compensation payments
as provided herein, or any other payments required by this Chapter or any
franchise, or to maintain the bond or other instrument in the amount required
herein;
xii. Substantial failure to comply with any rules, laws, regulations, orders or other
directives of the City issued pursuant to the police powers or pursuant to this
Chapter or any franchise;
xiii. The taking of any material action which requires the approval or consent of
the City Council without having first obtained the approval or consent, as
provided in Section 5.44.030 of this Chapter;
xiv. Substantial failure to furnish and maintain throughout the term of any
franchise the liability and indemnification insurance coverage;
xv. To engage in a course of conduct intentionally designed to practice any fraud
or deceit upon the City, any Subscriber, or any other use of the System;
xvi. Failure to cooperate fully and faithfully with any lawful investigation, audit or
inquiry conducted by a governmental agency;
xvii. Any material written misrepresentation, intentionally made by or on behalf of
the Company in its proposal for the franchise granted pursuant to any
franchise, or in connection with the negotiation or renegotiation of, or any
amendment or other modification to any franchise, to the extent that any
misrepresentation was relied upon by the City;
xviii. The conviction or determination of factual guilt, of the Company, any Affiliated
Person, any director or executive officer of the Company or of an Affiliated
Person, any Person holding Control of or a Controlling Interest in the
Company; or any employee or agent of the Company or of any Affiliated
Person acting under the express direction or with the actual consent of the
Company, its directors or officers, of any criminal offense, including, without
limitation, bribery; fraud or misrepresentation arising out of or in connection
with the award, transfer, application for rate increase, or other regulation of
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any franchise, provided that the right to terminate any franchise in the event
of the convictions shall arise only with respect to any of the foregoing
convictions of the Company itself and, in the event of the conviction of any
other Persons specified in this subsection, if the Company fails to
disassociate itself from, or terminate the employment of, other Persons with
respect to activities in the Franchise Area or any other activities affecting the
System, within thirty (30) days after the time in which appeals from a
conviction may be taken, or within thirty (30) days following the final
determination of all appeals which are in fact taken;
xix. The conviction of any City officer, City employee, or City agent of the offense
of bribery or fraud which arises out of or in connection with any intentional
action by the Company, any Affiliated Person, any director or executive officer
of the Company or of any Affiliated Person, any Person holding Control of or
a Controlling Interest in the Company, or of any employee or agent of the
Company or of any Affiliated Person acting under the express direction or
actual consent of the Company or any of the foregoing, which act was
undertaken for the benefit of the Company;
xx. Any material false entry knowingly made in the books or accounts or records
of the Company, or any substantial false statements knowingly made in any
report or filing to the City or any governmental agency or otherwise by the
Company, any director, officer, or other Person holding a Controlling Interest
in the Company, any Affiliated Person, or any employee or agent of the
Company acting under the express direction or with the actual consent of the
Company;
xxi. Failure to comply with a duly constituted lawful order or ruling of any City
regulatory body having jurisdiction over the Company;
xxii. Substantial failure to comply with the access origination point requirements as
set forth in any franchise; or
xxiii. Substantial failure to comply with the construction requirements set forth in
any franchise.
Notwithstanding the foregoing, if, as a result of a failure or alleged failure to comply
with a material provision of any franchise as delineated in the foregoing subsections,
the Company is unable to comply with any other material provision(s) which
necessarily and directly arise(s) out of the failure or alleged failure as delineated in
the subsections, the inability to comply with the other provision(s) shall not be
deemed to be an independent failure to comply with a material provision of any
franchise.
3. The City Council may exercise its right to revoke and terminate the franchise for a
failure by the Company to comply with a material provision of this Chapter and /or any
franchise in accordance with the following procedures:
The City shall notify the Company, in writing, of an alleged failure to comply
with a material provision of the Franchise. The notice shall specify the
alleged failure with reasonable particularity. The Company shall, within forty -
five (45) days after receipt of the notice, either cure the alleged failure or, in
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the event the failure cannot be reasonably cured within forty -five (45) days,
within a reasonable time, provided the Company commences to cure within
the forty-five (45) days and diligently pursues the cure to completion, or, in a
written response to the City, the Company shall either present facts and
arguments in refutation or excuse of the alleged failure or state that the
alleged failure will be cured and set forth the method and time schedule for
accomplishing the cure.
ii. The City shall investigate: (a) whether a failure to comply with a material
provision has occurred; (b) whether the failure is excusable; and (c) whether
the failure has been cured or will be cured by the Company.
iii. If the City determines that a failure to comply with a material provision has
occurred and that either the failure is not excusable or has not been or will not
be cured by the Company, then the City shall so notify the Company.
iv: At the conclusion of or in the event that the investigation is not concluded, as
provided above, the City shall, within thirty (30) days, provide notice of a
public hearing at which the Company shall have the opportunity to respond to
the claim that a material breach has occurred and to present facts and
arguments in refutation or excuse of an alleged breach, or to demonstrate
that a failure shall be cured as provided in any franchise.
V. All final City determinations with respect to revocation or termination must be
made by the City Council. Notwithstanding any final determination by the City
Council, the Company maintains its rights of appeal, if any, under applicable
law.
4. Circumstances Beyond Control of the Company. The Company shall not be subject
to sanction when its performance is prevented for reasons beyond its control, unless
the occurrences or conditions are intentionally caused or created by the Company; or
by an Affiliated Person at the Company's express direction.
5. Pending Litigation. Except when enjoined by a court of law, litigation pending against
the Company shall not excuse the Company from the performance of its obligations
under this Agreement. The Company may petition.the City to be excused from the
performance of its obligation under this Chapter because of pending litigation which
the City may grant or deny in the exercise of its discretion.
b. Termination
1. The termination of any franchise and the Company's rights therein shall become
effective upon the earliest to occur of the:
Revocation of the franchise by action of the City Council;
ii. Abandonment of the System, in whole or material part, by the Company without
the express prior approval of the City; or
iii: Expiration of the term of the franchise, if not renewed or extended. In the event of
any termination, the City shall have all rights as provided in any franchise,
including, without limitation, the right to order the Company to continue to operate.
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the System or to then or thereafter remove the System, or to acquire or affect a
transfer of the System. In any event, the Company maintains its rights of appeal,
if any, under applicable law.
2. In the event of any termination of any franchise, the City Council may direct the
Company to operate the System on behalf of the City pursuant to the provisions of
this Chapter and additional terms and conditions as are equitable and mutually
agreeable to the City and the Company or a third party, for a period of up to twelve
(12) months, in which event the Company or third parry, as applicable, shall be
entitled to all revenues generated by the System during a period of continued
operation. In the case of operation of the System by a third party, the Company shall
be entitled to a fair rental for use of the System.
3. Upon the termination of any franchise due to the expiration of the term of the
franchise granted herein; if not renewed or extended, the Company shall be entitled
to cancel the performance bond or letter of credit, after account is taken for all offsets
necessary to compensate the City for any uncured failure to comply with any
provision of any franchise as herein provided. If the Company continues to operate
the System following the termination of any franchise, the Company shall not be
entitled to cancel a bond or letter of credit until the end of continued operation. In the
event of a termination of any franchise for cause due to a material breach by the
Company or otherwise, the bond or letter of credit shall become the property of the
City to the extent necessary to cover any costs, loss, or damage incurred by the City
as a result of the termination or material breach, provided that any amounts in excess
of the costs, loss or damage shall be refunded to the Company or surety, as
applicable.
In the event of any termination, the City may purchase the Cable System in
accordance with the procedures of this section. In this event, the price to be paid for
the Cable System to Company shall be the price the Cable Act requires.
5. Upon any acquisition or transfer, and, if applicable, receipt of payment by the
Company from the City, the Company shall:
L Cooperate with the City in maintaining the distribution of all Services over the
System during acquisition or transfer of ownership;
ii. Promptly execute all appropriate documents to . transfer to the City or third party,
free of any and all encumbrances, title to the System, as well as all contracts,
leases, licenses, and rights necessary to maintain the System and the distribution
of Services over the System; and
iii. Promptly supply the City with all necessary records to operate the System,
including, without limitation, all Subscriber records and plant equipment layout
documents.
6. Upon any termination of any franchise, if so directed by the City, the Company shall,
at its own cost and expense, promptly remove that part of the System located in the
right -of -way and shall replace or repair and restore to serviceable condition each
affected Facility therein, in the manner as set forth in this Chapter and Chapter 13.20
of the Newport Beach Municipal Code.
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7. In the event of any acquisition of the System by the City pursuant to this Chapter, and
subject to the requirements of applicable law the City:
i. Shall not be required to assume any of the obligations of any collective
bargaining agreements or any other employment contract held by the Company
or any other obligations of the Company to any of its officers, employees, or
agents, including, without limitation, any pension or other retirement, or any
insurance obligations; and
May lease, sell, operate, or otherwise dispose of all or any part of the System in
any manner, provided that the Company may seek the award of any franchise to
construct, operate, or maintain the System in connection with any sale.
Section 5.44.120 Franchise Applications.
Applicants for an initial franchise shall submit to the City, or to its designated
representative, written application in a format provided by the City, at the time and place
specified by the City for accepting applications, and accompanied by the designated application
fee. A nonrefundable application fee, established by resolution of the City, shall accompany the
application for an initial franchise to cover all costs associated with processing the application,
including without limitation, costs of administrative review, financial, legal and technical
evaluation of the applicant, the costs of consultants (including technical and legal experts),
notice and publication requirements, and document preparation expenses. In the event that
costs exceed the application fee, the applicant shall pay the difference to the City within twenty
(20) days following receipt of an itemized statement of the costs. This provision is procedural
and shall not constitute the grant of any right to a Company to renewal or otherwise. This
provision does not apply to any renewal of an existing franchise.
Section 5.44.130 Records; Reports; Right to Inspect and Audit; Experts.
a. Company to Provide Records. All reports and records required under this Section shall
be furnished at the sole expense of the Company.
b. Reports of Financial and Operatinq Activity. No later than ninety (90) days after the
close of a Company's fiscal year, the Company shall submit an audited written report to the City
which shall include:
A Financial Report, audited and certified by a financial officer of Company, for all Cable
System activity in the City during the previous fiscal year, including Gross Annual
Receipts from all sources and gross subscriber revenues from each service. The Report
must set out separately all gross receipts from all sources in the City and gross
subscriber revenues from each Cable Service in the City, and all payments, deductions,
and computations of franchise fees.
2. A summary of the previous year's subscriber totals, new services offered and System
construction activity.
3. A current list of Company's officers, directors, and other principals if there has been any
change in the previous year.
4. A list of stockholders or other equity investors holding five percent (5 %) or more of the
voting interests in Company if there has been any change in the previous year.
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c. Performance Tests and Compliance Reports. Upon written request of City, a Company
shall provide a written report of any FCC or other performance tests conducted by the Company.
In addition, the Company shall provide reports of the test and compliance procedures required
by its franchise, or by this Chapter, no later than thirty (30) days after the completion of those
tests and compliance procedures.
d. _Additional Reports and Data. The Company shall prepare and furnish to the City in
writing, at the times and in the form prescribed by City, such additional reports or data as City
may require to confirm and verify Company's compliance with the provisions of its franchise and
this Chapter.
e. Examination of Facilities. Upon two (2) business days notice, and during normal
business hours, a Company shall permit examination; by any duly authorized representative of
the City, of all Franchise property and facilities, together with any appurtenant property and
facilities of the Company situated within the Public Rights -of -Way which are related to the Cable
System.
f. Right to Audit.
In addition to any other inspection rights under this Chapter or the Franchise, upon
thirty (30) days prior written notice, the City shall have the right to inspect, examine, or
audit, during normal business hours, all documents pertaining to a Company or any
Affiliated Person which are reasonably necessary to ascertain a Company's
compliance with its Franchise or this Chapter. All documents pertaining to financial
matters which may be the subject of an audit by the City as set forth herein shall be
retained by a Company for a minimum of five (5) years during the term of and
following the termination of a Franchise. Access by the City to any of the documents .
covered by this Section shall not be denied by the Company on grounds that the
documents are alleged by the Company to contain proprietary information.
2. The City may require written certification by a Company's directors, officers, or other
employees with respect to all documents referred to in this Section.
3. Any audit conducted by the City pursuant to this Section shall be conducted at City's
expense. City shall prepare a written report containing its findings, a copy of which
shall be mailed to a Company. Company shall reimburse the City for the expense of
this audit if, as the result of the audit, it is determined that there is a shortfall of more
than two percent (2 %) in the amount of franchise fees or other payments which have
been made or will be made by a Company to the City pursuant to the terms of the
Franchise.
g. Retention of Exoerts. In the exercise of its rights under this Chapter, the City shall have
the further right to retain technical experts and other consultants on a periodic basis for
the purpose of monitoring, testing, and inspecting any construction, operation,
maintenance or reconstruction of the System, and all parts thereof, or to ensure
compliance with and enforcement of the provisions of this Chapter and the Franchise.
The City shall bear the cost of retaining the experts, provided that, unless prohibited by
applicable law, the Company shall reimburse the City for all expenses related to the
retention of the experts where this Chapter or the Franchise so provide, or under either
of the following circumstances:
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1. The Company has initiated proceedings which would normally require. the City to
retain the experts, such as the filing of a request for approval of a transfer or change
in Control, renewal to the extent allowed by law, expansion of the Franchise Service
Area, or the modification or amendment of the Franchise; or
2. The reports of the experts submitted to the City reveal that the Company has failed to
substantially comply with the terms and conditions of this Chapter or of the
Franchise.
If Company is required to reimburse City pursuant to this paragraph (g), City shall send
Company an itemized description of the charges, and Company shall pay the amount
within forty -five. (45) days after the receipt of the description.
Section 5.44, 135 Indemnity and Liability Insurance.
a. To the maximum extent permitted by applicable law, a Company shall at all times
defend, indemnify, protect, save harmless, and exempt the City, the City Council, its officers,
agents, servants, attorneys and employees, from any and all, penalties, damages or charges
arising out of claims, suits, demands, causes of action; award of damages, imposition of fines
and penalties, whether compensatory or punitive, or expenses arising therefrom, either at law or
in equity, which arise out of, or are caused by, the construction, erection, location, performance,
operation, maintenance, repair, installation, replacement, removal or restoration of Facilities
within the City based upon any act or omission of a Company, its agents or employees,
contractors, subcontractors, independent contractors, or representatives except for that which is
attributable to the sole negligence or willful misconduct of the City, the City Council, its officers,
agents, servants, attorneys and employees. With respect to the penalties, damages or charges
referenced herein, reasonable attorneys' fees, consultants' fees, and expert witness fees are
included as those costs which shall be recovered by the City.
b. Except as provided in or as supplemented by any Franchise Agreement, License or
Permit, a Company shall secure and maintain, public liability, property damage insurance, and
umbrella coverage in at least the following amounts:
Public liability: Two (2) million dollars per person /per occurrence;
2. Property Damage: Two (2) million dollars per any one claim;
3. Umbrella liability: Five (5) million dollars.
c. The public and personal liability and property damage insurance policy shall specifically
include the City, the City Council, its employees, and agents as additional insureds.
d. The public and personal liability and property damage insurance policies shall be issued
by an agent or representative of an insurance company licensed to do business in the State and
which has one of the three highest or best ratings from the Alfred M. Best Company.
e. The public liability and property damage insurance policies shall contain an endorsement
obligating the insurance company to furnish the Director with at least thirty (30) days written
notice in advance of the cancellation of the policy.
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f. Renewal or replacement policies or certificates shall be delivered to the Director at least
fifteen (15) days before the expiration of the insurance which such policies are to renew or be
replaced.
g. Before a Company commences any construction, the Company shall deliver the policies
or certificates representing the insurance to the Director as required herein.
h. The Director may adjust the coverage amounts specified in paragraph (b) of this Section
provided that the adjustments result in the Company meeting or exceeding the coverage
specified in this Section.
Section 5.44.140 Miscellaneous Provisions.
a. Captions. The section, subsection, paragraph, and subparagraph numbers and letters,
and the captions throughout this Chapter, are intended to facilitate reading and reference. The
numbers, letters, and captions shall not affect the meaning or interpretation of any part of this
Chapter.
b. Franchise References. A Franchise which cites, refers to, or otherwise incorporates this
Chapter, or portions thereof, shall be deemed to be a Franchise issued under and subject to this
Chapter.
c. Filing. When not otherwise specified in this Chapter, all documents required to be filed
with City shall be filed with the City's representative as designated by City.
d. Non- enforcement by the City. A Company shall not be excused from complying with any
of the requirements of this Chapter; and of its Franchise, and all laws and regulations, or any
subsequently adopted amendments to this Chapter, by any failure of the City on any one or
more occasions to seek, or insist upon, compliance with the requirements or provisions of the
Chapter or Franchise.
e. Continuity of Service. It is the right of all Subscribers to receive Cable Services so long
as their financial and other obligations to a Company are honored. In the event that a Company
elects to rebuild, modify, or sell the System, a Company shall use due diligence and reasonable
care to ensure that all Subscribers receive continuous, uninterrupted service. In the event of a
transfer of the System by Company, the current Company shall cooperate with the City or new
Company to operate the System for a temporary period, in order to maintain continuity of service
to all Subscribers. In the event that Company, through its own fault, discontinues system -wide
service for seventy -two (72) continuous hours, and Company is in material default of its
Franchise, or if the Franchise is revoked by City (but not if City fails to renew the Franchise), City
may, by resolution, when it deems reasonable cause to exist, assume operation of the System
for the purpose of maintaining continuity of service. City's operation of the System may continue
until the circumstances which, in the judgment of the City, threaten the continuity of service are
resolved to City's satisfaction. City shall be entitled to the revenues for any period during which
it operates the System.
f. Operation by City. During any period when the System is being operated by City
pursuant to paragraph (a) above, City shall, as it may deem necessary, make any changes in
any aspect of operations that, in City's sole judgment, are required for the preservation of quality
of service and service continuity.
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g. Management by City. City may, upon assuming operation of a System franchised
hereunder, appoint a manager to act for it in conducting the System's affairs. The manager shall
have the authority as may be delegated by City and shall be solely responsible to City for
management of the System. Company shall reimburse City for all its reasonable costs, in
excess of System revenues, incurred during City's operation if the Franchise is in full force and
effect during the period of City's operation.
h. Notices. All notices and other communications to Company and to City shall be set forth
in the Franchise.
i. Force Majeure; Company's Inability to Perform. In the event Company's performance of
any of the terms, conditions, obligations, or requirements of this Chapter, or any Franchise
granted hereunder, is prevented or impaired due to any cause beyond its reasonable control
and not reasonably foreseeable, the inability to perform shall be deemed to be excused, and no
penalties or sanctions shall be imposed as a result. The causes beyond Company's reasonable
control and not reasonably foreseeable shall include, but not be limited to, any acts of God, civil
emergencies, labor unrest, strikes, utility interruptions, inability to obtain access to an
individual's property on reasonable terms, and any inability of a Company to secure all required
authorizations or permits to utilize necessary poles or conduits, so long as Company uses due
diligence to timely obtain the authorization or permits.
j. Application. All of the provisions of this Chapter shall be applicable to all Cable
Operators, Cable Systems, OVS Operators and OVS Systems to the greatest extent permissible
under applicable law.
k_ Severability. If any provision of this Chapter is determined to be void or invalid by any
administrative or judicial tribunal, the provision shall be deemed severable and the invalidation
shall not invalidate the entirety of this Chapter or any other provision.
I. Possessory Interest. By accepting any PROW Permit granted pursuant to this Chapter,
Company acknowledges that notice is and was hereby given to Company pursuant to California
Revenue and Taxation Code Section 107.6 that the use or occupancy of any Public Property
may cause certain taxes to be levied upon such interest. Company shall be solely liable for, and
shall pay and discharge prior to delinquency, any and all possessory interest taxes or other
taxes levied against its right to possession, occupancy or use of any PROW or Public Property
pursuant to any right of possession, occupancy or use created by any PROW Permit.
Section 3: That if any section, subsection, sentence, clause or phrase of this Ordinance is
for any reason held to be invalid or unconstitutional, such decision shall not affect the validity or
constitutionality of the remaining portions of this Ordinance. The City Council hereby declares that
it would have passed this Ordinance and each section, subsection, clause or phrase hereof,
irrespective of the fact that anyone to more sections, subsections, sentences, clauses and phrases
be declared unconstitutional.
Section 4: The Mayor shall sign and the City Clerk shall attest to the passage of this
Ordinance. The City Clerk shall cause the same to be published once in the official newspaper
within fifteen (15) days after its adoption.
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Section 5. The City Clerk is directed to certify to the passage and adoption of this
Chapter and to cause it to be published or posted as required by law.
PASSED, APPROVED and ADOPTED this 25`h day of May, 2004.
ATTEST:
O -P �5y-
CITY CLERK
ilqc� 2
MAYOR
C,<iKORN�r
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STATE OF CALIFORNIA }
COUNTY OF ORANGE } ss.
CITY" OF NEWPORT BEACH }
I, LEILANI I. BROWN, Deputy City Clerk of the City of Newport Beach, California,
do hereby certify that the whole number of members of the City Council is seven; that the foregoing
ordinance, being Ordinance No. 2004 -8 was duly and regularly introduced before and adopted by the
City Council of said City at a regular meeting of said Council, duly and regularly held on the 25th
day of May 2004, and that the same was so passed and adopted by the following vote, to wit:
Ayes: Heffernan, Rosansky, Bromberg, Webb, Nichols, Mayor Ridgeway
Noes: None
Absent: Adams
Abstain: None
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the
official seal of said City this 26th day of May 2004. �(i� JKr--/
o� @� Deputy City Clerk
City of Newport Beach, California
(Seal) toa.N�r
CERTIFICATE OF PUBLICATION
STATE OF CALIFORNIA }
COUNTY OF ORANGE } ss.
CITY OF NEWPORT BEACH }
I, LAVONNE M. HARKLESS; City Clerk of the City of Newport Beach, California, do hereby
certify that Ordinance No. 2004 -8 has been duly and regularly published according to law and the
order of the City Council of said City and that same was so published in The Daily Pilot, a daily
newspaper of general circulation on the following date, to wit: May 29, 2004.
2004.
In witness whereof, I have hereunto subscribed my name this day of
City Clerk
City of Newport Beach, California
•i � Agenda Item��L�
January 13, 2004
ORDINANCE NO. 2003-
AN ORDINANCE OF THE CITY OF NEWPORT BEACH
EXTENDING NON - EXCLUSIVE FRANCHISES WITH ADELPHIA CABLE
COMMUNICATIONS AND WITH COX COMMUNICATIONS TO CONSTRUCT,
MAINTAIN, AND OPERATE COMMUNITY ANTENNA TELEVISION SYSTEMS
WITHIN THE CITY
THIS ORDINANCE is made with respect to the following:
RECITALS
WHEREAS, by approving Ordinance No. 1197 and its later amendments, the City of
Newport Beach entered into a cable television franchise agreement ( "Franchise
Agreement ") with Adelphia Cable Communications and its predecessor companies,
Comcast Cablevision, Newport Beach Cablevision Incorporated, and Warner
Brothers TV Service, Incorporated on or about December 7, 1966. The Franchise
Agreement will expire on January 27, 2004; and
WHEREAS, by approving Ordinance No. 1196 and its later amendments, the City of
Newport Beach entered into a cable television franchise agreement ( "Franchise
Agreement') with CoxCom, Incorporated (dba Cox Communications) and its
predecessor companies, Dimension Cablevision and Community Cablevision, on or
about December 6, 1966. The Franchise Agreement will expire on January 27, 2004;
and
WHEREAS, City and Adelphia and the City and CoxCom desire to extend each
respective Franchise Agreement for six (6) months to allow for additional time for
negotiations to consider the renewal of each Franchise Agreement.
NOW THEREFORE the City Council of the City of Newport Beach does ordain as
follows:
SECTION 1. Section 4 of Ordinance No. 1196 is hereby amended to read:
(a) This Franchise commenced January 27, 1967 and shall terminate on July 27,
2004.
SECTION 2. Section 4 of Ordinance No. 1197 is hereby amended to read:
(a) This Franchise commenced January 27, 1967 and shall terminate on July 27,
2004.
This Ordinance was introduced at a regular meeting of the City Council of the City of
Newport Beach held on the 9th Day of December 2003, and was adopted on the 13"'
day of January, 2004, by the following vote, to wit:
AYES, COUNCIL MEMBERS:
NOES, COUNCIL MEMBERS:
ABSENT, COUNCIL MEMBERS:
ATTEST:
LAVONNE HARKLESS, CITY CLERK
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FRANCHISE EXTENSION AGREEMENT
BETWEEN THE CITY OF NEWPORT BEACH
AND
ADELPHIA CABLE COMMUNICATIONS
This Franchise Extension Agreement is entered into between the City of Newport
Beach and Century-TCI California LP, dba Adelphia Cable Communications
( "Adelphia ") this _ day of , 2004, with regards to the following facts:
RECITALS
WHEREAS, by approving Ordinance No, 1197 and its later amendments, the City of
Newport Beach entered into a cable television franchise agreement ( "Franchise
Agreement') with Adelphia Cable Communications and its predecessor companies,
Comcast Cablevision, Newport Beach Cablevision Incorporated, and Warner
Brothers TV Service, Incorporated on or about December 7, 1966. The Franchise
Agreement will expire on January 27, 2004; and
WHEREAS, City and Adelphia desire to extend the Franchise Agreement for six
months to allow for additional time for negotiations to consider the renewal of the
Franchise Agreement
NOW THEREFORE, the Parties agree as follows:
1. The Franchise Agreement shall be extended to July 27, 2004. During said
extension, the terms and conditions of the current Franchise Agreement
shall remain in full force and effect without modification.
2. Both parties hereby reserve all rights under applicable provisions of the
Cable Communications Policy Act of 1984 (The "Cable Act "), including
without limitation Sections 626 and 635. Nothing herein shall be deemed or
construed as a waiver, release or surrender of any right that either party may
have under the Cable Act or any applicable law. Nothing herein shall waive,
release or otherwise resole the Operator, or any predecessor thereof, from
any Franchise Agreement breaches or violations, if any exist, or other
violations of law, if any, and the grant of this Franchise Agreement extension
shall not be utilized by the operator for any purpose other than to extend,
and document the extension, of the Franchise Agreement through January
27, 2005.
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IN WITNESS WHEREOF, the parties hereto have caused this franchise Extension
Agreement to be executed in duplicate on the date and year first written herein.
APPROVED AS TO FORM:
CITY OF NEWPORT BEACH
City Attorney
CITY OF NEWPORT BEACH: ADELPHIA CABLE COMMUNICATIONS:
TOD W. RIDGEWAY, Mayor
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FRANCHISE EXTENSION AGREEMENT
BETWEEN THE CITY OF NEWPORT BEACH
AND
COXCOMINCORPORATED
This Franchise Extension Agreement is entered into between the City of Newport
Beach and CoxCom, Incorporated, dba Cox Communications ( "Cox") this day
of 2004 with regards to the following facts:
RECITALS
WHEREAS, by approving Ordinance No. 1196 and its later amendments, the City of
Newport Beach entered into a cable television franchise agreement ( "Franchise
Agreement ") with CoxCom, Incorporated (dba Cox Communications) and its
predecessor companies, Dimension Cablevision and Community Cablevision, on or
about December 6, 1966. The Franchise Agreement will expire on January 27, 2004;
and
WHEREAS, City and Cox desire to extend the Franchise Agreement for six months
to allow for additional time for negotiations to consider the renewal of the Franchise
Agreement.
NOW THEREFORE, the Parties agree as follows:
1. The Franchise Agreement shall be extended to July 27, 2004. During said
extension, the terms and conditions of the current Franchise Agreement
shall remain in full force and effect without modification.
2. Both parties hereby reserve all rights under applicable provisions of the
Cable Communications Policy Act of 1984 (The "Cable Act'), including
without limitation Sections 626 and 635. Nothing herein shall be deemed or
construed as a waiver, release or surrender of any right that either party may
have under the Cable Act or any applicable law. Nothing herein shall waive,
release or otherwise resole the Operator, or any predecessor thereof, from
any Franchise Agreement breaches or violations, if any exist, or other
violations of law, if any, and the grant of this Franchise Agreement extension
shall not be utilized by the operator for any purpose other than to extend,
and document the extension, of the Franchise Agreement through January
27, 2005.
•
IN WITNESS WHEREOF, the parties hereto have caused this franchise Extension
Agreement to be executed in duplicate on the date and year first written herein.
APPROVED AS TO FORM:
CITY OF NEWPORT BEACH
City Attorney
CITY OF NEWPORT BEACH:
TOD W. RIDGEWAY, Mayor
COXCOM, INCORPORATED d /b /a/
COX COMMUNICATIONS
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CITY OF NEWPORT BEACH
CITY COUNCIL STAFF REPORT
Agenda Item No. a
December 9, 2003
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Dave Kiff, Assistant City Manager and Marilee Jackson, PIO
City Manager's Office
949- 644 -3002
dkiff @city.newport- beach.ca.us or mvjackson @city.newport- beach.ca.us
SUBJECT: Ordinance Extending Non- Exclusive Cable TV Franchises With
Adelphia and Cox Communications
ISSUE:
Should the cable TV franchise agreements with Adelphia & Cox be extended for one
year to accommodate the completion of the franchise renegotiation process?
RECOMMENDATION:
Introduce Ordinance No. 2003 - extending the current franchise agreements
with Cox and Adelphia until January 27, 2005; and
2. Pass to second reading on January 13, 2004.
DISCUSSION:
Background:
In the 1960s, when the City of Newport Beach entered into two separate franchise
agreements with companies that provide cable television service, cities across the
nation had a significant amount of-say in cable companies' operations, including:
• Rates and rate increases
• Customer service standards
• Channel selections and placement
1 -Year Extension of Cable Franchise Agreements
December 9, 2003
Page 2
Cities were able to dictate these aspects of cable companies' operations because the
cable companies used the public right -of -way to lay the cable "plant" (plant includes
coaxial cable, boxes in the rights -of -way, connections to homes, etc).
Federal law has changed significantly since the City adopted its franchise
agreements. The changes, in part, took away almost all of cities' regulatory abilities
relating to cable and moved them to the Federal Communications Commission
(www.fcc.gov). Today, several different laws, ordinances, and agreements direct our
decisions about cable television. These include:
• Three federal acts relating to Cable TV and Communications (1984 Cable Act,
1992 Cable Act, and 1996 Telecommunications Act);
• The NB Municipal Code (Chapter 5.44) and City Charter (Article XIII);
• Our Franchise Agreement with Adelphia Communications; and
• Our Franchise Agreement with Cox Community Cablevision.
The Effect of Changes in Law. It's important to remind the Council and Newport
Beach residents that:
FCC regulates the rates, not the cities. The FCC alone has the power to
regulate rates and channel selections, with the lone exception of rate regulation
on the basic service tier of channels (typically Channels 2 -13 and PEG
channels). Cities can only regulate basic tier rate increases if fully certified by
the FCC to do so. Cable customers should note that cable companies rarely, if
ever, raise the rates on this tier - much more frequent are rate increases on the
larger (and unregulated) broadcast basic tier (Channels 14 -65 and up).
Other tiers are generally unregulated. In March 1999, the FCC (generally)
deemed many cable systems subject to "effective competition" from satellite
dish services and removed almost all rate regulation from cable TV.
Cable TV in Newport is not literally a monopoly. Cities like Newport Beach
have non - exclusive franchise agreements. Any cable provider can come into
the city limits, negotiate a franchise agreement, lay new cable, and compete
directly with either Cox or Adelphia. Similarly, Cox can attempt to compete
directly with Adelphia and vice - versa. But doing so requires significant
investment in new cable infrastructure, because each cable company owns the
cable in the ground (and on poles). Very few companies anywhere in the nation
"overbuild" other systems.
• Denial of renewal is extremely difficult and expensive. Cities cannot
typically deny a cable provider an opportunity to renew an existing franchise
agreement. 0
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7 -.Year Extension of Cable Franchise Agreements
December 9, 2003
Page 3
Internet services are unregulated. Courts have ruled that the provision of
Internet service over cable is not a cable - related service and therefore not
subject to municipal regulation. Newport Beach can do very little to help cable
customers interact with their Internet Service Providers (ISPs).
Our Current Franchise Agreements. As noted, Newport Beach has a Cable TV
Ordinance and separate Franchise Agreements with Cox and Adelphia (see service
areas on map below). The Agreements have been extended several times:
ADELPHIA FRANCHISE AGREEMENT
• Agreement adopted December 1966 -15 -year term (to 1981).
• Amended December 1970 —term reset again to 15 years (to 1986).
• Amended April 1986 — term extended by five years (to 1991)
• Amended October 1991 — term extended to January 27, 2002.
• Amended December 11, 2001 -- term extended to January 27, 2003.
• Amended January 27, 2003 -- term extended to January 27, 2004.
COX FRANCHISE AGREEMENT
• Agreement adopted December 1966 —15 -year term (to 1981).
• Amended November 1981 — term extended for 10 years (to 1991).
• Amended October 1991 — term extended to January 27, 2002
• Amended December 11, 2001 -- term extended to January 27, 2003.
• • Amended January 27, 2003 -- term extended to January 27, 2004.
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1 -Year Extension of Cable Franchise Agreements
December 9, 2003
Page 4
Formation of Telecom Committee. With the franchise agreements about to expire,
in November 2000, the City Council formed the Telecommunications Ad Hoc
Committee and directed it to address the following issues:
1. UPDATING THE CABLE TELEVISION ORDINANCE. We believed that the
City's municipal code chapter that relates to cable television required significant
amendments before the City can enter into any effective franchise agreements
with Adelphia and Cox.
2. UPDATING THE MUNICIPAL CODE AND ENACTING A COUNCIL POLICY
RELATING TO WIRELESS TELECOM. We believed that the City should add a
new section to the municipal code relating to telecommunication to effectively
address:
• Where to site new wireless facilities;
• Whether and where to use City -owned property or rights -of -way for wireless
facilities;
• What design and structural standards the City should apply to antennas,
whether placed on rights -of -way or public or private property;
• What fee should be levied for the use of the public property for antennas;
• How to effectively ensure that the City's emergency radio network is not
adversely impacted by siting activity.
The Wireless Telecom Ordinance is now Chapter 15.70 of the NBMC. Council
Policy L -23 (The Siting of Wireless Telecommunications Equipment on City-
Owned Land) governs City actions relating to the use of City property for
wireless telecom.
FRANCHISE RENEWAL NEGOTIATIONS. Given the pending expiration of the
two cable television franchise agreements, the Committee was tasked with
performing a community needs assessment and bringing to Council a Statement
of Minimum Goals. The latter was accomplished in April 2003.
The Telecom Committee includes Council members John Heffernan (Chair) and
Richard Nichols and community members Leslie Daigle and Don Boortz.
About the Current Cable TV Ordinance and the Charter. The Municipal Code
(Chapter 5.44 -- Community Antenna Television) relating to cable television is outdated.
It was first adopted in 1966 and has had little change since then, even as:
• Federal and state telecommunications and cable law dramatically changed;
• Technology dramatically changed (digital TV, satellite TV, cable - carried Internet,
pay - per -view, digital cable radio, fiber optic lines, telephony over cable, etc);
• The city saw a series of providers transfer their Franchise Agreements from one to
another via consolidations and sales;
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1 -Year Extension of Cable Franchise Agreements
December 9, 2003
Page 5
• Adelphia filed for reorganization, 0
Currently, Chapter 5.44 of the NMBC and the City Charter speaks to the following
issues -- but please be aware that many have been pre - empted by changes in
federal law:
• Defines "gross annual receipts" as compensation resulting from the
operation of a cable TV system in Newport Beach, but not the franchise fee
imposed by the City. In other words, a cable company's calculation of the
5% franchise fee cannot include the line item on the bill that charges the
franchise fee itself.
Describes the process by which a cable company files a franchise
application with the City (along with a $1,000 franchise application fee).
• Directs the City to award a franchise with a term between 10 and 25 years.
To terminate a franchise prior to end -of -term, the City must find that a cable
company has "violated a material term or condition" of its franchise OR that
any part of Chapter 5.44 has become unenforceable and has materially
changed the franchise OR the City must acquire the cable TV system,
• Allows the City to inspect the cable company's records at any time. 0
• Empowers the City Manager to settle any controversy arising between the
cable company and the City or subscribers. "in the best interests of the
public."
• Directs the City Council to set a franchise fee that is a percentage of the
cable company's gross annual receipts (paid to the City quarterly).
• Describes the proper operation of the "Newport Beach Community Channel"
which must be cablecast on the same channel number on all cable systems
in the City (NOTE: This does not occur today -- Cox uses Channel 3 for
The channel number can be designated by mutual agreement between the
franchisees. The Channel must include live broadcasts of all regular
meetings of the City Council, at least one re- broadcast of the meetings, and
up to 20 hours of community affairs programs per month as designated by
the City Manager. When the Channel is not broadcasting local origination
material, the cable company can run advertising that "promotes primarily
persons maintaining an office within the city..," The company can collect a
fee for ads on the Community Channel.
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1 -Year Extension of Cable Franchise Agreements
December 9, 2003
Page 6
• Requires the cable company to keep a toll -free phone number in the City as
well as a service and billing office within the main franchise area. Any
subscriber complaint must be addressed within 24 hours via correcting the
problem or scheduling a service call within 48 hours.
• Allows the City Council to review and approve all rates and charges for cable
services "to the extent permitted by State or Federal statutes."
• Allows the City Council to determine which franchisee serves a newly
annexed area, unless the area contains a completed or commenced cable
TV system. In the latter case, the area must be served by the company
owning the system.
The City Charter's section on franchises (Article XIII) requires the City Council to
adopt franchises via ordinance and to hold a public hearing prior to granting a
franchise. It limits all franchise terms to 25 years or less if a determinate term is
stated. The Article allows indeterminate terms but specifies that the City may end the
franchise and possess the franchisee's property if the franchisee is out of compliance
with the franchise agreement (Section 1302).
Preparing a New Ordinance. Since at least Fall 2000, the City has retained William
Marticorena of Rutan and Tucker to assist us in our telecommunications work. Mr.
Marticorena has extensive experience in all phases of franchise renewals and
ordinance amendments. Additionally, upon recommendation of the Telecom
Committee, we hired Sue Buske of the Buske Group to conduct a statistically valid
Cable Needs Assessment (CNA) to determine the community's desires and concerns
regarding cable TV (for more information about the Assessment itself, see the
Agenda Item from April 8, 2003 whereby the City Council formally accepted the
Assessment).
The Assessment and the Statement of Minimum Goals will be used to negotiate a
new Franchise Agreement with each of the two cable providers. A Franchise
Agreement is distinct from a new Cable Communications Ordinance as follows:
The Ordinance reflects the regulatory environment and practices that any
cable provider must follow while doing business in the City.
• The Agreement(s)- reflects specific permission to a specific company to use
the public right -of -way to operate a cable system. Included in the permission
are negotiated terms by the company and the city as to adequate
compensation paid to the City and its residents for the use of the right -of -way:.
Adequate compensation may include the 5% franchise fee, dedication of
equipment, dedication of specific channels for Public, Educational, and
Government (PEG) services, and more.
1 -Year Extension of Cable Franchise Agreements
December 9, 2003
Page 7
We expect to bring the proposed new Cable Communications Franchises Ordinance
back to the Council in January 2004. When we brought this proposed Ordinance
before the Council in November 2003, Council Member Webb and the Adelphia
representatives both raised issues that deserved further discussion prior to any
adoption of new Ordinance.
Because the individual Franchise Agreements with Adelphia and Cox both expire on
January 27, 2004, we recommend that the Council agree to a one -year extension of
the current Agreements (to January 27, 2005). Despite the extension to January
2005, we hope to have the new Cable Communications Franchises Ordinance and
the new Franchise Agreements before the Council by mid -2004.
Environmental Review: This Agenda Item does not require environmental review.
Public Notice: This agenda item may be noticed according to the Ralph M. Brown
Act (72 hours in advance of the public meeting at which the City Council considers
the item).
Funding Availability: Not applicable.
Submitted by:
Da a Kiff Marilee Jackson
Assistant City Manager ` Public Information Officer
Attachments: Ordinance Amending Section 4 of Ordinance Nos. 1196 & 1197
Franchise Extension Agreement between City of Newport Beach & Adelphia
Franchise Extension Agreement between City of Newport Beach & Cox
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1 -Year Extension of Cable Franchise Agreements
December 9, 2003
Page 8
ORDINANCE NO. 2003-
AN ORDINANCE OF THE CITY OF NEWPORT BEACH
EXTENDING NON- EXCLUSIVE FRANCHISES WITH ADELPHIA CABLE
COMMUNICATIONS AND WITH COX COMMUNICATIONS TO CONSTRUCT,
MAINTAIN, AND OPERATE COMMUNITY ANTENNA TELEVISION SYSTEMS
WITHIN THE CITY
THIS ORDINANCE is made with respect to the following:
RECITALS
WHEREAS, by approving Ordinance No. 1197 and its later amendments, the City of
Newport Beach entered into a cable television franchise agreement ( "Franchise
Agreement ") with Adelphia Cable Communications and its predecessor companies,
Comcast Cablevision, Newport Beach Cablevision Incorporated, and Warner
Brothers TV Service, Incorporated on or about December 7, 1966. The Franchise
Agreement will expire on January 27, 2004; and
WHEREAS, by approving Ordinance No. 1196 and its later amendments, the City of
Newport Beach entered into a cable television franchise agreement ( "Franchise
Agreement') with CoxCom, Incorporated (dba Cox Communications) and its
predecessor companies, Dimension Cablevision and Community Cablevision, on or
about December 6, 1966. The Franchise Agreement will expire on January 27, 2004;
and
WHEREAS, City and Adelphia and the City and CoxCom desire to extend each
respective Franchise Agreement for one year to allow for additional time for
negotiations to consider the renewal of each Franchise Agreement.
NOW THEREFORE the City Council of the City of Newport Beach does ordain as
follows:
SECTION 1. Section 4 of Ordinance No. 1196 is hereby amended to read:
(a) This Franchise commenced January 27, 1967 and shall terminate on January
27, 2005.
SECTION 2. Section 4 of Ordinance No. 1197 is hereby amended to read:
(a) This Franchise commenced January 27, 1967 and shall terminate on January
27, 2005.
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1 -Year Extension of Cable Franchise Agreements
December 9, 2003
Page 9
This Ordinance was introduced at a regular meeting of the City Council of the City of
Newport Beach held on the 9th Day of December 2003, and was adopted on the 13th
day of January, 2004, by the following vote, to wit:
AYES, COUNCIL MEMBERS:
NOES, COUNCIL MEMBERS:
ABSENT, COUNCIL MEMBERS:
ATTEST:
CITY CLERK
MAYOR
Is
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1 -Year Extension of Cable Franchise Agreements
December 9, 2003
Page 10
FRANCHISE EXTENSION AGREEMENT
BETWEEN THE CITY OF NEWPORT BEACH
AND
ADELPHIA CABLE COMMUNICATIONS
This Franchise Extension Agreement is entered into between the City of Newport
Beach and Century-TCI California LP, dba Adelphia Cable Communications
("Adelphia') this_ day of , 2004, with regards to the following facts:
RECITALS
WHEREAS, by approving Ordinance No. 1197 and its later amendments, the City of
Newport Beach entered into a cable television franchise agreement ( "Franchise
Agreement") with Adelphia Cable Communications and its predecessor companies,
Comcast Cablevision, Newport Beach Cablevision Incorporated, and Warner
Brothers TV Service, Incorporated on or about December 7, 1966. The Franchise
Agreement will expire on January 27, 2004; and
WHEREAS, City and Adelphia desire to extend the Franchise Agreement for one
year to allow for additional time for negotiations to consider the renewal of the
Franchise Agreement.
NOW THEREFORE, the Parties agree as follows:
The Franchise Agreement shall be extended to January 27, 2005. During
said extension, the terms and conditions of the current Franchise Agreement
shall remain in full force and effect without modification.
Both parties hereby reserve all rights under applicable provisions of the
Cable Communications Policy Act of 1984 (The "Cable Act'), including
without limitation Sections 626 and 635. Nothing herein shall be deemed or
construed as a waiver, release or surrender of any right that either party may
have under the Cable Act or any applicable law. Nothing herein shall waive,
release or otherwise resole the Operator, or any predecessor thereof, from
any Franchise Agreement breaches or violations, if any exist, or other
violations of law, if any, and the grant of this Franchise Agreement extension .
shall not be utilized by the operator for any purpose other than to extend,
and document the extension, of the Franchise Agreement through January
27, 2005.
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1 -Year Extension of Cable Franchise Agreements
December 9, 2003
Page 11
0
IN WITNESS WHEREOF, the parties hereto have caused this franchise Extension
Agreement to be executed in duplicate on the date and year first written herein.
APPROVED AS TO FORM:
CITY OF NEWPORT BEACH
City Attorney
CITY OF NEWPORT BEACH: ADELPHIA CABLE COMMUNICATIONS:
Mayor
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1 -Year Extension of Cable Franchise Agreements
December 9, 2003
Page 12
FRANCHISE EXTENSION AGREEMENT
BETWEEN THE CITY OF NEWPORT BEACH
AND
COXCOM INCORPORATED
This Franchise Extension Agreement is entered into between the City of Newport
Beach and CoxCom, Incorporated, dba Cox Communications ( "Cox ") this _ day of
2004 with regards to the following facts:
RECITALS
WHEREAS, by approving Ordinance No. 1196 and its later amendments, the City of
Newport Beach entered into a cable television franchise agreement ( "Franchise
Agreement') with CoxCom, Incorporated (dba Cox Communications) and its
predecessor companies, Dimension Cablevision and Community Cablevision, on or
about December 6, 1966. The Franchise Agreement will expire on January 27, 2004;
and
WHEREAS, City and Cox desire to extend the Franchise Agreement for one year to
allow for additional time for negotiations to consider the renewal of the Franchise
Agreement,
NOW THEREFORE, the Parties agree as follows:
The Franchise Agreement shall be extended to January 27, 2005. During
said extension, the terms and conditions of the current Franchise Agreement
shall remain in full force and effect without modification.
2. Both parties hereby reserve all rights under applicable provisions of the
Cable Communications Policy Act of 1984 (The "Cable Act "), including
without limitation Sections 626 and 635. Nothing herein shall be deemed or
construed as a waiver, release or surrender of any right that either party may
have under the Cable Act or any applicable law. Nothing herein shall waive,
release or otherwise resole the Operator, or any predecessor thereof, from
any Franchise Agreement breaches or violations, if any exist, or other
violations of law, if any, and the grant of this Franchise Agreement extension
shall not be utilized by the operator for any purpose other than to extend, .
and document the extension, of the Franchise Agreement through January
27, 2005.
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1 -Year Extension of Cable Franchise Agreements
December 9, 2003
Page 13
IN WITNESS WHEREOF, the parties hereto have caused this franchise Extension
Agreement to be executed in duplicate on the date and year first written herein.
APPROVED AS TO FORM:
CITY OF NEWPORT BEACH
City Attorney
CITY OF NEWPORT BEACH:
Mayor
F:\users\cat\shared\daWg\AdelphiaFranchiseExt.doc
COXCOM, INCORPORATED d /b /a/
COX COMMUNICATIONS
1]
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ORDINANCE NO. 2003 -19
AN ORDINANCE OF THE CITY OF NEWPORT BEACH
EXTENDING NON- EXCLUSIVE FRANCHISES WITH ADELPHIA CABLE
COMMUNICATIONS AND WITH COX COMMUNICATIONS TO CONSTRUCT,
MAINTAIN, AND OPERATE COMMUNITY ANTENNA TELEVISION SYSTEMS WITHIN
THE CITY
THIS ORDINANCE is made with respect to the following:
RECITALS
WHEREAS, by approving Ordinance No. 1197 and its later amendments, the City of
Newport Beach entered into a cable television franchise agreement ( "Franchise
Agreement ") with Adelphia Cable Communications and its predecessor companies,
Comcast Cablevision, Newport Beach Cablevision Incorporated, and Warner Brothers
TV Service, Incorporated on or about December 7, 1966. The Franchise Agreement will
expire on January 27, 2004; and
WHEREAS, by approving Ordinance No. 1196 and its later amendments, the City of
Newport Beach entered into a cable television franchise agreement ( "Franchise
Agreement ") with CoxCom; Incorporated (dba Cox Communications) and its
predecessor companies, Dimension Cablevision and Community Cablevision, on or
about December 6, 1966. The Franchise Agreement will expire on January 27, 2004;
and
WHEREAS, City and Adelphia and the City and CoxCom desire to extend each
respective Franchise Agreement for six (6) months to allow for additional time for
negotiations to consider the renewal of each Franchise Agreement.
NOW THEREFORE the City Council of the City of Newport Beach does ordain as
follows:
SECTION 1. Section 4 of Ordinance No. 1196 is hereby amended to read:
(a) This Franchise commenced January 27, 1967 and shall terminate on July 27,
2004.
SECTION 2. Section 4 of Ordinance No. 1197 is hereby amended to read:
(a) This Franchise commenced January 27, 1967 and shall terminate on July 27,
2004.
a
•
This Ordinance was introduced at a regular meeting of the City Council of the City of
Newport Beach held on the 9th Day of December 2003, and was adopted on the 13th
day of January, 2004, by the following vote, to wit:
AYES', COUNCIL MEMBERS: Heffernan, Rosansky, Bromberg, Webb, Nichols,
Mayor
NOES, COUNCIL MEMBERS: None
ABSENT, COUNCIL MEMBERS': Adams
ATTEST:
CITY CLERK
MAYOR
t, k •
•
STATE OF CALIFORNIA }
COUNTY OF ORANGE
CITY OF NEWPORT BEACH }
I, LAVONNE M. HARKLESS, City Clerk of the City of Newport Beach, California, do
hereby certify that the whole number of members of the City Council is seven; that the foregoing
ordinance, being Ordinance No. 2003 -19 was duly and regularly introduced before and adopted by
the City Council of said City at a regular meeting of said Council, duly and regularly held on the
13th day of January 2004, and that the same was so passed and adopted by the following vote, to wit:
Ayes: Heffernan, Rosansky, Bromberg, Webb, Nichols, . Mayor Ridgeway
Noes: None
Absent: Adams
Abstain: None
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the
official seal of said City this 14th day of January 2004.
(Seal)
City Clerk
City of Newport Beach; California
CERTIFICATE OF PUBLICATION
STATE OF CALIFORNIA }
COUNTY OF ORANGE
CITY" OF NEWPORT BEACH }
1, LAVONNE M. HARIiLESS, City Clerk of the City of Newport Beach, California, do hereby
certify that Ordinance No. 2003 -19 has been duly and regularly published according to law and the
order of the City Council of said City and that same was so published in The Daily Pilot, a daily
newspaper of general circulation on the following date, to wit: January 17, 2004.
MUM
In witness whereof, I have hereunto subscribed my name this day of
City Clerk
City of Newport Beach; California
v.:DEC 0 9 ..2GU3
CITY OF NEWPORT BEACH _
CITY COUNCIL STAFF REPORT_,_,:_?'�� ^". °�??
I ►, i s, I i I
Agenda Item No. 8
December 9, 2003
Awe, d j, etc +c, ok
S� X
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Dave Kiff, Assistant City Manager and Marilee Jackson, PIO
City Manager's Office
949- 644 -3002
dkiff @city.newport - beach.ca.us or mvjackson @city.newport- beach.ca.us
SUBJECT: Ordinance Extending Non- Exclusive Cable TV Franchises With
Adelphia and Cox Communications
ISSUE:
Should the cable TV franchise agreements with Adelphia & Cox be extended for one
year to accommodate the completion of the franchise renegotiation process?
RECOMMENDATION:
1. Introduce Ordinance No. 2003 - extending the current franchise agreements
with Cox and Adelphia.until January 27, 2005; and
2. Pass to second reading on January 13, 2004.
DISCUSSION:
Background:
In the 1960s, when the City of Newport Beach entered into two separate franchise
agreements with companies that provide cable television service, cities across the
nation had a significant amount of say in cable companies' operations, including:
• Rates and rate increases
• Customer service standards
• Channel selections and placement
01 0
1 -Year Extension of Cable Franchise Agreements
December 9, 2003
Page 2
Cities were able to dictate these aspects of cable companies' operations because the
cable companies used the public right -of -way to lay the cable "plant" (plant includes
coaxial cable, boxes in the rights -of -way, connections to homes, etc).
Federal law has changed significantly since the City adopted its franchise
agreements. The changes, in part, took away almost all of cities' regulatory abilities
relating to cable and moved them to the Federal Communications Commission
(www.fcc.gov). Today, several different laws, ordinances, and agreements direct our
decisions about cable television. These include:
• Three federal acts relating to Cable TV and Communications (1984 Cable Act,
1992 Cable Act, and 1996 Telecommunications Act);
• The NB Municipal Code (Chapter 5.44) and City Charter (Article XI [I);
• Our Franchise Agreement with Adelphia Communications; and
• Our Franchise. Agreement with Cox Community Cablevision:
The Effect of Changes in Law. It's important to remind the Council and Newport
Beach residents that:
FCC regulates the rates, not the cities. The FCC alone has the power to
regulate rates and channel selections, with the lone exception of rate regulation
on the basic service tier of channels (typically Channels 2 -13 and PEG
channels). Cities can only regulate basic tier rate increases if fully certified by
the FCC to do so. Cable customers should note that cable companies rarely, if
ever, raise the rates on this tier - much more frequent are rate increases on the
larger (and unregulated) broadcast basic tier (Channels 14 -65 and up).
Other tiers are generally unregulated. In March 1999; the FCC (generally)
deemed many cable systems subject to "effective competition" from satellite
dish services and removed almost all rate regulation from cable TV.
• Cable TV in Newport is not literally a monopoly. Cities like Newport Beach
have non- exclusive franchise agreements. Any cable provider can come into
the city limits, negotiate a franchise agreement, lay new cable, and compete
directly with either Cox or Adelphia. Similarly, Cox can attempt to compete
directly with Adelphia and vice- versa. But doing so requires significant
investment in new cable infrastructure, because each cable company owns the
cable in the ground (and on poles). Very few companies anywhere in the nation
"overbuild" other systems.
Denial of renewal is extremely difficult and expensive. Cities cannot
typically deny a cable provider an opportunity to renew an existing franchise
agreement.
0
1 -Year Extension of Cable Franchise Agreements
December 9, 2003
Page 3
• Internet services are unregulated. Courts have ruled that the provision of
Internet service over cable is not a cable - related service and therefore not
subject to municipal regulation. Newport Beach can do very little to help cable
customers interact with their Internet Service Providers (ISPs).
Our Current Franchise Agreements. As noted, Newport Beach has a Cable N
Ordinance and separate Franchise Agreements with Cox and Adelphia (see service
areas on map below). The Agreements have been extended several times:
ADELPHIA FRANCHISE AGREEMENT
• Agreement adopted December 1966 — 15 -year term (to 1981).
• Amended December 1970 — term reset again to 15 years (to 1986).
• Amended April 1986 — term extended by five years (to 1991)
• Amended October 1991 — term extended to January 27, 2002.
• Amended December 11, 2001 --term extended to January 27, 2003.
• Amended January 27, 2003 -- term extended to January 27, 2004.
COX FRANCHISE AGREEMENT
• Agreement adopted December 1966 —15 -year term (to 1981).
• Amended November 1981 —term extended for 10 years (to 1991).
• Amended October 1991 — term extended to January 27, 2002
• Amended December 11, 2001 -- term extended to January 27, 2003.
• • Amended January 27, 2003 -- term extended to January 27, 2004.
L�
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1 -Year Extension of Cable Franchise Agreements
December 9, 2003
Page
Formation of Telecom Committee. With the franchise agreements about to expire,
in November 2000, the City Council formed the Telecommunications Ad Hoc
Committee and directed it to address the following issues:
1. UPDATING THE CABLE TELEVISION ORDINANCE. We believed that the
City's municipal code chapter that relates to cable television required significant
amendments before the City can enter into any effective franchise agreements
with Adelphia and Cox.
2. UPDATING THE MUNICIPAL CODE AND ENACTING A COUNCIL POLICY
RELATING TO WIRELESS TELECOM. We believed that the City should add
new section to the municipal code relating to telecommunication to effectively
address:
• Whereto site new wireless facilities;
• Whether and where to use City -owned property or rights -of -way for wireless
facilities;
• What design and structural standards the City should apply to antennas,
whether placed on rights -of -way or public or private property;
• What fee should be levied for the use of the public property for antennas;
• How to effectively ensure that the City's emergency radio network is not
adversely impacted by siting activity.
The Wireless Telecom Ordinance is now Chapter 15.70 of the NBMC. Council
Policy L -23 (The Siting of Wireless Telecommunications Equipment on City-
Owned Land) governs City actions relating to the use of City property for
wireless telecom.
3. FRANCHISE RENEWAL NEGOTIATIONS. Given the pending, expiration of the
two cable television franchise agreements, the Committee was tasked with
performing a community needs assessment and bringing to Council a Statement
of Minimum Goals. The latter was accomplished in April 2003.
The Telecom Committee includes Council members John Heffernan (Chair) and
Richard Nichols and community members Leslie Daigle and Don Boortz.
About the Current Cable TV Ordinance and the Charter. The Municipal Code
(Chapter 5.44 -- Community Antenna Television) relating to cable television is outdated.
It was first adopted in 1966 and has had little change since then, even as:
Federal and state telecommunications and cable law dramatically changed;
Technology dramatically changed (digital TV, satellite TV, cable- carried Internet,
pay- per -view, digital cable radio, fiber optic lines, telephony over cable, etc);
The city saw a series of providers transfer their Franchise Agreements from one to
another via consolidations and sales;
r
J
1 -Year Extension of Cable Franchise Agreements
December 9, 2003
Page 5
i Adelphia filed for reorganization.
Currently, Chapter 5.44 of the NMBC and the City Charter speaks to the following
issues -- but please be aware that many have been pre - empted by changes in
federal law:
• Defines "gross annual receipts" as compensation resulting from the
operation of a cable TV system in Newport Beach, but not the franchise fee
imposed by the City. In other words, a cable company's calculation of the
5% franchise fee cannot include the line item on the bill that charges the
franchise fee itself.
• Describes the process by which a cable company files a franchise
application with the City (along with a $1,000 franchise application fee).
• Directs the City to award a franchise with a term between 10 and 25 years.
To terminate a franchise prior to end -of -term, the City must find that a cable
company has "violated a material term or condition" of its franchise OR that
any part of Chapter 5.44 has become unenforceable and has materially
changed the franchise OR the City must acquire the cable TV system.
• Allows the City to inspect the cable company's records at any time.
• Empowers the City Manager to settle any controversy arising between the
cable company and the City or subscribers "in the best interests of the
public."
• Directs the City Council to set a franchise fee that is a percentage of the
cable company's gross annual receipts (paid to the City quarterly).
• Describes the proper operation of the "Newport Beach Community Channel"
which must be cablecast on the same channel number on all cable systems
in the City (NOTE: This does not occur today -- Cox uses Channel 3 for
The channel number can be designated by mutual agreement between the
franchisees. The Channel must include live broadcasts of all regular
meetings of the City Council, at least one re- broadcast of the meetings, and
up to 20 hours of community affairs programs per month as designated by
the City Manager. When the Channel is not broadcasting local origination
material, the cable company can run advertising that "promotes primarily
persons maintaining an office within the city..." The company can collect a
fee for ads on the Community Channel.
�n,
J
1 -Year Extension of Cable Franchise Agreements
December 9, 2003
Page 6
• Requires the cable company to keep a toll -free phone number in the City as
well as a service and billing office within the main franchise area. Any
subscriber complaint must be addressed within 24 hours via correcting the
problem or scheduling a service call within 48 hours.
• Allows the City Council to review and approve all rates and charges for cable
services "to the extent permitted by State or Federal statutes."
• Allows the City Council to determine which franchisee serves a newly
annexed area, unless the area contains a completed or commenced cable
TV system. In the latter case, the area must be served by the company
owning the system.
The City Charter's section on franchises (Article XIII) requires the City Council to
adopt franchises via ordinance and to hold a public hearing, prior to granting a
franchise. It limits all franchise terms to 25 years or less if a determinate term is
stated. The Article allows indeterminate terms but specifies that the City may end the
franchise and possess the franchisee's property if the franchisee is out of compliance
with the franchise agreement (Section 1302).
Preparing a New Ordinance. Since at least Fall 2000, the City has retained William
Marticorena of Rutan and Tucker to assist us in our telecommunications work. Mr.
Marticorena has extensive experience in all phases of franchise renewals and
ordinance amendments. Additionally, upon recommendation of the Telecom
Committee, we hired Sue Buske of the Buske Group to conduct a statistically valid
Cable Needs Assessment (CNA) to determine the community's desires and concerns
regarding cable TV (for more information about the Assessment itself, see the
Agenda Item from April 8, 2003 whereby the City Council formally accepted the
Assessment).
The Assessment and the Statement of Minimum Goals will be used to negotiate a
new Franchise Agreement with each of the two cable providers. A Franchise
Agreement is distinct from a new Cable Communications Ordinance as follows:
• The Ordinance reflects the regulatory environment and practices that any
cable provider must follow while doing business in the City.
• The Agreement(s) reflects specific permission to a specific company to use
the public right -of -way to operate a cable system. Included in the permission
are negotiated terms by the company and the city as to adequate
compensation paid to the City and its residents for the use of the right -of -way.
Adequate compensation may include the 5% franchise fee, dedication of
equipment, dedication of specific channels for Public, Educational, and
Government (PEG) services, and more.
T_/
1 -Year Extension of Cable Franchise Agreements
December 9, 2003
Page 7
We expect to bring the proposed new Cable Communications Franchises Ordinance
back to the Council in January 2004. When we brought this proposed Ordinance
before the Council in November 2003, Council Member Webb and the Adelphia
representatives both raised issues that deserved further discussion prior to any
adoption of a new Ordinance.
Because the individual Franchise Agreements with Adelphia and Cox both expire on
January 27, 2004, we recommend that the Council agree to a one -year extension of
the current Agreements (to January 27, 2005). Despite the extension to January
2005, we hope to have the new Cable Communications Franchises Ordinance and
the new Franchise Agreements before the Council by mid - 2004.
Environmental Review: This Agenda Item does not require environmental review.
Public Notice: This agenda 'item may be noticed according to the Ralph M. Brown
Act (72 hours in advance of the public meeting at which the City Council considers
the item).
Funding Availability: Not applicable.
Submitted by:
Dale Kiff Marilee Jackson
Assistant City Manager Public Information Offi er
Attachments: Ordinance Amending Section 4 of Ordinance Nos. 1196 & 1197
Franchise Extension Agreement between City of Newport Beach & Adelphia
Franchise Extension Agreement between City of Newport Beach & Cox
Y "'
r
9 -Year Extension of Cable Franchise Agreements
December 9, 2003
Page 8
ORDINANCE NO. 2003-
AN ORDINANCE OF THE CITY OF NEWPORT BEACH
EXTENDING NON- EXCLUSIVE FRANCHISES WITH ADELPHIA CABLE
COMMUNICATIONS AND WITH COX COMMUNICATIONS TO CONSTRUCT,
MAINTAIN, AND OPERATE COMMUNITY ANTENNA TELEVISION SYSTEMS
WITHIN THE CITY
THIS ORDINANCE is made with respect to the following:
RECITALS
WHEREAS, by approving Ordinance No. 1197 and its later amendments, the City of
Newport Beach entered into a cable television franchise agreement ( "Franchise
Agreement ") with Adelphia Cable Communications and its predecessor companies,
Comcast Cablevision, Newport Beach Cablevision Incorporated, and Warner
Brothers TV Service, Incorporated on or about December 7, 1966. The Franchise
Agreement will expire on January 27, 2004; and
WHEREAS, by approving Ordinance No. 1196 and its later amendments, the City of
Newport Beach entered into a cable television franchise agreement ( "Franchise
Agreement ") with CoxCom, Incorporated (dba Cox Communications) and its
predecessor companies, Dimension Cablevision and Community Cablevision, on or
about December 6, 1966. The Franchise Agreement will expire on January 27, 2004;
and
WHEREAS, City and Adelphia and the City and CoxCom desire to extend each
respective Franchise Agreement for one year to allow for additional time for
negotiations to consider the renewal of each Franchise Agreement.
NOW THEREFORE the City Council of the City of Newport Beach does ordain as
follows:
SECTION 1. Section 4 of Ordinance No. 1196 is hereby amended to read:
(a) This Franchise commenced January 27, 1967 and shall terminate on January
27, 2005.
SECTION 2. Section 4 of Ordinance No. 1197 is hereby amended to read:
(a) This Franchise commenced January 27, 1967 and shall terminate on January
27, 2005.
1 -Year Extension of Cable Franchise Agreements
December 9„ 2003
Page 9
This Ordinance was introduced at a regular meeting of the City Council of the City of
Newport Beach held on the 9t" Day of December 2003, and was adopted on the 13th
day of January, 2004, by the following vote, to wit:
AYES, COUNCIL MEMBERS:
NOES, COUNCIL MEMBERS:
ABSENT, COUNCIL MEMBERS:
ATTEST:
CITY CLERK
MAYOR
10
• r
1 -Year Extension of Cable Franchise Agreements
December 9, 2003
Page 10
FRANCHISE EXTENSION AGREEMENT
BETWEEN THE CITY OF NEWPORT BEACH
AND
ADELPHIA CABLE COMMUNICATIONS
This Franchise Extension Agreement is entered into between the City of Newport
Beach and Century-TCI California LP, dba Adelphia Cable Communications
( "Adelphia ") this_ day of , 2004, with regards to the following facts:
RECITALS
WHEREAS, by approving Ordinance No. 1197 and its later amendments, the City of
Newport Beach entered into a cable television franchise agreement ( "Franchise
Agreement ") with Adelphia Cable Communications and its predecessor companies,
Comcast Cablevision, Newport Beach Cablevision Incorporated, and Warner
Brothers TV Service, Incorporated on or about December 7, 1966. The Franchise
Agreement will expire on January 27, 2004; and
WHEREAS, City and Adelphia desire to extend the Franchise Agreement for one
year to allow for additional time for negotiations to consider the renewal of the
Franchise Agreement.
NOW THEREFORE, the Parties agree as follows:
1. The Franchise Agreement shall be extended to January 27, 2005. During
said extension, the terms and conditions of the current Franchise Agreement
shall remain in full force and effect without modification.
2. Both parties hereby reserve all rights under applicable provisions of the
Cable Communications Policy Act of 1984 (The "Cable Act"), including
without limitation Sections 626 and 635. Nothing herein shall be deemed or
construed as a waiver, release or surrender of any right that either party may
have under the Cable Act or any applicable law. Nothing herein shall waive,
release or otherwise resole the Operator, or any predecessor thereof, from
any Franchise Agreement breaches or violations, if any exist, or other
violations of law, if any, and the grant of this Franchise Agreement extension .
shall not be utilized by the operator for any purpose other than to extend,
and document the extension, of the Franchise Agreement through January
27, 2005.
® 0
1 -Year Extension of Cable Franchise Agreements
December 9, 2003
Page 11
IN WITNESS WHEREOF, the parties hereto have caused this franchise Extension
Agreement to be executed in duplicate on the date and year first written herein.
APPROVED AS TO FORM:
CITY OF NEWPORT BEACH
City Attorney
CITY OF NEWPORT BEACH: ADELPHIA CABLE COMMUNICATIONS:
Mayor
i1
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1 -Year Extension of Cable Franchise Agreements
December 9, 2003
Page 12'
FRANCHISE EXTENSION AGREEMENT
BETWEEN THE CITY OF NEWPORT BEACH
AND
COXCOM INCORPORATED
This Franchise Extension Agreement is entered into between the City of Newport
Beach and CoxCom, Incorporated, dba Cox Communications ( "Cox ") this _ day of
2004 with regards to the following facts:
RECITALS
WHEREAS, by approving Ordinance No. 1196 and its later amendments, the City of
Newport Beach entered into a cable television franchise agreement ( "Franchise
Agreement ") with CoxCom, Incorporated (dba Cox Communications) and its
predecessor companies, Dimension Cablevision and Community Cablevision, on or
about December 6, 1966. The Franchise Agreement will expire on January 27, 2004;
and
WHEREAS, City and Cox desire to extend the Franchise Agreement for one year to
allow for additional time for negotiations to consider the renewal of the Franchise
Agreement.
NOW THEREFORE, the Parties agree as follows:
The Franchise Agreement shall be extended to January 27, 2005. During
said extension, the terms and conditions of the current Franchise Agreement
shall remain in full force and effect without modification.
2. Both parties hereby reserve all rights under applicable provisions of the
Cable Communications Policy Act of 1984 (The "Cable Act "), including
without limitation Sections 626 and 635. Nothing herein shall be deemed or
construed as a waiver, release or surrender of any right that either party may
have under the Cable Act or any applicable law. Nothing herein shall waive,
release or otherwise resole the Operator, or any predecessor thereof, from
any Franchise Agreement breaches or violations, if any exist, or other
violations of law, if any, and the grant of this Franchise Agreement extension
shall not be utilized by the operator for any purpose other than to extend,
and document the extension, of the Franchise Agreement through January
27, 2005.
1
1 -Year Extension of Cable Franchise Agreements
December 9, 2003
Page 13
IN WITNESS WHEREOF, the parties hereto have caused this franchise Extension
Agreement to be executed in duplicate on the date and year first written herein.
APPROVED AS TO FORM:
CITY OF NEWPORT BEACH
City Attorney
CITY OF NEWPORT BEACH: COXCOM, INCORPORATED d /b /a/
COX COMMUNICATIONS
Mayor
F:\ users\ cat\ shared \da\Ag\AdelphiaFranchiseEM.doc
CITY OF NEWPORT BEACH
CITY COUNCIL STAFF REPORT
Agenda Item No. 15
November 12, 2003
TO: MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Robin L. Clauson, Assistant City Attorney
949- 644 -3131
rclauson(a)city: newport- beach.ca. us
Dave Kiff, Assistant City Manager
949- 644 -3002
dkiff(a)city. newport- beach.ca. us
Marilee Jackson, Public Information Officer
949- 644 -3031
mviackson (a)city.newport- beach.ca. us
d-
BY THE CITY COUNCIL
CITY OF NEWPORT BEACH
SUBJECT: Ordinance on Cable Communications Franchises (15f Reading)
ISSUE:
Should the City Council adopt a new ordinance relating to cable communications
franchises?
RECOMMENDATION:
1. Introduce Ordinance No. 2003 - relating to Cable Communications
Franchises; and
2. Pass to second reading on November 25, 2003.
DISCUSSION:
In the 1960s, when the City of Newport Beach entered into two separate franchise
agreements with companies that provide cable television service, cities across the
nation had a significant amount of say in cable companies' operations, including:
• Rates and rate increases
• Customer service standards
• Channel selections and placement
® Cable Communtions Franchise Ordinance
November 12, 2003
Page 2
Cities were able to dictate these aspects of cable companies' operations because the
cable companies used the public right -of -way to lay the cable "plant' (plant includes
coaxial cable, boxes in the rights -of -way, connections to homes, etc).
Federal law has changed significantly since the City adopted its franchise agreements.
The changes, in part, took away almost all of cities' regulatory abilities relating to cable
and moved them to the Federal Communications Commission (FCC or www.fcc.gov).
Today, several different laws, ordinances, and agreements direct our decisions about
cable television. These include:
• Three federal acts relating to Cable TV and Communications (1984 Cable Act,
1992 Cable Act, and 1996 Telecommunications Act);
• The Newport Beach Municipal Code (Chapter 5.44) and City Charter (Article XIII);
• Our Franchise Agreement with Adelphia Communications; and
Our Franchise Agreement with Cox Community Cablevision.
Attachment A contains a summary of the federal Acts.
The Effect of Changes in Law. It's important to remind the Council and Newport
Beach residents that:
FCC regulates rates, not cities. The FCC alone has the power to regulate rates
and channel selections, with the lone exception of rate regulation on the basic
service tier of channels (typically Channels 2 -13 and PEG channels). Cities can
only regulate basic tier rate increases if fully certified by the FCC to do so. Cable
customers should note that cable companies rarely, if ever, raise the rates on this
tier much more frequent are rate increases on the larger (and unregulated)
broadcast basic tier (Channels 14 -65 and up).
Other tiers are generally unregulated. In March 1999, the FCC (generally)
deemed many cable systems subject to "effective competition" from satellite dish
services and removed almost all rate regulation from cable TV.
Cable TV in Newport is not literally a monopoly. Cities like Newport Beach
have non- exclusive franchise agreements. Any cable provider can come into the
city limits, negotiate a franchise agreement, lay new cable, and compete directly
with either Cox or Adelphia. Similarly, Cox can attempt to compete directly with
Adelphia and vice - versa. But doing so requires significant investment in new
cable infrastructure, because each cable company owns the cable in the ground
(and on poles). Very flew companies anywhere in the nation "overbuild" other
systems.
Denial of renewal is extremely difficult and expensive. Cities cannot typically
deny a cable provider an opportunity to renew an existing franchise agreement.
Internet services are unregulated. Courts have ruled that the provision of
Internet service over cable is not a cable- related service and therefore not subject
to municipal regulation. Newport Beach can do very little to help cable customers
interact with their Internet Service Providers (ISPs).
Cable Communications Franchise Ordinance
November 12, 2003
Page 3
Our Current Franchise Agreements. As noted, Newport Beach has a Cable TV
Ordinance and separate Franchise Agreements with Cox and Adelphia, respectively.
The Agreements have been extended several times as follows:
ADELPHIA FRANCHISE AGREEMENT
• Agreement adopted December 1966 — 15 -year term (to 1981).
• Amended December 1970 — term reset again to 15 years (to 1986).
• Amended April 1986 — term extended by five years (to 1991)
• Amended October 1991 term extended to January 27, 2002.
• Amended December 11, 2001 -- term extended to January 27, 2003.
• Amended January 27, 2003 -- term extended to January 27, 2004.
Adelphia Service Area
Old Corona Del Mar
Cameo Shores /Highlands
Balboa Island
Balboa Peninsula
Harbor Island
Lido Isle
Linda Isle.
Newport Shores
West Newport
Newport Terrace
Newport Heights
Dover Shores
COX FRANCHISE AGREEMENT
Westcliff
Eastbluff
The Bluffs
Irvine Terrace
• Agreement adopted December 1966 — 15 -year term (to 1981).
• Amended November 1981 — term extended for 10 years (to 1991).
• Amended October 1991 — term extended to January 27, 2002
• Amended December 11, 2001 -- term extended to January 27, 2003.
• Amended January 27, 2003 -- term extended to January 27, 2004.
Current Cox' Service Area:
Newport Center
Harbor Ridge Harbor View Hills
Jasmine Creek
Spyglass Hill Newport Coast
Big Canyon
Betcourt Newport Ridge
Bonita Canyon
Bonita Creek
There are several areas of the City where the "primary franchise area" overlaps between Adelphia and Cox. These areas
include Newport . Dunes, the Coast side of Bayside Drive, Promontory Point, the Hyatt Newporter, Harbor Cove, the Park
Newport Apartments, Bayview Terrace and Court, and the John Wayne Airport Area.
• Cable Communions Franchise Ordinance
November 12, 2003
Page 4
Formation of Telecom Committee. With the franchise agreements about to expire, in
November 2000; the City Council formed the Telecommunications Ad Hoc Committee
and directed it to address the following, issues:
1. UPDATING THE CABLE TELEVISION ORDINANCE. We believed that the City's
municipal code chapter that relates to cable television required significant
amendments before the City can enter into any effective franchise agreements with
Adelphia and Cox.
2. UPDATING THE MUNICIPAL CODE AND ENACTING A COUNCIL POLICY
RELATING TO WIRELESS TELECOM. We believed that the City should add
new section to the municipal code relating to telecommunication to effectively
address:
• Where to site new wireless antennas;
• Whether and where to use City -owned property or rights -of -way for antennas;
• What design and structural standards the City should apply to antennas,
whether placed on rights -of -way or public or private property;
• What fee should be levied for the use of the public property for antennas;
• How to effectively ensure that the City's emergency radio network is not
adversely impacted by siting activity.
The Wireless Telecom Ordinance is now Chapter 15.70 of the NBMC. Council
Policy L -23 (The Siting of Wireless Telecommunications Equipment on City -Owned
Land) governs City actions relating to the use of City property for wireless telecom.
3. FRANCHISE RENEWAL NEGOTIATIONS. Given the pending expiration of the two
cable television franchise agreements, the Committee was tasked with performing a
community needs assessment and bringing to Council a Statement of Minimum
Goals. The latter was accomplished in April 2003.
The Telecom Committee includes Council members John Heffernan (Chair) and Richard
Nichols and community members Leslie Daigle and Don Boortz.
About the Current Cable TV Ordinance and the Charter. The Municipal Code (Chapter
5.44 -- Community Antenna Television) relating to cable television is outdated. It was first
adopted in 1966 and has had little change since then, even as:
• Federal and state telecommunications and cable law dramatically changed;
• Technology dramatically changed (digital TV, satellite TV, cable- carried Internet, pay -
per -view, digital cable radio, fiber optic lines, telephony over cable, etc);
• The city saw a series of providers transfer their Franchise Agreements from one to
another via consolidations and sales;
• Adelphia filed for reorganization.
• Cable Communications Franchise Ordinance
November 12, 2003
Page 5
Currently, Chapter 5,44 of the NMBC and the City Charter speaks to the following issues
- but please be aware that many have been pre - empted by changes in federal law:
• Defines "gross annual receipts" as compensation resulting from the operation of
a cable TV system in Newport Beach, but not the franchise fee imposed by the
City. In other words, a cable company's calculation of the 5% franchise fee
cannot include the line item on the bill that charges the franchise fee itself.
• Describes the process by which a cable company files a franchise application
with the City (along with a $1,000 franchise application fee).
• Directs the City to award a franchise with a term between 10 and 25 years. To
terminate a franchise prior to end -of -term, the City must find that a cable
company has "violated a material term or condition" of its franchise OR that any
part of Chapter 5.44 has become unenforceable and has materially changed the
franchise OR the City must acquire the cable TV system.
• Allows the City to inspect the cable company's records at any time.
• Empowers the City Manager to settle any controversy arising between the cable
company and the City or subscribers "in the best interests of the public."
• Directs the City Council to set a franchise fee that is a percentage of the cable
company's gross annual receipts (paid to the City quarterly).
• Describes the proper operation of the "Newport Beach Community Channel"
which must be cablecast on the same channel number on all cable systems in
the City (NOTE: This does not occur today -- Cox uses Channel 3 for system-
wide programming and places NB community programming on Channel 30.
Adelphia uses Channel 3 for NB community programming). The channel
number can be designated by mutual agreement between the franchisees. The
Channel must include live broadcasts of all regular meetings of the City Council,
at least one re- broadcast of the meetings, and up to 20 hours of community
affairs programs per month as designated by the City Manager. When the
Channel is not broadcasting local origination material, the cable company can
run advertising that "promotes primarily persons maintaining an office within the
city..." The company can collect a fee for ads on the Community Channel.
• Requires the cable company to keep a toll -free phone number in the City as well
as a service and billing office within the main franchise area. Any subscriber
complaint must be addressed within 24 hours via correcting the problem or
scheduling a service call within 48 hours.
• Allows the City Council to review and approve all rates and charges for cable
services "to the extent permitted by State or Federal statutes."
• Allows the City Council to determine which franchisee serves a newly annexed
area, unless the area contains a completed or commenced cable TV system. In
the latter case, the area must be served by the company owning the system.
Cable Communications Franchise Ordinance
November 12; 2003
Page 6
The City Charter's section on franchises (Article XIII) requires the City Council to adopt
franchises via ordinance and to hold a public hearing prior to granting a franchise. It
limits all franchise terms to 25 years or less if a determinate term is stated. The Article
allows indeterminate terms but specifies that the City may end the franchise and possess
the franchisee's property if the franchisee is out of compliance with the franchise
agreement (Section 1302).
Preparing a New Ordinance, Since at least Fall 2000, the City has retained William
Marticorena of Rutan and Tucker to assist us in our telecommunications work. Mr.
Marticorena has extensive experience in all phases of franchise renewals and ordinance
amendments. Additionally, upon recommendation of the Telecom Committee, we hired
Sue Buske of the Buske Group to conduct a statistically valid Cable Needs Assessment
(CNA) to determine the communitys desires and concerns regarding cable N (for more
information about the Assessment itself, see the Agenda Item from April 8, 2003
whereby the City Council formally accepted the Assessment).
The Assessment and the Statement of Minimum Goals will be used to negotiate a new
Franchise Agreement with each of the two cable providers. A Franchise Agreement is
separate and distinct from a new Cable Communications Ordinance as follows:
The Ordinance reflects the regulatory environment and practices that any cable
provider must follow while doing business in the City.
The Agreement(s) reflects specific permission to a specific company to use the
public right -of -way to operate a cable system. Included in the permission are
negotiated terms by the company and the city as to adequate compensation paid
to the City and its residents for the use of the right -of -way. Adequate
compensation may include the 5% franchise fee, dedication of equipment,
dedication of specific channels for Public, Educational, and Government (PEG)
services, and more.
More about the Proposed Cable Communications Franchises Ordinance. The
proposed ordinance addresses the following issues:
• Definitions. Sets forth and updates definitions used in the Cable
Communications industry.
• Authorization. Authorizes the City to grant non- exclusive franchises for cable
communications services.
• Rights. Reserves certain rights to the City and the cable subscriber; reserves
certain rights for the Franchisee;
• Finances. Explains how payments to the City are made in exchange for a cable
company's use of the public right -of -way; requires a performance bond
• Services. Explains the services that can be required of a provider;
• Construction.. Describes the construction standards that provider must meet;
• Customer Service.. Describes the customer service obligations of a provider.
• Records Inspection, Audit. Allows for the City's inspection of certain records,
allows for the conduct of a bi- annual audit;
Cable Communications Franchise Ordinance
November 12, 2003
Page 7
• Termination. Describes reasons for termination and process to terminate; and
• More.
Provider Review and Comment. The Telecom Committee itself has not been asked to
review the proposed Ordinance, in part because it is a fairly standard ordinance that
reflects what other cities -- including San Clemente, Lake Forest, Dana Point, San Juan
Capistrano, Laguna Beach, Laguna Niguel, and Moreno Valley (all under the counsel of
Mr. Marticorena and Rutan and Tucker) -- have adopted in recent months or are
preparing to adopt. Since the Council's adoption of the Statement of Minimum Goals in
April 2003, a staff team (Mr. Marticorena, Ms. Clauson, Ms. Jackson, and Mr. Kiff) have
met at least two times each with representatives (including counsel) of Adelphia and Cox.
We have provided both companies with an opportunity to review the draft Ordinance and
to discuss the Ordinance with us.
This Agenda Item asks the Council to review the proposed Cable Communications
Franchise Ordinance, to read it for the first time, and to pass it to second reading and
adoption (set tentatively for November 25, 2003). If the Council wishes, it may refer any
comments made by the cable providers about the Ordinance to the Telecom Committee
for review between now and November 25. Ordinances like this one take effect 30 days
following adoption.
What's Next. If the Council adopts this Ordinance, the staff team and the Telecom
Committee would enter the final phase of their efforts -- the negotiation of new Franchise
Agreements with Cox and Adelphia reflecting the Statement of Minimum Goals and the
newly - adopted Cable Communications Ordinance. We anticipate bringing the negotiated
Franchise Agreements to Council in Spring 2004. That timeline may require a short
extension to the existing agreements, given that they expire in January 2004.
Environmental Review: This Agenda Item does not require environmental review.
Public Notice: This agenda item may be noticed according to the Ralph M. Brown Act
(72 hours in advance of the public meeting at which the City Council considers the item).
Funding Availability: Not applicable.
Alternatives: Not applicable.
Submitted by
`1'1A ^ ' c� k S -_ �
Dave Kiff U V Robin Clauson Marilee Jackson-.-)
Assistant City Manager Assistant City Attorney Public Information Officer
Attachments: Attachment A -- FCC Authority
Cable Communications Franchise Ordinance
November 12, 2003
Page 8
Attachment B -- Proposed Ordinance on Cable Communications Franchises
Attachment C -- Letter from Adelphia
• Cable Communications Franchise Ordinance
November 12, 2003
Page 9
Attachment A
FEDERAL COMMUNICATIONS COMMISSION (FCC) AUTHORITY
P 1984 Cable Act. The Federal Communications Commission (FCC) established new
policies over cable TV via the Cable Communications Policy Act of 1984. Among
other things, the 1984 Act began to define the boundaries between federal, state, and
local governments. The 1984 Act requires cable companies to act under franchise
agreements and prohibits local governments from offering exclusive franchise
agreements. This Act also limited the cable franchise fee to 5% of the cable company's
gross annual revenue.
The 1984 Act also:
• Allowed local agencies to require that cable companies set aside channels for public,
educational, or governmental (PEG) use.
• Established "leased commercial access" allowances so that parties other than the cable
company could air video programming without cable company oversight.
• Placed restrictions on telephone companies that wanted to provide television service.
P 1992 Cable Act. In response to price hikes in the cable industry that far outpaced
inflation, Congress passed the Cable Television Consumer Protection and
Competition Act of 1992. The 1992 Act stated the FCC's hope that the market would
begin to regulate cable TV activities while still protecting consumer interests. Under the
1992 Act, local governments could select a cable franchisee and regulate in any areas
that the FCC did not pre -empt. Prior to 1992, local governments could regulate all rates
— but with the 1992 Act in place, the FCC took over rate regulation of the cable
programming tier (see below) and allowed cable companies to be completely exempt
from rate regulation if they could show that the cable companies were subject to
"effective competition" in a region.
In the 1992 Act, the FCC defines three tiers of cable services:
• the basic service tier (lower channels originating in the region which must be carried
by the cable company). Local governments may regulate rates associated with this tier
when certified by the FCC to do so.
• the cable programming service tier ( "CPST ") — this includes all non -basic channels
provided by a cable company but not sold on a pay- per -view basis. Effective March 31,
1999, the FCC has declared this tier of service subject to "effective competition "and
NO LONGER regulates rate changes to this tier.
• the per channel or per - program tier — provided as single channels for which the cable
company charges a separate rate. This tier is unregulated.
Per the 1992 Act, local governments must apply for certification with the Commission if
they want to regulate rates in the basic service tier. We can do so by submitting a "Form
328" to the FCC. The City has not asked the FCC to certify the City as a basic tier
rCable Communications Franchise Ordinance
November 12, 2003
Page 1'0
regulator. This is in part because cable companies rarely, if ever, increase their rates on
the basic tier since the development of the 1992 Act — in recent years, cable companies
have reduced and /or maintained their basic tier rates while increasing their CPST rates.
Another important aspect of the 1992 Act set customer service standards for cable
companies — all of which must be enforced by local franchise authorities. Pursuant to the
standards, cable companies must:
Phone and Billing Services
• Maintain a local phone line available 24 hours, seven days a week.
• Not use voice mail during working hours — a real person must answer the phone.
• Place its bill payment office in a convenient location. The office must be open at
least one night a week and /or some weekend hours.
• Answer all calls to the cable company office within 30 seconds of the time that a
connection is made.
Installations and Service Calls
• Complete a standard installation within seven days of a service call.
• Begin working on a service interruption call within 24 hours of notification.
• Offer specific appointment times or four -hour blocks of time for all service calls.
• Have installers call if they are running late to reschedule at the customer's
convenience'.
Rate or Service Changes
• Give 30 days advanced notice for all rate or service changes.
• Respond to billing complaints within 30 days.
P 1996 Telecom Act. Most recently, Congress amended the laws even further via the
adoption of the Telecommunications Act of 1996. The 1996 Act was an attempt to
accelerate private sector deployment of services to all residents by opening up all
telecom markets to competition, including allowing cable companies to provide phone
service and vice - versa.
The 1996 Act provided that the CPST would be subject to FCC regulation until March 31,
1999. The Act also prohibited individuals from sending complaints directly to the FCC —
instead, individuals must file complaints with the franchise authority (us) and we forward
one or more complaints to the FCC for review via an FCC "Form 329." Before sending a
complaint to the FCC, we must notify the cable company of the complaint and allow them
30 days to respond. We followed this process earlier this year in forwarding a rate
complaint by a resident.
The 1996 Act also:
• Requires television manufacturers to equip their TVs with a V -Chip.
• Requires broadcast and cable industry representative to develop voluntary rules
that rate programs for sexual or violent content.
Cable Communications Franchise Ordinance
November 12, 2003
Page 11
• Requires cable companies to fully scramble audio and video channels not
specifically subscribed by a household.
• Allowed some telephone companies to provide video programming via open video
systems (Pacific Bell Video Service ( "PBVS "] is an open video system that delivers
both local programming and national channels via a small dish or antenna). The
1996 Act exempted these systems from city franchise requirements.
• Limits local franchise authority fees to revenue derived from "cable services."
Cable Communications Franchise Ordinance
November 12, 2003
Page 12
Attachment B
ORDINANCE NO.
AN ORDINANCE OF THE CITY OF NEWPORT BEACH RELATING TO
FRANCHISES FOR CABLE COMMUNICATIONS SYSTEMS.
THE CITY COUNCIL OF NEWPORT BEACH DOES ORDAIN AS FOLLOWS:
Section 1. Chapter 5.44 of the Newport Beach Municipal Code entitled "Cable
Communications Franchises" is hereby added to read as follows:
Chapter 5.44
CABLE COMMUNICATIONS FRANCHISES
Sections:
Section 5.44.010
Title.
Section. 5.44.020
Definitions.
Section 5:44.030
Grant of Franchise.
Section 5.44.040
Rights_ Reserved to the Grantor.
Section 5.44.050
Rights of Subscribers.
Section 5.44.060
Finance.
Section 5.44.070
Services.
Section 5.44.080
Design and Construction.
Section 5.44.090
Operations And Maintenance.
Section 5.44.100
Violations.
Section 5.44.110
Termination and Related Rights.
Section 5.44.120
Franchise Applications.
Title.
This Ordinance is known and maybe cited as the "Cable Communications Franchises
Ordinance."
Definitions.
a. For the purposes of this Ordinance, the following words, terms, phrases, and their
derivations have the meanings given herein. Terms defined in the Cable Act shall have the
same meanings herein unless expressly defined otherwise. When not inconsistent with the
• Cable Communications Franchise Ordinance
November 12, 2003
Paged 3
context, words used in the present tense include the future tense, and words in the singular
number include the plural number.
"Administrative Officer" means the City Manager or the City Manager's designee.
"Affiliated Person" or "Affiliates" means each Person who falls into one or more of
the following categories: (i) each Person having, directly or indirectly, a Controlling Interest
in Grantee; (ii) each Person in which Grantee has, directly or indirectly, a Controlling Interest;
(iii) each officer, director, general partner, limited partner holding an interest of five percent
(5 %) or more, joint venturer, or joint venture partner in Grantee's Cable System in the City;
and (iv) each Person, directly or indirectly; controlling, controlled by, or under common
Control with Grantee; provided that "Affiliated Person" excludes the Grantor, any limited
partner holding an interest of less than five percent (5%) in a Grantee, or any creditor of
Grantee, solely by virtue of its status as a creditor, and which is not otherwise an Affiliated
Person by reason of owning a Controlling Interest in, being owned by, or being under
common ownership, common management, or common Control with Grantee.
"Basic Service or "Basic Cable Service" or "Basic Service Tier" means the lowest
Service Tier which includes the retransmission of local television Broadcast Signals and
Public, Educational, and Governmental Access Channels.
"Broadcast Signal" means a signal transmitted over the air to a geographically
dispersed public audience and received by a Cable System.
"1984 Cable Act" means the Cable Communications Policy Act of 1984.
"1992 Cable Act" means the Cable Television Subscriber Protection and Competition
Act of 1992.
"Cable Act" means the Cable Communications Policy Act of 1984, as amended by the
Cable Television Subscriber Protection and Competition Act of 1992 and by the
Telecommunications Act of 1996.
"Cable Operator" means any Person or group of Persons (i) who provides Cable
Service over a Cable System in the City and, directly or through one or more Affiliates, owns
a significant interest in that Cable System; or (ii) who otherwise controls or is responsible for,
through any arrangement, the management and operation of a Cable System in the City.
"Cable Service" or "Service" means (i) the one -way transmission to Subscribers of
video programming or other programming service; and (ii) subscriber interaction which is
required for the selection of or use of such video programming or such other programming
service.
"Cable System" or "Cable Communications System" or "System means a facility,
consisting of a set of closed transmission paths and associated signal generation reception, and
Cable Communica0
tions Franchise Ordinance
November 12, 2003
Page 14
control equipment that is designed to provide Cable Service, which includes video
programming, and which is provided to multiple Subscribers within the City; but this term
does not include: (i) a facility that serves only to retransmit the television signals of one or
more television broadcast stations; (ii) a facility that serves Subscribers without using any
public right -of -way; (iii) a facility of a common carrier which is subject, in whole or in part; to
the provisions of Title II of the Communications Act of 1934 (47 U.S.C. § 201 et seq.), except
that such facility shall be considered a Cable System (other than for purposes of section 621(c)
of the Cable Act) 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; (iv) an open video system that complies with section 653 of the Cable Act;
or (v) any facilities of any electric utility used solely for operating its electric utility systems.
"City" means the City of Newport Beach, California.
"Channel" means a portion of the electromagnetic frequency spectrum which is used
in a cable system and which is capable of delivering a television channel (as television
channel is defined by the FCC by regulation).
"Commercial Subscriber" means a Subscriber who receives a Cable Service in a place
other than a Residential Dwelling Unit.
"Complaint" means a dispute in which a Subscriber notifies Grantee of an outage or
degradation in picture quality; billing or other issue pertaining to the Subscriber's Cable
Service which is not corrected during the initial telephone or service call.
"Control" or "Controlling Interest" means actual working control in whatever manner
exercised, including, without limitation, working control through ownership, management,
debt instruments, or negative control, as the case may be, of the Cable System or a Grantee. A
rebuttable presumption of the existence of Control or a Controlling Interest shall arise from
the beneficial ownership, directly or indirectly; by any Person or group of Persons acting in
concert (other than underwriters during the period in which they are offering securities to the
public) of twenty-five percent (25 %) or more of any Person (which Person or group of
Persons is referred to as "Controlling Person"), or being a party to a management contract to
manage the system, or any material portion thereof, in lieu of Grantee.
"Converter" or "Terminal" means a device located at a Subscriber's premises that
converts signals from one frequency to another or otherwise processes signals for use by
Subscribers.
"Drop" means the cable connecting the Cable System's plant to equipment at the
Subscriber's premises.
"Education Channel" means any channel capacity where non - commercial educational
institutions are the primary designated Programmers.
® Gable Communications Franchise Ordinance
November 12, 2003
Page 15'
"Facilities" shall mean any equipment located, in whole or in part, in, above, or below
Streets, Public Rights -of -Way, or other public property used by the Grantor in its System
including without limitation, conduits, cables, cabinets, Nodes, structures, headend
equipment, receive only earthstations, down link equipment and antennas, electronics, fiber
cable; coaxial cable, drops and switching equipment.
"FCC" means the Federal Communications Commission or its designated
representatives.
"Franchise" means a written legal undertaking or action of the Grantor which
authorizes a specific Person to use the Grantor's streets and public ways for the purpose of
installing; operating, maintaining, or reconstructing a Cable System to provide Cable Service.
"Government Channel" means any channel capacity where local government agencies
are the primary designated Programmers, and programming is non - commercial informational
programming regarding government activities and programs.
"Grantee" means the Person granted a Franchise to install, operate, maintain, or
reconstruct a Cable System and the lawful successors, transferees, or assignees of that Person.
"Grantee Manager" means an employee of the Grantor who is designed by Grantor in
writing to Grantee to be the contact person for Grantee in accordance with the provisions of
this Ordinance.
"Grantor" means: the City, acting by and through its elected governing body, or such
representative as the governing body may designate to act on cable matters in its behalf.
"Gross Annual Revenue" or "Gross Annual Receipts" or "Gross Receipts" means all
revenue, as determined in accordance with Generally Accepted Accounting Principles, which
is received, directly or indirectly, by Grantee and by each Affiliated Person from or in
connection with the distribution of any Cable Service, and any other Service which may,
under now or then applicable federal law, be included in the Cable Act definition for the
purpose of calculating and collecting the maximum allowable franchise fee for operation of
the System, whether or not authorized by any Franchise, including, without limitation, leased
or access channel revenues and programming fees of any kind, received, directly or indirectly,
from or in connection with the distribution of any Cable Service. It is intended that all
revenue collected by the Grantee, and by each Affiliated Person, from the provision of Cable
Service over the System, whether or not authorized by the Franchise, be included in this
definition. Gross Annual Revenue also specifically includes: (i) the fair market value of any
nonmonetary (i.e., barter) transactions between Grantee and any Person, other than an
Affiliated Person, but not less than the customary prices paid in connection with equivalent
transactions; (ii) the fair market value of any nonmonetary (i.e., barter) transaction between
Grantee and any Affiliated Persons, but not less than the customary prices paid in connection
with equivalent transactions conducted with Persons who are not Affiliated Persons; (iii) any
revenues generated from the provision of Internet services and/or broadband services which
• Cable Communications Franchise Ordinance
November 12, 2003
Page 16
utilize the Cable System for delivery and must not be excluded pursuant to applicable law;
and (iv) any revenue received, as reasonably determined from time to time by the Grantor,
through any means which is intended to have the effect of avoiding the payment of
compensation that would otherwise be paid to the Grantor for the Franchise granted. Gross
Annual Revenue also includes any bad debts recovered. Gross Annual Revenue also includes
all (100 %) advertising revenue (without exclusions for any commissions, fees, or other costs
incurred in securing said revenue) which is received directly or indirectly by Grantee, any
Affiliated Person, or any other Person from or in connection with the distribution of any
Service over the System or the provision of any Service- related activity in connection with the
System, or allocable thereto based upon subscriber counts. Gross Annual Revenue does not
include: (i) the revenue of any Person to the extent that said revenue is also included in the
Gross Annual Revenue of Grantee; (ii) taxes imposed by law on Subscribers which Grantee is
obligated to collect; and (iii) amounts which must be excluded pursuant to applicable law.
"Nodes" shall mean the cabinet or housing and equipment, power supply, fans, gas
generators, batteries and optical to electrical converters, which is the point where fiber
facilities and coaxial facilities are connected.
"Pay Cable," "Pay Service," "Premium- Service" or "Pay Television" means
programming choices (such as movie channels, pay - per -view, video on demand) offered to
Subscribers on a per- Channel, per- program or per -event basis.
"Pedestal" shall mean an above-ground or below - ground enclosure which houses
active and /or passive electronic equipment used to serve Subscribers.
"PEG Channel" means collectively, the channel capacity dedicated to non- commercial
Public, Education or Government access programming.
"Person" means any corporation, partnership, proprietorship, individual, or
organization authorized to do business in the State of California.
"Plant" means the transmitting medium and related equipment which transmits signals
between the Headend and Subscribers, including Drops.
"Public Channel" or "Public Access Channel" means capacity where members of the
public are the primary designated Programmers, and programming is non- commercial
informational programming.
"Public Right-of-Way" means any public street, public way, public place or rights-of-
way, now laid out or dedicated, and the space on above or below it; and all extensions
thereof, and additions thereto, under the jurisdiction of Grantor.
"Resident" means any person residing in the Franchise Service Area, or as otherwise
defined by applicable law.
• Cable Communications Franchise Ordinance
November 12, 2003
Page 17
"Residential Dwelling Unit" or "Dwelling Unit" means a home, mobile home,
condominium, apartment, cooperative unit, and any other individual dwelling unit.
"Residential Subscriber" means a Subscriber who receives a Service in a Dwelling
Unit.
"Service Area" or "Franchise Service Area' means the entirety of the City of Newport
Beach, or as further defined in the Franchise.
"Service Interruption" means the loss of picture or sound on one or more cable
channels.
"Service Tier" or "Tier" means a category of Cable Service or other Services provided
by a Cable Operator and for which a separate rate is charged by the Cable Operator, other than
per channel or per event programming or legitimate packages of per channel or per event
programming.
"Streets and Public Ways" means the surface of, and the space above and below, any
public street, sidewalk, alley, or other public way or right -of -way of any type whatsoever.
"Subscriber" means any Person that lawfully subscribes to and receives, a Cable
Service provided by Grantee by means of or in connection with its Cable System.
"Tap" means the point of interconnection between that portion of the Cable System
located in the Public Rights -of -Way and a Drop.
"Telecommunications Act" means the Telecommunications Act of 1996.
"Unit" means a discrete place where System Services are used, such as a residence,
apartment, office, store, etc.
Terms Not Defined. Words, terms, or phrases not defined herein shall first have the
meaning as defined in the Cable Act, and then the special meanings or connotations used in
any industry, business, trade, or profession where they commonly carry such special
meanings. If those special meanings are not common, they will have the standard definitions
as set forth in commonly used and accepted dictionaries of the English language.
Grant of Franchise.
b. Authority to Grant Franchises. The Grantor may grant a Franchise to provide Cable
Service to any Person who offers to provide a System pursuant to this Ordinance.
c. Form. A Franchise may, at Grantor's sole option, take the form of an Ordinance,
license, permit, contract, resolution, or any other form elected by Grantor.
Cable Communications Franchise Ordinance
November 12, 2003
Page 18
d. Grants Not Required. Consistent with applicable state and federal law, no
provision of this Ordinance requires the granting of a Franchise when, in the opinion of the
Grantor; it is in the public interest not to do so.
e. Purpose. The purpose of a Franchise is to identify and authorize the operation of a
Cable Communications System by a specific Grantee, and to identify and specify those terms;
conditions; definitions, itemizations; specifications and other particulars of the agreement
between the Grantor and a Grantee. In so doing, a Franchise may clarify, extend, and interpret
the provisions of this Ordinance. Where a Franchise and this Ordinance conflict, both shall be
liberally interpreted to achieve a common meaning or requirement. In the event this is not
possible within reasonable limits, the Franchise shall prevail.
f Compliance with Law. Neither this Ordinance nor a Franchise granted under it
relieves a Grantee of any requirement of Grantor, or of any Ordinance, rule, regulation, or
specification of Grantor now or hereafter in effect pursuant to Grantor's police power,
including, but not limited to, the obtaining of a business license, and the payment of all permit
and inspection fees required from time to time by the Grantor.
g. Franchise Non - Exclusive. Grantor may, at its option, grant one or more Franchises
to construct, operate, maintain, and reconstruct a System. Said Franchises shall constitute
both a privilege and an obligation to provide the System and Cable Services required by this
Ordinance and the Franchise.
h. Duration. The term of any Franchise, and all rights, privileges, obligations and
restrictions pertaining thereto, shall be specified in the Franchise. The effective date of any
Franchise shall be as specified in the Franchise.
i. Use of Public Streets and Rights- of -Way. For the purposes of operating and
maintaining a System in the franchised Service Area, a Grantee may place • and maintain
within the public rights -of -way such property and equipment as conforms to the standards of
the City and as are necessary and appurtenant to the operation of the Cable Communications
System. Prior to construction or alteration of the Plant in public rights -of -way, a Grantee shall
apply for, pay all applicable fees, and receive all necessary permits as required by law.
j. Use of Other Utilities. Any Person who provides a System or Services as defined
herein shall be deemed a Grantee and must obtain a Franchise. If such Grantee uses
distribution channels furnished by any telephone company, other public utility, or any other
entity which are functionally equivalent to those used by a Cable Operator; said Grantee shall
be required to comply with all of the provisions of this Ordinance.
k. Restrictions Against Transfers. Neither the franchise nor any rights or obligations
of the Grantee in or pursuant to the franchise, or the System shall be transferred in part or as a
whole, by assignment, trust; mortgage, lease, sublease, pledge or other hypothecation, and
shall not be sold, transferred, ]eased, assigned, or disposed of in part or as a whole, either by
forced sale; merger, consolidation, or otherwise, nor shall title thereto, either legal or
Cable Communications Franchise Ordinance
November 12, 2003
Page 19
equitable, or any right or interest therein, pass to or vest in any Person, nor shall a transfer of
Control of the Grantee or the System occur, either by act of the Grantee, by operation of law
or otherwise, in each such case without the prior written consent of the Grantor, which
consent shall not be unreasonably withheld, and which shall be expressed by Resolution and
then only under such conditions as may be therein prescribed.
1. Effect of Unauthorized Action.
1. The taking of any action described in the foregoing Section (a) hereof
without the prior consent of the Grantor shall: (i) be deemed a material breach of Franchise;
and (ii) among other remedies available to the Grantor, be subject to a liquidated damages
assessment, which assessment shall be up to $5,000.00 a day until the taking of an action
described in the foregoing Section 0) is approved, or if not approved, until the prior
ownership, Control or other status quo ante is restored to a condition satisfactory to the
Grantor. The amount of such assessment shall be determined by the Grantor.
2. If the Grantor denies its consent to any such action and such action has
nevertheless been effected, the Council may revoke the Franchise unless the ownership of the
Franchise and/or System or Control of the Grantee, the System or the Franchise is promptly
restored to its status prior to such unauthorized action or to a status acceptable to the Grantor.
3. The grant or waiver of any one or more of such consents shall not render
unnecessary any subsequent consent or consents, nor shall the grant of any such consent
constitute a waiver of any other rights of the Grantor.
m. Additional Restrictions.
1. The Grantee shall not enter into any management contract or other
arrangement for the management of the System, or sell or otherwise transfer the System; or
any material portion thereof, with or without the Franchise, without the prior written consent
of the Grantor.
2. Any use by the Grantee of its own or an existing MATV; SMATV, NMS,
DBS, or other system in any structure located in the Service Area for the distribution of any
Service which would otherwise be distributed over the System, shall not relieve the Grantee of
its obligation to construct, operate, and maintain the System in said structure pursuant to this
Ordinance and applicable law.
n. Approval Procedure.
1. The Grantee' shall promptly notify the Grantor action or proposed action
requiring consent of the Grantor pursuant to this Section. The Grantee shall submit to the
Grantor an original and four copies, unless otherwise directed, of its petition on FCC Form
394, requesting such consent, which petition shall fully describe the action or proposed action
and clearly state the basis on which the petition should be approved. The petition shall also
Cable Communtions Franchise, Ordinance
November 12, 2003
Page 20
contain all reasonably appropriate documentation. The 120 -day period to review a transfer
request under Section 617 of the Cable Act shall not commence until all of the information
required by FCC Form 394, any applicable State law, the Franchise and this Ordinance is
submitted to the Grantor:
2. Name and address of the proposed transferee and identification of the
ownership and control of the transferee, including: the names and addresses of the ten (10)
largest holders of an ownership interest in the transferee and its cable affiliates and all persons
with twenty (20) percent or more ownership interest in the transferee and its cable system; the
Persons who Control the transferee; all officers and directors of transferee and its cable
affiliates; and any other Cable System ownership interest or each named Person;
3. A demonstration of the transferee's technical ability to construct, maintain,
upgrade and operate the System; including identification of key personnel.
4. A demonstration of the transferee's legal qualifications to construct,
maintain, upgrade and operate the System;
5. The transferee must show that it, as well as any person which Controls the
transferee, has not, at anytime during the ten (10) years preceding the submission of the
petition, been convicted of any act or omission of such character that the transferee cannot be
relied upon to deal truthfully with the Grantor and the Subscribers of the System, or to
substantially comply with its lawful obligations under applicable law;
6. The transferee must certify that no elected official of the Grantor holds an
interest, other than shares in a publicly traded company, in the transferee or an Affiliated
Person of the transferee;
7. Current financial statements showing the financial condition of the System
as of the date of the petition. If Grantee does not maintain financial records at the System
level, then the Grantee may provide such financial statements of the smallest reporting entity
which includes the System;
8. A statement prepared by a certified' public accountant or responsible official
of the transferee regarding the transferee's or assignee's financial ability to Construct,
upgrade, maintain and operate the System;
9. A description of the transferee's prior experience in Cable System
ownership, construction and operation and identification of communities in which the
transferee or assignee or entities under common Control with the transferee have a cable
franchise or license.
10. A description of the transferee's plans for meeting any System obligations
under the Franchise, including, but not limited to, any upgrade obligations, upgrade
• Cable Comm• ations Franchise Ordinance
November 12, 2003
Page 21
completion schedules, channel capacity requirements, technical design requirements, and
performance characteristics;
11. An affidavit or declaration of the transferee or authorized officer certifying
the truth and accuracy of the information in the petition or other written request,
acknowledging the enforceability of the commitments of the petition or other written request,
and certifying that the proposal meets all federal and state law requirements; and
12. A summary of the plans and commitments of the transferee to remedy
specific and known defaults and violations, if any, in the operation of the System under the
Franchise.
13. At any time during the review process, the Grantor reserves the right to
require additional supporting documentation from the Grantee or any other Person involved in
the action or proposed action. The Grantee shall provide all reasonably requested assistance to
the Grantor in connection with any such inquiry and, as appropriate, shall use its best efforts
to secure the cooperation and assistance of all other Persons involved in such action.
o. Conditions. As a condition to the granting of any consent required by this Section
3, the Grantor may require that the transferee execute an agreement, in a form and containing
such reasonable conditions as maybe required by the Grantor, specifying that said transferee
assumes and agrees to be bound by all applicable provisions of the Franchise. The execution
of said agreement by the transferee shall in no way relieve the Grantee, or any other transferor
involved in any such action, of its obligations pursuant to the Franchise during its tenure as
the franchisee up to and including the date of execution of such Agreement without the
consent of the Grantor.
p. Reimbursement of Processing and Review Costs. To the extent not prohibited by
applicable law, Grantee shall reimburse Grantor for Grantor's reasonable processing and
review expenses in connection with a transfer of the Franchise or a change in Control of the
Franchise, including without limitation, costs of administrative review, financial, legal, and
technical evaluation of the proposed transferee, costs of consultants (including technical and
legal experts), notice and publication costs, and document preparation expenses. A reasonable
deposit in an amount determined by the City may be required by the City. In addition, prior to
any transfer or change in Control, Grantee shall reimburse Grantor for all of Grantor's
expenses in connection with evaluating or negotiating a renewal of Grantee's franchise,
whether or not said renewal was ever finalized or granted. Grantor may send Grantee an
itemized description of all such charges, and Grantee shall pay such amount within thirty (30)
days after the receipt of such description.
Rights Reserved to the Grantor.
q. Reservation. The grant of the Franchise does not limit the rights of Grantor under
state law with respect to its power of eminent domain.
Cable Communica0
tions Franchise Ordinance
November 12, 2003
Page 22
r. Non - waiver or Bar. Neither the granting of any Franchise; nor any provisions of
this Ordinance, shall constitute or be construed as a waiver or bar to the exercise of any
governmental right or power by Grantor.
s. Delegation of Powers. Any right or power in, or duty retained by or imposed upon
Grantor, or any commission, officer, employee, department, or board of Grantor, may be
delegated by Grantor to any officer, employee, department or board of Grantor, or to such
other person or entity as Grantor may designate to act on its behalf.
t. Right of Inspection of Construction. The Grantor shall have the right to inspect and
approve all construction, installation, or other physical work performed by Grantee in the
Public Rights -of -Way and on private property consistent with its generally applicable building
codes, so long as said inspection and testing does not unreasonably interfere' with Grantee's
operations.
u. Right to Require Removal of Property. Consistent with applicable law, upon the
lawful revocation, expiration, or termination of the Franchise, the Grantor shall have the right
to require a Grantee to remove; at Grantee's expense; all portions of its System and any other
property from all streets and public rights -of -way within the Franchise Service Area within a
reasonable period of time.
v. Right of Intervention. The Grantor shall have the right of intervention in any suit,
proceeding or other judicial or administrative proceeding in which the Grantor has any
material interest, and to which a Grantee is party.
w. Place of Inspection. The Grantor shall have the right to inspect Grantee's local
premises, and to request copies of all relevant information that is reasonably necessary for the
exercise of Grantor's regulatory authority, upon reasonable; notice at any time during normal
business hours. Any Grantee records kept at another place shall, within twenty (20) days of
Grantor's request; be made available at Grantee's local premises within the County of Orange
for Grantor's inspection and copying. All reports and records required pursuant to this
Ordinance shall be furnished at the sole expense of Grantee, except as otherwise provided in
this Ordinance or the Franchise.
Rights of Subscribers.
x. Discriminatory Practices Prohibited. A Grantee shall not deny Cable Service or
otherwise discriminate against Subscribers or others on the basis of race, color, religion,
national origin, sex, age, handicap, or other protected classes.
y. Tapping and Monitoring. A Grantee shall not tap or monitor, or permit any other
person controlled by Grantee to tap or monitor, any cable, line; signal input device; or
subscriber outlet or receiver, to collect personally identifiable information (as defined in
Section 631 of the Cable Act) concerning any Subscriber whatsoever without the prior written
consent of the Subscriber or a court order therefor; provided, however, that a Grantee may
• Cable Communications Franchise Ordinance
November 12 2003
Page 23
monitor customer service calls for quality control purposes and may conduct system -wide or
individually addressed "sweeps" for the purpose of verifying system integrity, monitoring
signal levels, or checking for unauthorized connections to the Cable System, service levels, or
billing- for -pay services.
z. Data Collection.
1. Except for its own use, or in connection with the provision of Cable
Services or for release of data to the Grantor, the Grantee shall not permit its system to be
used for data collection purposes, nor shall it otherwise collect data which would reveal the
commercial product or other preferences or opinions of an individual Subscriber; members of
their families, or their guests, licensees or employees, unless the Grantee shall have received
the prior written consent of such Subscriber.
2. In any event, the Grantee shall not disclose or permit the release or sale of
data on individual Subscribers or groups thereof, but may disclose or permit the release or sale
of aggregate data only.
3. Disclosure of Subscriber Lists. The Grantee shall not disclose, or sell, or
permit the disclosure or sale of its subscriber list without the prior written consent of each
Subscriber on such list; provided that Grantee may use its subscriber list as necessary for the
construction, marketing, and maintenance of the Grantee's services and facilities authorized
by a Franchise, and the billing of Subscribers for Cable Services; and provided further, that
consistent with applicable law, Grantor may use Grantee's subscriber list for the purpose of
communication with Subscribers in connection with matters relating to the operation,
management, and maintenance of the Cable System and for the audit of financial and other
obligations pursuant to this ordinance, any franchise, or other applicable law.
4. Grantee shall not disclose 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 the prior written consent
of the Subscriber.
aa. Terms of Subscriber Consent.
l: Any 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 the Subscriber.
2. The Grantee shall not condition the delivery or receipt of Cable Services to
any Subscriber on any such consent.
3. A Subscriber may at any time revoke, without penalty or cost, any consent
previously given by delivering to the Grantee in writing a statement of the Subscriber's intent
to so revoke.
• Cable Communications Franchise Ordinance
November 12, 2003
Page 24
bb. Other Persons Affected. The prohibitions contained in paragraphs (a) through (d),
inclusive; of this Section 5.44.050 apply to Grantee, as well as to all of the following:
1. Officers, directors, employees, agents; and general and limited partners of
the Grantee;
2. Any person or combination of persons owning, holding, or controlling any
corporate stock or other ownership interests in the Grantee;
3. Any affiliated or subsidiary entity owned or controlled by 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 any corporate stock or other ownership interests; and
4. Any person, firm, or corporation acting or serving in the capacity of a
holding or controlling company of the Grantee.
cc. Subscriber Bill of Rights. Grantee shall provide to all Subscribers, at the time of
initial connection and annually thereafter, a notice in a form previously approved by Grantor
(which approval shall not be unreasonably withheld) describing, in understandable language,
the Subscriber's rights and obligations that are generally provided under the Franchise and
federal law, including a description of how to contact the Grantee and, if necessary, the
Grantor, in the event of an unresolved Subscriber complaint.
dd. Notice to New Subscribers. Before providing Cable Service to any Subscriber,
Grantee shall provide a written notice to the Subscriber containing substantially the following
information:
"Subscriber understands that Company uses public rights -of -way and other
facilities of the City of Newport Beach in providing service and that this
continued use cannot be guaranteed. Subscriber agrees not to make any claims
against the City of Newport Beach or its officers or employees in the event that
such use is denied for any reason, and Company is unable, in its discretion; to
provide service over alternate routes."
Finance.
cc. Payments to the Grantor.
1. As compensation for any Franchise to be granted, and in consideration of
permission to use the Grantor's streets and public rights -of -way for the construction,
operation, maintenance, and reconstruction of a System, the Grantee shall pay to the Grantor
the amounts specified in the Franchise.
Cable Communications Franchise Ordinance
November 12; 2003
Page 25
2. Payments due the Grantor shall be computed quarterly, and shall be paid
within forty-five (45) days after the close of each calendar quarter. The payment shall be
accompanied by a report showing the basis for the computation and such other relevant facts
as may be required by the Grantor to determine the accuracy of the payment. A final annual
reconciliation, and payment if any, shall be delivered to Grantor by Grantee within ninety (90)
days after the end of each calendar year.
3. If any franchise payment or recomputed amount is not made on or before
the dates specified above in subsection 2, Grantee shall pay as additional compensation the
greater of the following:
(a) An interest charge; computed from the applicable due date', at an
annual rate equal to the prevailing commercial prime interest rate in effect upon the due date,
plus one percent (1 %).
(b) A sum of money equal to $5,000 for each month, or part thereof, of
delay, which sum shall also bear interest from the due date at an annual rate equal to the
prevailing commercial prime interest rate in effect upon the due date, plus one percent (1 %).
4. In addition to any late payment made pursuant to subsection 3 above, if a
payment is late by sixty (60) days or more, Grantee shall pay a sum of money equal to five
percent (5 %) of the amount due in order to defray additional expenses and costs incurred by
Grantor as a result of such delinquent payment.
5. No acceptance of any payment shall be construed as a release of, or an
accord, or satisfaction of, any claim that the Grantor might have for further or additional sums
payable under the terns of this Ordinance; or for any other performance by Grantee of an
obligation hereunder.
6. Payments of compensation made by a Grantee to the Grantor pursuant to the
provisions of this Ordinance are in addition to, and exclusive of, any and all authorized taxes,
business license fees, and other fees, levies; or assessments now in effect, or subsequently
adopted in accordance with state and federal law.
ff. Security Fund.
1. Except as provided in the Franchise, within thirty (30) days after the
effective date of the Franchise, a Grantee shall deposit into a bank account established by a
Grantee, for the benefit of Grantor, and shall maintain on deposit through the term of the
Franchise, a sum specified in the Franchise as security for the faithful performance by Grantee
of all of the provisions of the Franchise, and compliance with this Ordinance and with all
orders, permits and directions of the Grantor, or any designated representative of the Grantor
having jurisdiction over Grantee's acts or defaults under the Franchise or this Ordinance, and
as security for the payment by a Grantee of any claims, fees, liens, or taxes due the Grantor
which arise by reason of the construction, operation, maintenance or reconstruction of the
Cable Communications Franchise Ordinance
November 12, 2003
Page 26
System pursuant to the Franchise or this Ordinance, and to satisfy any actual or liquidated
damages arising out of a Franchise breach.
2. Except as otherwise provided in the Franchise, if a Grantee fails, after
twenty (20) days written notice, to pay to the Grantor any fees that are due and unpaid, or fails
to repay within such twenty (20) days, any damages, costs or expenses which the Grantor is
compelled to pay by reason of any act or default of grantee in connection with its Franchise; or
if Grantee fails to comply with any provision of the Franchise or this Ordinance and the
Grantor determines that such failure was without just cause and, in a manner consistent with
the procedures specified in this Ordinance, Grantor reasonably determines it can be remedied
by a withdrawal from the security fund or is nevertheless subject to liquidated damages, then,
in any such event, the Grantor may immediately withdraw the amount thereof from the
security fund, with interest and any liquidated damages. Upon such withdrawal, the Grantor
shall notify a Grantee of the amount and the date of withdrawal.
3. Within thirty (30) days after notice to Grantee that any amount has been
withdrawn by Grantor from the security fund, a Grantee shall deposit a sum of money
sufficient to restore such security fund to the original amount.
4. Grantee shall be entitled to the return of the security fund, or portion
thereof, with interest, that remains on deposit at the expiration or termination of the Franchise,
once all amounts due to the Grantor have been paid. Grantee shall also retain its right to
challenge any withdrawal from such security fund.
5. The rights reserved to the Grantor with respect to the security fund are in
addition to all other rights of the Grantor, and no action, proceeding or exercise of a right with
respect to such security fund shall affect any other right the Grantor may have.
gg. Faithful Performance Bond. Except as provided in the Franchise, within thirty
(30) days after the effective date of the Franchise, a Grantee shall furnish proof of the posting
of a faithful performance bond in favor of the Grantor, with corporate surety approved by the
Grantor in the sum specified in the Franchise and conditioned that a Grantee shall well and
truly observe; fulfill, and perform each term and condition of the Franchise; provided,
however, that such bond shall not be required after certification by Grantor of the completion
of construction of Grantee's Cable System. The corporate surety must be authorized to issue
such bonds in the State of California, and the bond must be obtained and secured through an
authorized agent in the County of Orange. During the course of construction, the amount of
the bond may from time to time be reduced, as provided in the Franchise. Written evidence of
payment of premiums shall be filed with the Grantor.
hh. Letter of Credit.
1. As required by the Franchise, a Grantee shall post an irrevocable letter of
credit, issued by a bank approved by the Grantor, in the amount specified in the Franchise.
Said letter of credit shall incorporate wording approved by the Grantor enabling it to draw
Cable Communications Franchise Ordinance
November 12, 2003
Page 27
from time to time such funds as the Grantor may determine to be necessary to satisfy any
material defaults of Grantee or to make any payments due Grantor under or in connection with
this Ordinance or Grantee's Franchise, upon not more than ten (10) days written notice to the
issuer of the letter of credit with a copy by certified mail to the Grantee. Said letter of credit
shall further provide for sixty (60) days written notice by certified mail from its issuer to
Grantor of any pending expiration or cancellation, and said notice shall without further cause
constitute reason for the Grantor to draw the full sum to be held in its own accounts until such
letter of credit is reestablished in a form satisfactory to Grantor.
2. If Grantor requires such a letter of credit, Grantee shall pay all fees or other
charges required to keep it in force and shall, within thirty (30) days of any draw by Grantor,
restore its face value to the original amount.
3. All provisions herein applicable to bonds or security funds shall also apply
to letters of credit.
Services.
ii. Services to be Provided. A Cable System shall provide, as a minimum, the broad
programming categories specified in the Franchise.
J. Changes in Services. Grantee shall inform Grantor and its Subscribers at least
thirty (30) days in advance of making any changes in rates, programming services or channel
position in the System.
kk. Non- discrimination. Grantee shall not discriminate between or among
Subscribers within one type or class in the availability of services, at either standard or
differential rates according to published rate schedules, except as otherwise authorized by law.
No charges may be made for services except as listed in published schedules which are
available for inspection by anyone at Grantee's office, quoted by Grantee on the telephone,
and displayed or communicated to all potential Subscribers.
11. Prepayment. Grantee may not charge Subscribers for services more than one (1)
month in advance unless an individual Subscriber requests a longer period. Bills may be due
and payable upon mailing but shall not be delinquent, and no late charge penalties shall be
assessed, except as provided in state law. All bills and billing statements shall clearly indicate
the billing period, and the actual due date.
mm. Disconnect for Cause. Grantee may disconnect a Subscriber only for cause,
which shall include, without limitation, the following:
1 Payment delinquency in excess of forty -five (45) days.
2. Willful or negligent damage to or misappropriation of Grantee's property.
service.
Cable Communications Franchise Ordinance
November 12, 2003
Page 28
3. Monitoring, tapping, or tampering with Grantee's system, signals, or
4. Threats of violence to Grantee's employees or property.
on. Reconnection. Grantee shall, upon Subscriber's written request, reconnect service
that has been disconnected for payment delinquency when payment has removed the
delinquency. If authorized by applicable law, a published standard charge may be made for
reconnection. Grantee shall not be required to make more than three (3) reconnections for the
same subscriber if the disconnections involved were caused by payment delinquency within
any previous twenty-four (24) month period. Reconnection for disconnects covered by
Section 5.44.070(e)(2), (3), and (4) shall be at Grantee's sole discretion.
oo. Installations.
1. Grantee shall promptly provide and maintain service as specified in the
Franchise to the residential, commercial; and industrial structures in the Franchise Service
Area, as defined in the Franchise, upon request of the lawful occupant or owner.
2. Where a new Drop is required to provide service, Grantee shall advise each
Subscriber that the Subscriber has the right to require that installation be done over any route
on the Subscriber's property, and in any manner the Subscriber may elect which is technically
feasible and consistent with proper construction practices. If the Subscriber requests
installation other than a standard installation, then the Subscriber may be required to pay the
fee required in subparagraph (h) below related to Non - standard Installations.
3. For purposes of this paragraph, a standard installation shall include
installation of drop cable with fittings up to one hundred and fifty feet (150) feet from the
CATV distribution system measured along the cable from the center line of the street or utility
easement through the house wall or, at the Subscriber's option, through the floor from a house
vent or crawl space directly to the Subscriber's television set with five feet of cable from the
wall or floor entry to the TV set. Also included as part of a standard installation is the
grounding cable, fine tuning of the television set in order to insure the reception of Cable
Service, and the provision by the Grantee of the appropriate literature and information.
4. After Cable Service has been established by activating trunk or distribution
cables for any area, Grantee shall provide Cable Service to any person requesting Cable
Service in that area within nine (9) calendar days from the date of request, provided that the
Grantee is able to secure all access rights necessary to extend service to that potential
Subscriber within that nine (9) day period on reasonable terms and conditions.
pp. Non - Standard Installations, For each non - standard installation, a Grantee may
charge the Subscriber for the cost of material and labor in excess of that required for a
Standard Installation. Grantee shall provide each Subscriber a written estimate of all charges
• Cable Communications Franchise Ordinance
November 12, 2003
Page 29
for a non - standard installation prior to installation and obtain Subscriber's written
authorization in advance for all nonstandard installation charges.
qq. Converters/Terminals. At such time as a converter or terminal is required for
Subscribers to have access to all services on its System, Grantee shall make them available to
Subscribers for a fee. Grantee may require each Subscriber who elects to install a converter or
terminal to furnish a security deposit therefor.
1. Each converter or terminal device shall be and remain the property of the
Grantee. Grantee shall be responsible for maintenance and repair of all equipment owned by
Grantee and may replace it as Grantee may from time -to -time elect, except that Subscriber
shall be responsible for loss of or damage to any such device while in the Subscriber's
possession.
2. Upon termination or cancellation of Subscriber's service, Subscriber shall
promptly return Grantee's property to Grantee in the same condition as received, reasonable
wear and tear excepted.
3. Grantee may apply the security deposit against any sum due from
Subscriber for loss of or damage to such converter or terminal exceeding reasonable wear and
tear. In the event that no security deposit has been required, the Grantee may charge the
Subscriber for any such damage exceeding reasonable wear and tear.
4. If Grantee has no claim against the Subscriber's security deposit, Grantee
shall return it, or the balance, to the Subscriber within thirty (30) days of return of the
converter or terminal.
Design and Construction.
rr. System Construction. The System shall be constructed in accordance with the
provisions of the Franchise.
ss. Construction Components and Techniques. Construction components and
techniques shall be in accordance with the Franchise and all applicable law.
ft. Construction Notice. Grantee shall give at least forty -eight (48) hours advance
written notice to all property owners and to the Grantor prior to installing any above - ground or
underground structures upon easements located on private property. Grantee shall be a
member of Underground Service Alert ( "USA ") and comply with its requirements and
procedures.
uu. System Construction.
1. The Grantee shall begin to offer Cable Service and any other service
authorized by the Franchise no later than the date specified in the Franchise.
• Cable Communications Franchise Ordinance
November 12, 2003
Page 30
2. A Grantee shall provide a detailed construction plan including an estimated
progress schedule, area construction or reconstruction maps; a System Testing Plan, and
projected dates for offering service to Subscribers.
3. A Grantee shall remove or relocate, at the request of the Grantor and
without expense to the Grantor, any facilities installed, used and maintained under any
franchise if and when made necessaryby any lawful change of grade, alignment or width of
any public street, way, alley or place; including the construction of any subway or viaduct by
the Grantor.
4. The City Engineer shall be authorized to direct a Grantee to locate any
conduits and appurtenances as may reasonably necessary to avoid sewers, waterpipes,
conduits or other structures lawfully in or under the streets; and before the work of
constructing any pipes and appurtenances is commenced, the Grantee shall file with said
Engineer plans showing the location thereof, which shall be subject to the approval of said
Engineer; and all such construction shall be subject to the inspection of said Engineer and
done to his reasonable satisfaction. All street coverings or openings of traps, vaults, and
manholes shall at all times be kept flush with the surface of the streets; provided, however,
that vents for underground traps, vaults and manholes may extend above the surface of the
streets when said vents are located in parkways, between the curb and property lines. All
above - ground facilities including, but not limited to, pedestals, nodes, and boxes shall only be
placed in those locations as reasonably specified by the City Engineer. Installations shall not
interfere with pedestrian and traffic flow and shall be consistent with ADA requirements.
5. If any portion of any street shall be damaged by reason of defects in any of
the conduits and appurtenances maintained or constructed pursuant to a franchise, or by
reason of any other cause arising from the operation or existence of any pipes and
appurtenances constructed or maintained under any other grant, said Grantee shall, at its own
cost and expense, immediately repair any such damage and restore such street, or portion of
street, to as good condition as existed before such defect or other cause of damage occurred,
such work to be done under the direction of the City Engineer, and to his or her satisfaction.
6. A Grantee shall guarantee the integrity, durability and structural integrity of
any street cut repairs necessary for the installation or repair of grantee's facilities for the life of
the street. Grantee shall repair or replace, at no expense to the City, any failed street cut
completed by Grantee or Grantee's subcontractor, as determined by the City Engineer.
vv. Geographical Coverage. A Grantee shall construct the Cable System so that it is
capable • of providing Cable Service to every Residential Dwelling Unit and other structures
specified in the Franchise within the Franchise Service Area. A Grantee shall take reasonable
steps to accommodate future annexations to the Franchise Service Area (as defined and
provided by the Franchise), with any exceptions requiring specific Grantor approval. Cable
Service shall be provided to Subscribers in accordance with the schedules specified in the
Franchise.
• Cable Communications Franchise Ordinance
November 12, 2003
Page 31
ww. Construction Default. 'Upon the failure, refusal or neglect of Grantee to cause
any construction, repair, or the terms of any construction permit, or other necessary work to
comply with the terms of the Franchise, thereby creating an adverse impact upon public
safety, Grantor may (but shall not be required to) cause such work to be completed in whole
or in part, and upon so doing shall submit to Grantee an itemized statement of costs. Grantee
shall be given reasonable advance notice of Grantor's intent to exercise this power, and fifteen
(15) days to cure the default. Grantee shall, within thirty (30) days of billing, pay to Grantor
the actual costs incurred.
xx. Vacation or Abandonment. In the event any street, alley, public highway, or
portion thereof used by a Grantee shall be vacated by the Grantor, or the use thereof
discontinued by a Grantee, upon written notice a Grantee shall forthwith remove its facilities
therefrom unless specifically permitted to continue the same. On the removal thereof, Grantee
shall restore, repair or reconstruct the area where such removal has occurred, to such condition
as may be required by the Grantor. In the event of any failure, neglect or refusal of a Grantee,
after thirty (30) days' notice by the Grantor, to do such work, Grantor may cause it to be done;
and Grantee shall, within thirty (30) days of billing, pay to Grantor the actual costs incurred.
yy. Abandonment in Place. Grantor may, upon written application by Grantee,
approve the abandonment of any property in place by Grantee, under such terms and
conditions as Grantor may approve. Upon Grantor- approved abandonment of any property in
place; Grantee shall cause to be executed, acknowledged, and delivered to Grantor such
instruments as Grantor shall prescribe and approve, transferring and conveying the ownership
of such property to Grantor.
zz. Removal of System Facilities. In the event that Grantee's Plant is deactivated for
a continuous period of thirty (30) days, without prior written notice to and approval by
Grantor, then Grantee shall, at Grantor's option and demand, and at the sole expense of
Grantee, promptly remove from any streets or other areas all property of Grantee. Grantee
shall promptly restore the streets or other areas from which such property has been removed to
its condition existing prior to Grantee's use thereof; provided that Grantee shall not be
required to remove conduit from underground, where Grantor has determined that no damage
to the surface of any structures will result from such nonremoval.
aaa. Movement of Facilities. In the event it is necessary, at Grantor's discretion, to
temporarily move or remove any of a Grantee's property for a public purpose, Grantee, upon
reasonable notice, shall move, at the expense of Grantee, its property as may be required to
facilitate such public purpose. No such movement shall be deemed a taking of Grantee's
property. Nothing herein shall limit the right of Grantee to seek reimbursement from any
party other than Grantor.
bbb. Undergroundina of Cable. Cables shall be installed underground at Grantee's
cost in areas where other like facilities are installed underground. Previously installed aerial
cable shall be installed underground at Grantee's pro rata cost in concert with other utilities,
when those other utilities convert from aerial to underground construction provided that
Cable Communttions Franchise Ordinance
November 12, 2003
Page 32
Grantee is given reasonable notice and access to the underground facilities of such other
utilities or other users of the poles at the time such utilities are placed underground.
ccc. Facility Agreements. No Franchise shall relieve Grantee of any obligations
involved in obtaining pole or conduit space from any department of Grantor, any utility
company, or from others maintaining utilities in Grantor's streets.
ddd. Repair of Streets and Public Ways. Grantee shall not cut, trench, or excavate any
street which has been constructed or overlaid for five (5) years or slurry- sealed for two (2)
years from said construction, overlay, or slurry -seal, as the case maybe, without the advance
written permission of the City Engineer. The City Engineer's consent may be conditioned,
among other things, upon a requirement that Grantee overlay or slung -seal, as determined by
the City Engineer, the entire width of the affected street for the entire length of the project.
Any and all streets and public ways, and improvements located within such streets and public
ways, disturbed or damaged by a Grantee or its contractors during the construction, operation,
maintenance, or reconstruction of the System, shall be restored at Grantee's expense, and
within the reasonable time frame and limits specified by Grantor, to their original condition
unless otherwise authorized in writing by Grantor. Grantee may be required subsequent to
completion of construction, from time to time as determined by the City Engineer, to overlay
or slurry -seal the affected street in order to maintain the structural integrity and/or aesthetics
of the street. All decorative sidewalks (pavers, tiles, etc.) shall be replaced in like kind
pursuant to the written direction of the City Engineer.
eee. Erection of Poles Prohibited'. Grantee shall not erect any pole on or along any
street or public way. If additional poles in an existing aerial route are required, Grantee shall
negotiate with the public utility for their installation. Any such installation shall require the
advance written approval of the Grantor. Subject to applicable federal and state law, a
Grantee shall negotiate the lease of pole space and facilities from the existing pole owners for
all aerial construction, under mutually acceptable terms and conditions.
fff. Reservation of Street Rights. Nothing in a Franchise shall prevent the Grantor
from constructing, repairing, or altering any public work. All such work shall be done, insofar
as practicable, in such manner as not to unnecessarily obstruct, injure or prevent the free use
and operation of any Property of Grantee. However, if any Property of Grantee shall interfere
with the construction, maintenance, or repair of any public improvement; that property shall
be removed or replaced in such manner as directed by Grantor so that the same shall not
interfere with the public work, and such removal or replacement shall be at the expense of a
Grantee.
ggg_ No Interference.
Grantee shall not place equipment where it will interfere with existing and future uses
of the streets, public right -of -way, or public property, with the rights of private property
owners, with gas, electric, or telephone fixtures, with water hydrants or mains, with
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November 12, 2003
Page 33
wastewater stations, with any traffic control system, or any other service or facility that
benefits the Grantor's or its residents' health; safety or welfare.
hhh. Protection of Streets.
Grantee, at its own expense and in a manner as directed by the City Engineer, shall
protect streets and public rights -of -ways, easements, and support or temporarily disconnect or
relocate at its sole cost in the same street or other street or public right -of- -way, any property of
such Grantee when necessitated by reason of
1. Traffic conditions;
2. Public safety;
3. Temporary or permanent street closing;
4. Street construction or resurfacing;
5. A change or establishment of street grade; or
6. Installation of sewers, drains, water pipes, storm drains, lift stations, force
mains, power or signal lines, and any traffic control system.
iii. Marking of Facilities.
It shall be the responsibility of a Grantee to locate and mark or otherwise visibly
indicate and alert others to the location of its underground cable before employees, agents, of
independent contractors of any entity perform work in the marked -off area. A Grantee shall
participate in and adhere to the practices of Underground Services Alert ( "USA ") and provide
at least forty-eight (48) hours prior notice to USA prior to any excavation.
jjj. Construction Standards.
1. All construction, installation, maintenance and repair shall not substantially
affect the appearance or the integrity of the structure, and shall not be installed on private
property without the property owner's permission subject to Section 621 of the Cable Act.
2. All underground drops shall follow (to the greatest extent possible) property
lines, and cross property only at right angles unless otherwise permitted by the property
owner, or required due to the physical characteristics of the subsurface; or required under
applicable law. The Grantor may, either by way of a generally applicable resolution or
through the imposition of routing conditions in any Franchise determine the routing or
placement of cable, conduit, Nodes, pedestals, power supplies, vaults, and other equipment
relating to the System.
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3. All construction shall be accomplished between the hours specified by the
Grantor in the approved permit or ordinances.
kkk. Payment of Fees.
1. Grantee and any and all subcontractors thereof shall obtain, at its own
expense, all permits and licenses required by local law, rule, regulation or applicable
ordinance.
2. As a condition of obtaining all necessary permits and licenses, the Grantee
shall pay all applicable permit fees and, in addition, all of the Grantor's direct labor and
supervisory costs, including customary and reasonable overhead (the "Labor Payment "). The
City Council may, from time to time by resolution, establish the amount of said permit fees.
To the extent not inconsistent with applicable law, the permit fees shall be sufficient to
reimburse the Grantor for its costs, including the costs of staff, independent consultants, and
related overhead, to review the proposed project, processing permits, plan check, inspecting
the project including the costs of an outside inspector and, where applicable, the costs of an
outside soils engineer or compaction testing expert, and the costs of any required testing to
ensure that the construction adheres to standards of this Ordinance, any Franchise, any permit,
and any other requirement of the Grantor.
3. Grantor may hire contractors, at Grantee's sole expense, to carryout any
required work under this Ordinance. Grantee shall make payment within thirty (30) days of
billing from the Grantor. Grantee shall be responsible for any damage caused by the
construction including, but not limited to, damage to the public right -of -way; private property,
streets, existing utilities, curbs, gutters and sidewalks. Grantee shall pay the Grantor any costs
incurred as a result of such damages including repairs made by the Grantor except for costs
incurred as a result of the Grantor's sole negligence or its employees' and agents' sole
negligence. Grantee shall complete restoration of or repairs to any damage caused by its
construction within thirty (30) days from the date of written notice from the Grantor.
4. In lieu of the inspection portion of the Labor Payment or permit fees
described above, at the Grantor's sole option, the Grantor may require Grantee at Grantee's
sole expense; to hire a consultant, who is acceptable to and under the supervision of the
Grantor ( "Consultant "), to inspect the installation of the facilities on behalf of the Grantor, or
provide other services as mutually agreed to by the parties.
111. Progress of the Construction.
Prior to the underground construction of any of the facilities or the installation of any
of the above- ground facilities, unless otherwise agreed to, Grantee shall furnish detailed plans
of the proposed construction and changes thereto to the Grantor. The proposed above- ground
sites must be approved by the Grantor prior to construction of the underground plant.
Depending on health and safety issues; and input from residents, the Grantor, at its sole
Cable Comm• ations Franchise Ordinance
November 12 2003
Page 35
discretion, may require proposed above- ground sites to be relocated by Grantee. Grantee shall
comply with the Grantor's standard construction requirements as they exist from time to time.
mmm. Construction Notification.
1. Construction Plan. Unless otherwise governed by Grantor's construction
regulations and Ordinances, at least ninety (90) days prior to any construction, and from time
to time thereafter, Grantee shall file with the City Manager or other designated employees of
the City, a general construction plan describing in detail the Facilities construction plans,
areas to be served, and an estimated time schedule for such construction ( "Construction
Plan"). Grantee reserves the right to modify or change its Construction Plans at anytime in its
sole discretion, provided Grantee provides written notice to the Grantor. Any modifications to
construction plans must be reviewed and approved by the Grantor before modifications can be
implemented by Grantee.
2. Notice to the Grantor. The Grantor shall have thirty (30) days following
receipt of the Construction Plan, or changes thereto, to approve or disapprove the
Construction Plan.
3. Notice to Other Providers. Grantee shall provide the Grantor with general
engineering base maps identifying existing underground and aerial utility routes, streets;
parcels, poles, and construction needs including points of connections for existing residences,
potential trench routes, and potential locations for facilities at least ninety (90) days in
advance of any underground construction, unless otherwise agreed to, which may be reviewed
in advance by any interested party for the purpose of reducing the impact on the Grantor's
infrastructure and for the public's convenience and shall be approved or disapproved by the
Grantor within sixty (60) days of receipt.
4. Traffic Control Plans. Grantee shall furnish detailed traffic control plans,
which shall include site- specific hours of construction, to the City Engineer no later than thirty
(30) days prior to the commencement of any construction activities which may affect or
impact traffic (the "Traffic Control Plan"). The City Engineer shall provide (if any)
continents to Grantee within ten (10) business days of receipt. The City Engineer may specify
and limit hours of construction in order to avoid traffic congestion during peak periods. No
construction related activities maybe conducted in the Public Right -of -Way without an
approved traffic control plan.
5. Telephone Contact. During construction, Grantee shall provide the Grantor
a telephone contact number, and staff it during regular business hours, to enable the Grantor to
report any concerns regarding construction of the Facilities. After business hours such calls
will be routed to an on -call supervisor. In the event that the Grantor reports any concerns to
Grantee, Grantee shall respond in a timely manner. Grantee shall correct within two (2)
business days any adverse impact to the Grantor's use or operations or the use or operations of
a third party caused by Grantee's construction activities in the Public Right -of -Way at no cost
to the Grantor.
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November 12, 2003
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6. Daily Notice. Every working day during construction, Grantee shall notify
the designated Grantor staff member of the location of that next day's construction activities.
The number of concurrent construction locations may limited by the Grantor.
7. Project Overview.
No later than one hundred and ninety (90) days prior to commencement of
construction, Grantee shall file with the City Manager or other designated employee of the
Grantor a Project Overview which shall contain an assessment of the operation of the
facilities, including without limitation; a noise study prepared by a licensed engineer approved
by the Grantor documenting noise generated from the Facilities.
Once the project has been satisfactorily defined by Grantee as determined by
the Grantor, the Grantor will conduct an initial study to determine the appropriate level of
environmental review. Grantee will submit the final engineering plans to the Grantor for
review and approval prior to the issuance of any permits.
S. Public Communication Plans.
(a) Grantee agrees to develop a public communication plan
( "Communication Plan") and submit it to the Grantor for the Grantor's review at least ninety
(90) days prior to commencement of construction. The Grantor shall approve or disapprove
the Communication Plan within thirty (30) business days of its receipt. The Communication
Plan shall include the following:
(1) A written mailed or hand delivered notification of property
owners adjacent to all Facilities not less than thirty (30) days prior to the installation
indicating the proposed location, a photograph of all above- ground visible equipment from
which their size must be apparent, and a detailed description of the equipment included within
the node including: the electronic components, natural gas generator; electrical fans, and the
anticipated noise levels during winter and summer months and emergency backup operations.
Grantee will provide its non -toll telephone number and a telephone number of the Grantor that
may be called if the property owner is concerned about the installation.
(2) The hanging of door hangers on all residences in the
construction area at least seven (7) days prior to immediate construction activity.
(b) Grantee agrees to participate in any public hearings or meetings
scheduled by the Grantor and will be prepared to answer questions concerning Grantee's
proposed construction of the above - ground visible equipment. Grantee shall have available at
such meetings visual aids as appropriate such as slides, maps and diagrams. All above- ground
equipment locations in the City must be approved by the Grantor prior to construction of the
underground cable plant. Depending upon health and safety issues, and input from residents,
the Grantor; at its sole discretion, may require proposed above- ground visible equipment sites
be relocated by Grantee.
•
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November 12, 2003
Page 37
9. Maps and Plans.
Grantee shall maintain accurate maps and improvement plans of the Facilities;
in a manner consistent with telecommunications industry standards and which can be
integrated into the Grantor's Geographic Information System ( "GIS "). Grantee shall furnish
to the Grantor two complete sets of as -built construction drawings within sixty (60) days of
completion of the construction of the Facilities. Maps and improvement drawings shall be
furnished to the Grantor and other parties interested in performing work within the Public
Right -of -Way, upon request, at no cost to the Grantor. Grantee shall pothole its Facilities, at
its expense; within fifteen (15) days of receipt of a written request from the Grantor unless
Grantee can certify, with an associated indemnity approved by the City Attorney, the exact
location and depth of the Facilities at the location where potholing is requested.
10. Certification of Completed Facilities.
Grantor shall provide Grantee written notice of any street improvement project
within Grantor's Service Area. Upon receipt of said written notice unless, Grantee shall
certify in writing to Grantor that its Facilities located in the street improvement project are
complete and require no further construction for aperiod of three (3) years, other than
maintenance , Grantee shall apply for all necessary permits and authorizations so that any
necessary facilities will be installed and completed prior to completion of the street
improvement project.
Operations And Maintenance.
nnn. Customer Service.
1. A Grantee shall maintain an office in the Service Area, or at such other
location as is approved by the Grantor in writing. That office must be open during all usual
business hours, but in no case less than forty eight (48) hours per week, including during at
least one weekend day per week. Grantor shall have a publicly listed, non- long- distance-
charge telephone number that is in operation to receive Subscriber Complaints and requests on
a 24 -hour basis. Current information shall be maintained of all Complaints and their
disposition, and a summary thereof shall be submitted to Grantor.
2. The Grantee shall respond to requests as follows: (i) within eight (8) hours
after receipt of a request for repairs relating to a Cable Service Interruption affecting at least
ten (10) percent of the Subscribers of the System; (ii) within twenty -four (24) hours after
receipt of requests for service related to all other Cable Service Interruptions; (iii) and within
forty -eight (48) hours for all other complaints and requests for repair. All Cable System
related problems shall be resolved within five (5) business days unless technically infeasible.
No charge shall be made to a Subscriber for such service or repairs, except that Grantee may
charge for service calls not related to its Cable System, or that are caused by the Subscriber or
members of its household, or the Subscriber's agents or guests.
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3. The Grantee shall provide a telephone service system to receive all
construction and service complaints. A sufficient number of customer service representatives
shall be provided so that callers are not required to wait more than thirty (30) seconds before
being connected to a customer service representative ninety percent (90 %) of the time,
measured quarterly, or to receive busy signals more than three (3) percent of the time,
measured quarterly. The telephone number of the local office shall be listed in the telephone
directory serving the City of Newport Beach. The telephone service system shall accept
complaints twenty -four (24) hours a day, seven (7) days a week. The telephone service
system shall be capable of generating reports relating to answer times; response times, hold
times, and abandoned calls.
4. Customer service personnel shall identify themselves immediately.
5. Customers shall have the right to speak with a supervisor, and if none is
available, a supervisor shall return the customer's call within one working day.
6. All officers, agents, or employees of the Grantee, including its contractors
or subcontractors, who come into contact with members of the public shall wear on their outer
clothing a photo- identification card in a form reasonably acceptable to Grantor. Grantee shall
account for all identification cards at all times. Every vehicle of Grantee, or its major
subcontractors, shall be clearly identifiable as working for Grantee.
000. Biennial Audit of Performance.
1. Grantor may require that performance audits of the System be conducted
every two (2) years by an independent technical consultant selected by Grantor to verify that
the System complies with all technical standards and other specifications of the Franchise.
2. Upon completion of a performance audit, the Grantor and Grantee shall
meet to review the performance of the Cable System. The reports required by this Ordinance
regarding Subscriber complaints, the records of performance audits and tests, and the opinion
survey report shall be utilized as the basis for review. In addition, any Subscriber may submit
complaints prior to or during the review meetings, either orally or in writing, and these shall
also be considered,
3. Within thirty (30) days after the conclusion of the System performance
review meetings, Grantor shall issue findings with respect to the adequacy of System
performance and quality of service. If areas of non - compliance are found, Grantor may direct
Grantee to correct the non- compliance within such period of time as Grantor determines is
reasonable.
4. Participation by the Grantor and the Grantee in this process shall not waive
any rights they may possess under applicable federal or state law.
® Cable Communications Franchise Ordinance
November 12, 2003
Page 39
5. In addition to the Biennial Audit described above, Grantor may conduct an
annual audit of the same or lesser magnitude, at its sole expense, when and if determined
necessary or appropriate by Grantor.
ppp. System Technical Data. Grantee shall provide Grantor with a computer disk or
other data storage device requested by Grantor, in format approved by Grantor, which details
and documents all of Grantee's equipment and facilities and their geographic location in the
City. Such computer disk or other device shall be updated at least annually and whenever
there have been significant changes in the location of Grantee's equipment and facilities. In
addition, Grantee shall maintain in its local office a complete and up -to -date set of as -built
system maps upon completion of construction or reconstruction, equipment specification and
maintenance publications, and signal level diagrams for each active piece of electronic
equipment in the system. As -built drawings shall show all lines and installed equipment, and
tap values and spigots. The scale of maps and drawings shall be sufficient to show the
required details in easily readable form and size. Technical data at the local office shall also
include approved pole applications, details and documentation of satellite and microwave
equipment, mobile radio units, heavy construction vehicles and equipment, and video and
audio equipment normally used in the operation of the system. If Grantor requires use of
technical data in its own offices, it may make copies of any items.
qqq. Availability of Technical Data. All technical data reasonably necessary to
demonstrate a Grantee's compliance with FCC regulations, this Ordinance, and the Franchise
shall be available for Grantor's inspection during normal business hours upon two (2)
business days notice. In the event of System failure or other operating emergency, the
technical data will be made available at any time, so long as the provision of said data does
not unreasonably interfere with Grantee's operations.
rrr. Emereencv Repair Capability. It shall be Grantee's responsibility to assure that its
personnel, qualified to make repairs, are available at all reasonable times and that they are
supplied with keys, equipment location instructions, and technical information necessary to
begin repairs upon notification of the need to maintain or restore continuous service to the
System.
sss. Refund. When a Subscriber voluntarily discontinues service, Grantee shall
refund, within thirty (30) days of the discontinuance of service, the unused portion of any
advance payments after deducting any charges currently due through the date of such
discontinuance. Unused payment portions shall be the percentage of time for which
Subscriber has paid for service and will not receive it because of the Subscriber's
discontinuation of service.
ttt. Disabled Access.
1. The Grantee shall provide maximum practicable availability of the Services
and facilities of the System to disabled persons. At a minimum, the Grantee shall provide a
Cable Communications Franchise Ordinance
November 12, 2003
Page 40
single remote control device for each television set connected to the Service to those
Subscribers who are paraplegic or quadriplegic.
2. Upon initiation of Service in the Grantee, the Grantee shall submit to the
Grantee a plan and /or report describing the equipment, facilities, and ongoing services the
Grantee intends to or does make available to disabled persons. Such information regarding the
facilities, equipment, and ongoing services for disabled persons shall be kept updated and the
Grantee shall promptly submit to the Grantee Manager notification of any deletions or
additions to such information.
3. The Grantee shall provide within forty-five (45) days of a request from a
Subscriber, for rental or purchase; equipment which facilitates the reception of all cable
channels by hearing- impaired Subscribers in accordance with the FCC's regulations regarding
Closed Captioning. The Grantee shall also provide TDD (or equivalent) equipment at the
Grantee office that will allow such Subscribers to contact the Grantee for any reason related to
the System.
uuu. Employee Identification. All personnel of the Grantee contacting Subscribers or
potential Subscribers outside the office of the Grantee must be clearly identified as associated
with the Grantee.
vvv. Installations.
1. All installations will include appropriate grounding, adjustment of the
television set in order to receive Service, and the provision of required Subscriber information
and literature to instruct the Subscriber in the utilization of the Services.
2. The Grantee shall offer Subscribers the option to receive an A/B switch at
the time of initial Service installation for no additional installation cost, and shall provide
Subscribers with written information on how to use such a switch.
3. Upon Subscriber request, the Grantee shall provide an A/B switch after the
initial installation of Service. If the Subscriber requests installation of such a switch, the
Grantee may charge reasonable fees for such installation which fee shall not exceed the
maximum rate permitted by applicable law.
4. When applicable, if the Grantee cannot perform standard installations
within nine (9) calendar days of request by a Subscriber (provided that the schedule or
preferences of the person requesting installation have not been responsible for the delay), the
Subscriber may request and is entitled to receive a credit equal to one month of Basic Service.
If the Grantee fails to provide this credit and the request was made by the Subscriber within
sixty (60) days of the installation request, the Grantee may direct the Grantee to issue the
credit. Repeated failure to perform standard installations within the nine (9) calendar days or
to provide the credit for late installations shall be grounds for Franchise revocation or other
enforcement actions.
Cable Communications Franchise Ordinance
November 12, 2003
Page 41
Service Interruntions And Other Service Problems
1, The Grantee shall render efficient service, make repairs promptly, and
interrupt Service only if unavoidably necessary and for the shortest period possible. Such
interruptions, insofar as possible, shall be preceded by reasonable notice to each affected
person and shall occur during periods of minimum System use.
2. The Grantee shall promptly notify the Grantor of any significant "Service
Interruption" in the operation of the System. For the purposes of this Section; a "significant
Service Interruption in the operation of the System" shall mean any interruption of Cable
Services of duration of at least four (4) continuous hours to at least ten percent (10 %) of the
Subscribers in the area or areas of the Grantee served by the Grantee.
3. The Grantee shall exercise its best efforts to limit any Service interruption
for the purpose of maintaining, repairing, or reconstruction of the System to periods of
minimum use. Except in an emergency or other situation necessitating a more expedited or
alternative notification procedure, the Grantee may schedule a Service. Interruption for a
period of more than four (4) hours during any twenty -four (24) hour period only after the
Grantee and each affected Subscriber in the Grantee have been given twenty -four (24) hours
prior notice of the proposed interruption.
4. Technicians employed by the Grantee and capable of performing Service -
related emergency repairs and maintenance must be available twenty -four (24) hours a day,
every day, including weekends and holidays.
5. The Grantee must acknowledge complaints from Subscribers within twenty-
four (24) hours (excluding weekends and holidays except in the case of Service Interruptions).
6. Excluding conditions beyond the control of the Grantee, the Grantee will
begin working on Service Interruptions promptly and in no event later than twenty -four (24)
hours after the interruption becomes known (including weekends and holidays). "Working on"
constitutes taking positive steps toward rectifying the problem not merely acknowledging the
problem.
7. The Grantee must begin actions to correct Cable Service problems other
than Service Interruptions the next business day after notification of the Cable Service
problem.
8. Verification of Subscriber complaints, including but not limited to billing
complaints, and resolution must occur within forty-eight (48) hours (provided that the
schedule or preferences of the person requesting installation have not been responsible for the
delay); and in any event, resolution must occur within one (1) week. Those matters requiring
additional maintenance, repair, or technical adjustments that are documentable as
necessitating in excess of one (1) week to reasonably complete, must be finally resolved
within thirty (30) days of the initial complaint. The Grantee Manager's office may require
® Cable Communications Franchise Ordinance
November 12, 2003
Page 42
reasonable documentation to be provided by the Grantee to substantiate the request for
additional time to resolve a complaint.
9. The Grantee shall provide an automatic credit to all Subscribers when there
is an Outage of all channels for a period of twenty -four (24) consecutive hours or more which
affects an entire service area, franchise area served by the Grantee, regardless of the cause of
the Outage. The credit for such an Outage shall equal; at a minimum; the value of one - thirtieth
(1/30) of each Subscriber's monthly bill for the first twenty-four (24) consecutive hour period
and prorated for each additional four (4) hour period or portion thereof that the Outage
continues.
10. The Grantee shall provide an automatic credit to all affected Subscribers
when there is an Outage of any Premium Service for a period of twenty -four (24) consecutive
hours or more which affects an entire franchise area, or other discrete area of the Grantee
served by the Grantee, regardless of the cause of the Outage. The credit shall equal, at a
minimum, the value of one - thirtieth (1130) of each Subscriber's monthly bill for that Premium
Service for the first twenty -four (24) hour consecutive hour period and prorated for each
additional four (4) hour period or portion thereof that the Outage continues.
11. Upon request of the Subscriber, the Grantee shall provide a credit to ,a
Subscriber whenever an Outage or Outages of four or more hours in a twenty -four (24) hour
period has affected any the non - premium channels received by a Subscriber as part of their
Service. The credit shall equal the value of one - thirtieth (1/30) of each Subscriber's monthly
bill for Outages of four (4) hours or greater duration occurring in a twenty -four (24) hour
period. In the event that a premium channel is affected by the Outage, the credit shall equal
the value of one - thirtieth (I /30) the Subscriber's monthly premium rate for each Outage of
four (4) hours or greater duration occurring in a twenty -four (24) hour period.
12. Repeated failure to provide the proper credit for Outages shall be grounds
for Franchise revocation or other enforcement actions.
xxx. Service Appointments.
1. The "appointment window" alternatives for installations, service calls for
Cable Service, and other installation activities will be either a specific time or, at maximum, a
four -hour time block during normal business hours. (The Grantee may schedule services calls
for Cable Service and other iinstallation activities outside or normal business hours for the
express convenience of the Subscriber).
2. If the Grantee does not arrive for appointments for installations or service
calls within a designated 4 -hour time frame agreed to by the Subscriber, the Subscriber may
request and is entitled to receive a credit equal to one month of Basic Service. If the Grantee
fails to provide such credit, and the request was made by the Subscriber within 60 days of the
missed appointment, the Grantee may direct the Grantee to issue the credit. Repeated failure
to provide the credit shall be grounds for Franchise revocation.
Gable Commations Franchise Ordinance
November 12, 2003
Page 43
3. The Grantee may not cancel an appointment with a Subscriber after the
close of business on the business day prior to the scheduled appointment.
4. If the Grantee's representative is running late for an appointment with a
Subscriber and will not be able to keep the appointment as scheduled, the Grantee will
document a diligent effort to contact the Subscriber directly. If, however, the Subscriber is
unavailable at the time the contact attempt is made, the Grantee will attempt a second .
documented contact at least one more time during the previously agreed upon appointment
window. The appointment will be rescheduled, as necessary, at a time which is convenient to
the Subscriber. Contacting the Subscriber will not necessarily excuse a missed appointment.
In the event that it is necessary for Grantee to contact the Subscriber regarding the scheduled
appointment and Subscriber is not available, Grantee will use its best efforts to provide the
Subscriber with a phone number to contact Grantee.
yyy. Notices & Customer Communications.
1. The company shall send annually, written notice to all Subscribers
informing them that any complaints or inquiries not satisfactorily handled by the Grantee may
be referred to the Grantee Manager. Such notification shall be either:
(a) A separate document that may be included with a billing statement
or as part of the Grantee's annual notice; or
(b) Included on the portion of the monthlybill that is to be retained by
the Subscriber.
The Grantee's telephone number for Service and the telephone number for the
Grantee shall be contained in the notice. This notice shall also fully describe the Grantee's
telephone hours and, when applicable, the lobby hours and shall include the telephone
number(s) available to Subscribers after the Grantee's normal business hours through which
Subscribers can obtain, at a minimum, emergency referral information. No promotional
material may be included on the separate document or the portion of the bill containing this
notice.
2. For informational purposes and for the Grantee to ensure nondiscrimination,
the Grantee shall provide the Grantor and Subscribers a complete schedule of all current
programming services, excluding pay- per -view, rates and charges and promotional offers.
3. The Grantee shall notify Subscribers of any pricing changes or additional
charges and/or any changes in programming services as soon as possible through
announcements on the System and in writing. Notice must be given to Subscribers a minimum
of thirty (30) days in advance of such changes if the change is within the control of the
Grantee.
Cable Communications Franchise Ordinance
November 12, 2003
Page 44'
4. The Grantee shall notify all Subscribers prior to making available any
channel(s) full or part-time without charge if programming rated NC -17, R, X, or the
equivalents thereof will be available for viewing. This notification shall include the rating(s)
of the programming to be made available for viewing and the right of the Subscriber to have
the Grantee block the programming. The Grantee shall provide, by sale or lease, a device for
blocking this programming.
5. The Grantee shall provide written information to Subscribers on each of the
following areas at the time of installation of Cable Service, at least annually to all Subscribers,
at any time upon request, and at least thirty (30) days prior to making significant changes in
the information required by this Section:
(a) products and services offered;
(b) prices and options for programming services and conditions of
subscription to programming and other services and facilities;
(c) installation and maintenance policies including, when applicable,
information regarding the Subscriber's home wiring rights and information describing
ownership of internal wiring during the period Service is provided;
(d) of programming carried on the System;
(e) billing and complaint procedures, including the name; address and
telephone number of the Grantee Manager's cable television division;
(f) the availability of the signal control device required by Section
624(d)(2) of the Cable Act and AB switches;
(g) the procedures by which the Subscriber will be notified of changes
in fees, charges, deposits, or associated terms and conditions for any Service;
(h) the Grantee's practices and procedures for protecting against
invasions of privacy as required by Section 631 of the Cable Act, and Section 637.5 of the
California Penal Code;
(i) the address and telephone number of the Grantee's office to which
complaints may be reported; and
0) when applicable, the Grantee's Community Unit Identifier as
specified by the FCC.
6. Notices of changes in rates shall indicate the new rate inclusive of all fees
and /or other fees and the amount the rate has increased or decreased from the current rate.
Specific words such as "increase" or "decrease" must be used to describe the changes (as
opposed to less specific terms, such as "adjustment "),
Cable Communications Franchise Ordinance
November 12, 2003
Page 45
7. Notices of changes of programming services and/or channel locations shall
include a description of the new programming service, the specific Dial Location, and the
hours of operation of that programming service In addition, should the Dial Location, hours
of operation, or existence of other programming services be affected by the introduction of a
new service, such information must also be included in the notice.
S. order that Subscribers are fully apprised of the charges they may incur,
the Grantee shall advertise rates that include all costs and fees.
9. Every notice of termination of Service shall include all of the following
information:
(a) the name and address of the Subscriber 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 Grantee who can
provide additional information and handle complaints or initiate an investigation concerning
the Service and charges in question.
10. For informational purposes only, a listing of the Grantee closings or
holidays (e.g. "no business" days) will be provided to the Grantee Manager annually, by no
later than July I and by no later than every anniversary thereafter.
zzz. Disconnections/Denial Of Service.
1. The Grantee shall not terminate residential Service for nonpayment of
delinquent account unless the Grantee furnishes a notice of the delinquency and impending
termination at least fifteen (15) day prior to the proposed termination. The notice shall be
mailed, postage prepaid, to the Subscriber to whom the Service is billed. This notice shall not
be mailed until the sixteenth (16th) day after the date the bill for Services was mailed to the
Subscriber. The notice of delinquency and impending termination may be part of a billing
statement.
2. The Grantee shall not assess a late fee any earlier than the twenty - second
(22nd) day after the bill for Services has been mailed.
3. The Grantee shall only terminate Cable Service on days when the
Subscriber can reach a representative of the Grantee either in person or by telephone. Cable
Service terminated without good cause must be restored without charge for the Cable Service
restoration. Good cause includes, but is not limited to, failure to pay, payment by check for
Cable Communications Franchise Ordinance
November 12, 2003
Page 46
which there are insufficient funds, theft of Service, abuse of equipment or System personnel,
or other similar Subscriber actions.
4. The Grantee shall furnish and maintain Cable Services to each person who
makes a bona fide request to receive any programming service. Nothing in this Ordinance
shall limit the right of the Grantee to deny Cable Service to any household or individual which
has a negative credit or service history with the Grantee, which may include non - payment of
bills or theft or damage to the Grantee's equipment, or who has threatened or assaulted
employees of the Grantee in the course of their employment.
aaaa. Deposits, Refunds, And Credits,
1. The Grantee may require refundable deposits in circumstances where such
deposits are necessary to protect equipment or to ensure payment where there is reasonable
evidence of a risk of nonpayment, provided that the Grantee shall be required to pay simple
interest at a rate of one -half percent (1/2 %) per month (6% per year). Such interest shall be
accrued and payable upon termination of Service. Upon termination of Service for any reason,
Subscribers will be entitled to receive a refund or credit against amounts owed the Grantee
equal to the deposit plus accumulated interest.
2. Refund checks will be issued promptly following the resolution of the event
giving rise to the refund; and by the earlier of either:
(a) the Subscriber's next billing cycle; or
(b) forty-five (45) days.
3. If the Grantee does not mail a check for a refund (including applicable
interest) to any Subscriber disconnecting Service with an outstanding credit within 45 days of
the date Cable Service is ended, and the Subscriber has returned all Grantee owned
equipment, the Subscriber may request and is entitled to receive a $4.75 payment, in addition
to the total refund (and applicable interest) due. If the Grantee fails to provide the $4.75
payment and the request was made by the Subscriber within 60 days after failure to receive the
refund, the Grantor may direct the Grantee to provide the $4.75 payment as well as any
outstanding refund (and applicable interest) due. Repeated failure to provide the $4.75
payment shall be grounds for Franchise revocation and/or other enforcement actions.
4. Credits for Cable Service will be issued no later than the Subscriber's next
billing cycle following the determination that a credit is warranted.
bbbb. Rates, Fees, And Charges.
1. The Grantee shall not, except to the extent expressly permitted by law,
impose any fee or charge on any Subscriber for: (A) any service call to said Subscriber's
premises to perform any repair or maintenance work related to Grantee, installed equipment
• Cable Communications Franchise Ordinance
November 12; 2003
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necessary to receive Service, except any such work which was necessitated by a negligent or
wrongful act of said Subscriber; or (B) the disconnection of any Services to a Subscriber,
provided that the Grantee may impose appropriate charges if, at the time of disconnection,
some or all of the Grantee's equipment is not returned to the Grantee or the Subscriber has not
paid all outstanding fees and charges due to the Grantee; or there is damage to the equipment
of the Grantee, excluding normal wear and tear and the circumstances described in the next
paragraph.
2. Where the actions of the Grantee, its agent(s) or subcontractor(s) can be
shown upon a reasonable demonstration of evidence to have contributed to the theft, loss or
damage of a converter or other equipment lawfully used by a Subscriber, the Subscriber's
liability with respect to said converter or other equipment shall be reduced to the extent of
such contributing actions.
3. All charges for Services must be applied on a nondiscriminatory basis
recognizing that the Cable Act allows for reasonable discounts to senior citizens and/or the
economically disadvantaged and that the Grantee may, upon reasonable notice to Subscribers,
conduct promotional campaigns in which rates are discounted or waived, and may offer bulk
rate discounts for multiple dwelling units, hotels, motels, and similar institutions.
4. The Grantee shall assess late fees in accordance with applicable state law.
cccc. Enforcement.
1. Repeated failure to comply with any or all of the provisions delineated
above shall be grounds for Franchise revocation in accordance with the Franchise revocation
procedures and/or other enforcement actions.
2. The Grantor may seek injunctive relief or any other judicial remedy
available pursuant to state or federal law in order to enforce compliance with these standards.
dddd. Rights Reserved By The Grantor.
1. The Grantor reserves the right to establish additional, reasonable Subscriber
Cable Service standards from time to time, as may be necessary, after making a finding of
need and after notice to and opportunity to be heard from the Grantee has been afforded.
2. The Grantor reserves the right to regulate rates for Cable Service to the
fullest extent permitted by law. Notwithstanding anything in these standards to the contrary, in
the event that the Cable Act is amended or repealed, or restrictions on the authority of the
Grantor to regulate rates are otherwise removed or lessened, or the FCC or any court permits
the Grantor to regulate such rates, the Grantor may, at its discretion, establish additional
procedures and standards for rates and regulate such rates to the fullest extent of its regulatory
authority under federal, State, and local laws.
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November 12, 2003
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eeee. Performance Meetings. Upon request of the Grantor, the Grantee will meet with
the Grantor to review the requirements set forth in this Appendix C. The Grantee's operational
and technical personnel shall review with the Grantor such items as trouble calls and outage
reports, installation records, system performance standards, new product rollout progress
reports and other items required by the Grantor.
Violations.
ffff. Use of Public Streets, From and after the effective date of this Ordinance, it shall
be unlawful for any person to construct, install, or maintain in any public place within
Grantor's territory, or upon any easement owned or controlled by a public utility, or within
any other public property of Grantor, or within any privately -owned area within Grantor's
jurisdiction which is not yet; but is designated as, a proposed public place on a tentative
subdivision map approved by Grantor, any equipment, Facilities, or System for distributing
signals or services through a cable television system, unless a Franchise has first been
obtained hereunder, and is in full force and effect.
gggg. Unauthorized Connections. It shall be unlawful for any person to make or use
any unauthorized connection to, or to monitor, Tap, receive or send any signal or service via a
franchised System, or to enable any Person to receive or use any service, television or radio
signal, picture, program, or sound, or any other signal without payment to the owner of said
System.
hhhh. Tampering with Facilities. It shall be unlawful, without the consent of the
owner, to willfully attach to, tamper with, modify, remove or injure any physical part of or
signals on a franchised System.
Termination and Related Rights.
iiii. Material Breach.
1. In the event that the Grantee fails to comply with a material provision of any
franchise, then, in accordance with the procedures provided herein, the Grantor may revoke
the franchise granted herein and terminate any franchise in accordance with the procedure set
forth below.
2. A failure to comply with a material provision of any Franchise shall include,
without limitation, any of the following acts or failures to act by the Grantee, an Affiliated
Person or the Guarantor of any of the following events, unless excused by the Grantor.
(a) Substantial failure to provide required financial information;
(b) Substantial failure to satisfy the requirements regarding System
characteristics or repeated failure to meet the technical performance standards, as provided in
any franchise;
® Cable Communications Franchise Ordinance
November 12, 2003
Page 49
(c) Substantial or repeated failure to provide any Cable Service to any
Person as required by any franchise;
(d) Substantial failure to maintain the mix, level, and quality of
Services within the broad categories of video programming and other services as set forth in
any franchise;
(e) Abandonment of the System, in whole or in material part, without
the prior written consent of the Grantor;
(f) Substantial; failure to supply the PEG Channels and related, facilities
and equipment after the date by which said items must be supplied, as provided in any
franchise;
(g) Substantial failure to comply with the interconnection
requirements, as provided in any franchise;
(h) Substantial and repeated imposition of any nonstandard Installation
and other charges for Basic Service which are discriminatory,
(i) Substantial and repeated failure to comply with consumer service
standards and
0) Substantial failure to comply with the privacy rights of Subscribers
as provided in this Ordinance; any franchise, or Section 631 of the Cable Act or Section 637.5
of the California Penal Code;
(k) Substantial failure to make any of the Franchise Fee compensation
payments as provided herein, or any other payments required by this Ordinance or any
franchise, or to maintain the bond or other instrument in the amount required herein;
(1) Substantial failure to comply with any rules, laws, regulations,
orders or other directives of the Grantor issued pursuant to the police powers or pursuant to
this Ordinance or any franchise;
(m) The taking of any material action which requires the approval or
consent of the Council without having first obtained said approval or consent, as provided in
Section 5.44.0300) of this Ordinance;
(n) Substantial failure to furnish and maintain throughout the term of
any franchise the liability and indemnification insurance coverage;
(o) To engage in a course of conduct intentionally designed to practice
any fraud or deceit upon the Grantor, any Subscriber, or any other use of the System;
aCable Communications Franchise Ordinance
November 12, 2003
Page 50
(p) Failure to cooperate fully and faithfully with any lawful
investigation, audit or inquiry conducted by a governmental agency;
(q) Any material written misrepresentation, intentionally made by or on
behalf of the Grantee in its proposal for the franchise granted pursuant to any franchise, or in
connection with the negotiation or renegotiation of, or any amendment or other modification
to any franchise, to the extent that any such misrepresentation was relied upon by the Grantor;
(r) The conviction or determination of factual guilt, of the Grantee, any
Affiliated Person, any director or executive officer of the Grantee or of an Affiliated Person,
any Person holding Control of or a Controlling. Interest in the Grantee, or any employee or
agent of the Grantee or of any Affiliated Person acting under the express direction or with the
actual consent of Grantee, its directors or officers, of any criminal offense, including,
without limitation, bribery, fraud or misrepresentation arising out of or in connection with the
award, transfer, application for rate increase; or other regulation of any franchise, provided
that the right to terminate any franchise in the event of said convictions shall arise only with
respect to any of the foregoing convictions of the Grantee itself and, in the event of the
conviction of any other Persons specified in this subsection, if the Grantee fails to disassociate
itself from, or terminate the employment of, such other Persons with respect to activities in the
Franchise Area or any other activities affecting the System, within thirty (30) days after the
time in which appeals from such conviction may be taken, or within thirty (30) days following
the final determination of all appeals which are in fact taken;
(s) The conviction of any Grantor officer, Grantor employee, or
Grantor agent of the offense of bribery or fraud which arises out of or in connection with any
intentional action by the Grantee, any Affiliated Person; any director or executive officer of
the Grantee or of any Affiliated Person, any Person holding Control of or a Controlling
Interest in the Grantee, or of any employee or agent of the Grantee or of any Affiliated Person
acting under the express direction or actual consent of the Grantee or any of the foregoing,
which act was undertaken for the benefit of the Grantee;
(t) Any material false entry knowingly made in the books or accounts
or records of the Grantee, or any substantial false statements knowingly made in any report or
filing to the Grantor or any governmental agency or otherwise by the Grantee, any director,
officer, or other Person holding a Controlling Interest in the Grantee, any Affiliated Person, or
any employee or agent of the Grantee acting under the express direction or with the actual
consent of the Grantee;
(u) Failure to comply with a duly constituted lawful order or ruling of
any Grantor regulatory body having jurisdiction over the Grantee; or
(v) Substantial failure to comply with the access origination point
requirements as set forth in any franchise.
Cable Communications Franchise Ordinance
November 12; 2003
Page 51
(w) Substantial failure to comply with the construction requirements
set forth in any franchise.
Notwithstanding the foregoing, if, as a result of a failure or alleged failure to
comply with a material provision of any franchise as delineated in the foregoing subsections,
the Grantee is unable to comply with any other material provision(s) which necessarily and
directly arise(s) out of said failure or alleged failure as delineated in said subsections; such
inability to comply with such other provision(s) shall not be deemed to be an independent
failure to comply with a material provision of any franchise.
3, The Council may exercise its right to revoke and terminate the franchise for
a failure by the Grantee to comply with a material provision of this Ordinance and /or any
franchise in accordance with the following procedures:
(a) The Grantor shall notify the Grantee, in writing, of an alleged
failure to comply with a material provision of any franchise which notice shall specify the
alleged failure with reasonable particularity. The Grantee shall, within forty -five (45) days
after receipt of said notice or in the event such failure cannot be reasonably cured within said
forty-five (45) days, within a reasonable time, provided the Grantee commences to cure within
said forty -five (45) days and diligently pursues such cure to completion, either cure such
alleged failure or, in a written response to the Grantor, either present facts and arguments in
refutation or excuse of such alleged failure or state that such alleged failure will be cured and
set forth the method and time schedule for accomplishing said cure.
(b) The Grantor shall investigate: (i) whether a failure to comply with a
material provision has occurred; (ii) whether said failure is excusable; and (iii) whether said
failure has been cured or will be cured by the Grantee.
(c) If the Grantor determines that a failure to comply with a material
provision has occurred and that either said failure is not excusable or has not been or will not
be cured by the Grantee, then the Grantor shall so notify the Grantee.
(d) At the conclusion of or in the event that the investigation is not
concluded, as provided - above, the Grantor shall, within thirty (30) days, provide notice of a
public hearing at which the Grantee shall have the opportunity to respond to the claim that a
material breach has occurred and to present facts and arguments in refutation or excuse of
such alleged breach, or to demonstrate that such failure shall be cured as provided in any
franchise.
(e) All final Grantor determinations with respect to revocation or
termination must be made by the City Council. Notwithstanding any final determination by
the City Council, the Grantee maintains its rights of appeal, if any, under applicable • law.
4. Circumstances Beyond Control of the Grantee. The Grantee shall not be
subject to sanction when its performance is prevented for reasons beyond its control, unless
• Cable Communications Franchise Ordinance
November 12, 2003
Page 52
such occurrences or conditions are intentionally caused or created by the Grantee, or by an
Affiliated Person at the Grantee's express direction.
5. Except when enjoined bya court of law, litigation pending against the
Grantee shall not excuse the Grantee from the performance of its obligations under this
Agreement. The Grantee may petition the Grantor to be excused from the performance of its
obligation under this Ordinance because of pending litigation which the Grantor may grant or
deny in the exercise of its discretion.
jjjj. Termination and Related Rights.
1. The termination of any franchise and the Grantee's rights therein shall
become effective upon the earliest to occur of: (i) the revocation of the franchise by action of
the Council; (ii) the abandonment of the System, in whole or material part, by the Grantee
without the express prior approval of the Grantor; or (iii) the expiration of the term of the
franchise, if not renewed or extended. In the event of any termination, the Grantor shall have
all rights as provided in any franchise, including, without limitation, the right to order the
Grantee to continue to operate the System or to then or thereafter remove the System, onto
acquire or effect a transfer of the System. In any event; the Grantee maintains its rights of
appeal, if any, under applicable law.
2. In the event of any termination of any franchise, the City Council may direct
the Grantee to operate the System on behalf of the Grantor pursuant to the provisions of this
Ordinance and such additional terms and conditions as are equitable and mutually agreeable to
the Grantor and the Grantee or a third party, for a period of up to twelve (12) months, in
which event the Grantee or third party, as applicable, shall be entitled to all revenues
generated by the System during such period of continued operation. In the case of operation of
the System by a third party, the Grantee shall be entitled to a fair rental for use of the System.
3. Upon the termination of any franchise due to the expiration of the term of
the franchise granted herein, if not renewed or extended, the Grantee shall be entitled to
cancel the performance bond or letter of credit, after account is taken for all offsets necessary
to compensate the Grantor for any uncured failure to comply with any provision of any
franchise as herein provided. If the Grantee continues to operate the System following the
termination of any franchise; the Grantee shall not be entitled to cancel such bond or letter of
credit until the end of such continued operation. In the event of a termination of any franchise
for cause due to a material breach by the Grantee or otherwise; said bond or letter of credit
shall become the pproperty of the Grantor to the extent necessary to cover any costs, loss, or
damage incurred by the Grantor as a result of said termination or material breach, provided
that any amounts in excess of said costs, loss or damage shall be refunded to the Grantee or
surety, as applicable.
4. In the event of any termination, the Grantor may purchase the Cable System
in accordance with the procedures of this paragraph. In such event, the price to be paid for the
Cable System to Grantee shall be the price the Cable Act requires.
Cable Communications Franchise Ordinance
November 12, 2003
Page 53
5. Upon any such acquisition or transfer, and, if applicable, receipt of payment
by the Grantee from the Grantor, the Grantee shall:
(a) Cooperate with the Grantor in maintaining the distribution of all
Services over the System during such acquisition transfer of ownership;
(b) Promptly execute all appropriate documents to transfer to the
Grantor or third party, free of any and all encumbrances, title to the System, as well as all
contracts, leases, licenses, and rights necessary to maintain the System and the distribution of
Services over the System; and
(c) Promptly supply the Grantor with all necessary records to operate
the System, including, without' limitation, all Subscriber records and plant equipment layout
documents.
6. Upon any termination of any franchise if so directed by the Council, the
Grantee shall, at its own cost and expense, promptly remove that part of the System located in
the Streets and Public Ways and shall replace or repair and restore to serviceable condition
each affected Street, Public Way, and governmental structure therein, in such manner as set
forth in this Ordinance.
7. In the event of any acquisition of the System by the Grantor pursuant to this
Section 13, and subject to the requirements of applicable law: (i) the Grantor shall not be
required to assume any of the obligations of any collective bargaining agreements or any other
employment contract held by the Grantee or any other obligations of the Grantee to any of its
officers, employees, or agents, including, without limitation, any pension or other retirement,
or any insurance obligations; and (ii) the Grantor may lease, sell, operate, or otherwise dispose
of all or any part of the System in any manner, provided that the Grantee may seek the award
of any franchise to construct, operate, or maintain the System in connection with any such
sale.
Franchise Applications.
Applicants for an initial Franchise shall submit to the Grantor, or to its designated
representative, written application in a format provided by the Grantor, at the time and place
specified by the Grantor for accepting applications, and accompanied by the designated
application fee. A nonrefundable application fee, established by resolution of the Grantor,
shall accompany the application for an initial Franchise to cover all costs associated with
processing the application, including without limitation, costs of administrative review,
financial, legal and technical evaluation of the applicant, the costs of consultants (including
technical and legal experts), notice and publication requirements, and document preparation
expenses. In the event such costs exceed the application fee, the applicant shall pay the
difference to Grantor within twenty (20) days following receipt of an itemized statement of
such costs. This provision is procedural and shall not constitute the grant of any right to a
• Cable Communications Franchise Ordinance
November 12, 2003
Page 54
Grantee to renewal or otherwise. This provision does not apply to any renewal of an existing
Franchise.
Records; Reports; Right to Inspect and Audit; Experts.
kkkk. Grantee to Provide Records. All reports and records required under this Section
shall be furnished at the sole expense of Grantee.
1111. Records. Grantor must maintain in its local office in the franchise area, and make
available for inspection during normal business hours, a separate and complete set of business
records for the Franchise. The Grantee shall provide that information in such form as may be
required by the Grantor, as well as copies of any records of Grantee upon Grantor's request, so
long as said information is related to the scope of Grantor's rights under this Ordinance, the
Franchise, or Grantor's proper regulatory functions.
mmmm. Maintenance and Inspection of Records. Grantee shall keep true and
accurate books and records in conformity with generally accepted accounting principles,
consistently applied, located in the Franchise Area that reasonably demonstrate a Grantee's
compliance with the obligations set forth in its Franchise. Grantor shall, upon two (2)
business days notice, have the right to inspect said records and receive copies thereof to the
extent said information is reasonably related to the scope of the Grantor's rights under this
Ordinance, the Franchise, or the Grantor's regulatory functions. Any Grantee records kept at
another place shall, within thirty (30) days of Grantor's request, be made available at
Grantee's local premises within the County of Orange.
mum. Reports of Financial and Operating Activit
1. No later than ninety (90) days after the close of Grantee's fiscal year,
Grantee shall submit an audited written report to the Grantor which shall include:
(a) A financial report, audited and certified by a financial officer of
Grantee, for all Cable System activity in the City during the previous fiscal year; including
Gross Annual Receipts from all sources and gross subscriber revenues from each service. The
report must set out separately all gross receipts from all sources in the City and gross
subscriber revenues from each Cable Service in the City, and all payments, deductions, and
computations of franchise fees.
(b) A summary of the previous year's activities, including, but not
limited to, subscriber totals and new services offered and System construction activity.
(c) A current list of Grantee's officers, directors, and other principals if
there has been any change in the previous year.
Cable Communications Franchise Ordinance
November 12, 2003
Page 55
(d) A list of stockholders or other equity investors holding five percent
(5 %) or more of the voting interests in Grantee if there has been any change in the previous
year.
(e) A summary of complaints received and remedial actions taken..
2. Performance Tests and Compliance Reports. Upon written requests of
Grantor, the Grantee shall provide a written report of any FCC or other performance tests
required or conducted. In addition, the Grantee shall provide reports of the test and
compliance procedures required by its Franchise, or by this Ordinance, no later than thirty (30)
days after the completion of those tests and compliance procedures.
3. Additional Reports. The Grantee shall prepare and furnish to the Grantor in
writing, at the times and in the form prescribed by Grantor, such additional reports or
information as Grantor may reasonably require to confirm and verify Grantee's compliance
with the provisions of its Franchise and this Ordinance.
0000. Examination of Facilities. Upon two (2) business days notice, and during
normal business hours, Grantee shall permit examination, by any duly authorized
representative of Grantor, of all Franchise property and facilities, together with any
appurtenant property and facilities of Grantee situated within the Public Rights -of -Way which
are related to the Cable System.
pppp. Right to Audit.
1. In addition to any other inspection rights under this Ordinance or the
Franchise, upon thirty (30) days prior written notice, Grantor shall have the right to inspect,
examine, or audit, during normal business hours, all documents pertaining to a Grantee or any
Affiliated Person which are reasonably necessary to ascertain a Grantee's compliance with its
Franchise or this Ordinance. Grantor may not exercise said right more frequently than once in
any twelve (12) month period. All such documents shall be made available at the local office
of a Grantee. All such documents pertaining to financial matters which may be the subject of
an audit by the Grantor as set forth herein shall be retained by a Grantee for a minimum of
five (5) years during the term of and following the termination of a Franchise. Access by the
Grantor to any of the documents covered by this paragraph f shall not be denied by the
Grantee on grounds that such documents are alleged by the Grantee to contain proprietary
information.
2. Grantor may require written certification by a Grantee's directors, officers,
or other employees with respect to all documents referred to in this paragraph f.
3. Any audit conducted by the Grantor pursuant to this paragraph g shall be
conducted at the sole expense of the Grantor, and the Grantor shall prepare a written report
containing its findings, a copy of which shall be mailed to a Grantee; provided, however, that
a Grantee shall reimburse the Grantor for the expense of any such audit if, as the result of said
Cable Communications Franchise Ordinance
November 12, 2003
Page 56
audit, it is determined that there is a shortfall of more than two percent (2 %) in the amount of
franchise fees or other payments which have been made or will be made by a Grantee to the
Grantor pursuant to the terms of the Franchise.
ggqq. Retention of Experts. In the exercise of its rights under this Ordinance, the
Grantor shall have the further right to retain technical experts and other consultants on a
periodic basis for the purpose of monitoring, testing, and inspecting any construction,
operation, maintenance or reconstruction of the System; and all parts thereof, or to ensure
compliance with and enforcement of the provisions of this Ordinance and the Franchise. The
Grantor shall bear the cost of retaining such experts, provided that, unless prohibited by
applicable law, the Grantee shall reimburse the Grantor for all expenses related to the
retention of said experts where this Ordinance or the Franchise so provide; or under either of
the following circumstances:
1., The Grantee has initiated proceedings which would normally require the
Grantor to retain such experts, such as the filing of a request for approval of a transfer or
change in Control, renewal to the extent allowed by law, expansion of the Franchise Service
Area, or the modification or amendment of the Franchise; or
2. The reports of such experts submitted to the Grantor reveal that the Grantee
has failed to substantially comply with the terms and conditions of this Ordinance or of the
Franchise.
If Grantee is required to reimburse Grantor pursuant to this paragraph g, Grantor shall
send Grantee an itemized description of such charges, and Grantee shall pay such amount
within twenty (20) days after the receipt of such description.
Miscellaneous Provisions.
rrrr: Captions. The section, subsection, paragraph, and subparagraph numbers and
letters, and the captions throughout this Ordinance, are intended to facilitate reading and
reference. Such numbers, letters, and captions shall not affect the meaning or interpretation of
any part of this Ordinance.
ssss. Franchise References. A Franchise which cites, refers to, or otherwise
incorporates this Ordinance, or portions thereof, shall be deemed to be a Franchise issued
under and subject to this Ordinance.
tttt. EiiHi g. When not otherwise specified in this Ordinance, all documents required to
be filed with Grantor shall be filed with the Grantor's representative as designated by Grantor.
uuuu. Non - enforcement by the Grantor. A Grantee shall not be relieved of its
obligation to comply with all provisions of this Ordinance, and of its Franchise, and all laws
and regulations, by reason of any failure of the Grantor to demand prompt compliance.
Cable Communications Franchise Ordinance
November 12, 2003
Page 57
vvvv. Continuity of Service. It is the right of all Subscribers to receive Cable Services
so long as their financial and other obligations to a Grantee are honored. In the event that a
Grantee elects to rebuild; modify, or sell the System, a Grantee shall use due diligence and
reasonable care to ensure that all Subscribers receive continuous, uninterrupted service. In the
event of a transfer of the System by Grantee, the current Grantee shall cooperate with the
Grantor or new Grantee to operate the System for a temporary period, in order to maintain
continuity of service to all Subscribers. In the event that Grantee, through its own fault,
discontinues system -wide service for seventy -two (72) continuous hours, and Grantee is in
material default of its Franchise, or if the Franchise is revoked by Grantor (but not if Grantor
fails to renew the Franchise), Grantor may, by resolution, when it deems reasonable cause to
exist, assume operation of the System for the purpose of maintaining continuity of service.
Grantor's operation of the System may continue until the circumstances which, in the
judgment of the Grantor, threaten the continuity of service are resolved to Grantor's
satisfaction. Grantor shall be entitled to the revenues for any period during which it operates
the System.
wwww. Operation By Grantor. During any period when the System is being operated
by Grantor pursuant to paragraph e above, Grantor shall, as it may deem necessary, make any
changes in any aspect of operations that, in Grantor's sole judgment; are required for the
preservation of quality of service and its continuity.
xxxx. Management By Grantor. Grantor may, upon assuming operation of a System
franchised hereunder, appoint a manager to act for it in conducting the System's affairs. Such
manager shall have such authority as may be delegated by Grantor and shall be solely
responsible to Grantor for management of the System. Grantee shall reimburse Grantor for all
its reasonable costs, in excess of System revenues, incurred during Grantor's operation if the
Franchise is in full force and effect during the period of Grantor's operation.
yyyy. Notices. All notices and other communications to Grantee shall be addressed to
it at the local address at which Grantee conducts its business or as otherwise set forth in the
Franchise. All notices and other communications to Grantor shall be addressed to Newport
Beach City Hall, or such other address as may designated by Grantor,
zzzz. Force Maieure; Grantee's Inability to Perform. In the event Grantee's
performance of any of the terms, conditions, obligations, or requirements of this Ordinance, or
any Franchise granted hereunder, is prevented or impaired due to any cause beyond its
reasonable control and not reasonably foreseeable, such inability to perform shall be deemed
to be excused, and no penalties or sanctions shall be imposed as a result thereof. Such causes
beyond Grantee's reasonable control and not reasonably foreseeable shall include, but not be
limited to, any acts of God, civil emergencies, labor unrest, strikes, utility interruptions,
inability to obtain access to an individual's property on reasonable terms, and any inability of
a Grantee to secure all required authorizations or permits to utilize necessary poles or
conduits, so long as Grantee uses due diligence to timely obtain said authorization or permits.
•
Cable Commu• tions Franchise Ordinance
November 12, 2003
Page 58
aaaaa. Application: All of the provisions of this Ordinance shall be applicable to all
Cable Operators, Cable Systems, OVS Operators and OVS Systems to the greatest extent
permissible under applicable law.
bbbbb. Severability. If any provision, of this Ordinance is determined to be void or
invalid by any administrative or judicial tribunal, said provision shall be deemed severable
and such invalidation shall not invalidate the entirety of this Ordinance or any other provision
thereof.
Section 2. The City Clerk is directed to certify to the passage and adoption of this
Ordinance and to cause it to be published or posted as required by law.
PASSED; APPROVED and ADOPTED this day of 2003.
Mayor
ATTEST:
City Clerk
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss.
CITY OF NEWPORT BEACH )
h , City Clerk of the City of Newport Beach, do hereby certify that the
foregoing Ordinance No. was introduced at a regular meeting of the City Council of
the City of Newport Beach held on the day of 2003, and was
thereafter duly and regularly passed and adopted by the Council of the City of Newport Beach
at its regular meeting held on the day of 2003, by the following
vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Cable Communications Franchise Ordinance
November 12, 2003
Page 59
Said Ordinance has been published or posted pursuant to law. Witness my hand and
official seal of the City of Newport Beach this day of 2003.
City Clerk
'Nov -OT -03 12:58pm From-Regional Engineering
•
- Adelphia
Honorable Mayor and Council Members
City of Newport Beach
3300 Newport Blvd.
Newport Beach, CA 92658-
818 867'8031 T -039 P.o01 F -022
•
ATTAMIENT "C" - AGENDA ITEM 15
November 7, 2003
Via U.S.Mail and Facsimile: 949- 644 -3020
Re: Proposed Newport Beach Cable Ordinance
Dear Mayor Bromberg:
Newport Beach Communications, LLC, locally known as Adelphia Cable
Communications ( "Adelphia'), appreciates the opportunity to present the City with the
following comments regarding the City's proposed amendment to Chapter 5.44 of the
Newport Beach Municipal code entitled "Cable Communications Franchises" (the
"Ordinance "). As you know, we previously provided a copy of the proposed Ordinance,
marked to show those provisions to which Adelphia objected. Although some of our
concerns were addressed in the latest draft Ordinance that we received, there are many
areas where our concerns were not addressed. If the City chooses not to make further
changes to address our concerns, please be advised that Adelphia will be raising these
issues and expect to resolve them in the context of negotiation of a renewal franchise.
Furthermore, in previous conversations with the City, we have clearly stated our position
that the proposed ordinance cannot apply to Adelphia's current operations, but would
only be applicable upon the conclusions of a franchise renewal on terms and conditions
that are acceptable to both parties. Application of the proposed ordinance to Adelphia's
current operations, absent a franchise renewal, would constitute a fundamental unilateral
amendment of Adelphia's franchise, and as such would violate state and federal
constitutional protections against impairment of contracts and taking of property without
due process and just compensation.
As a threshold matter, Adelphia is disappointed at the unnecessarily regulatory nature of
the proposed Ordinance. The proposed Ordinance is over 40 singlerspaced pages long.
Many of the provisions have added cumbersome procedures for construction,
maintenance and upgrading that will make it nearly impossible to accomplish any
expedient work on our cable system. Adelphia questions whether these procedures also
apply to other users of the public rights -of -way in the City. Because these procedures are
in a cable television ordinance instead of an ordinance of general applicability, we
believe such procedures are unduly discriminatory against cable operators. To the extent
these procedures impose additional costs on Adelphia, which most of them do, that are
not imposed on other users of the rights -of -way, Adelphia believes such assessments
would be deemed franchise fees, causing the City to violate the federal cap on franchise
fees set forth in Section 622 of the Cable Act.
5720 El Camino Reel
CsnEnd, CA 92008-7201
Business Ofilre (760) 438-7741
Customer Serves (760) MI -7000
Fsa (760) A38 -8p81 1
NOU -07 -2003 14 :18 8188678031 ge% P.01
Nov -07 -03 12:58pm From - Regional Engineering
Letter to Mayor Steve Bromberg
November 7, 2003
818 867 8031 T -039 P.00j F -022
•
Furthermore, certain provisions are entirely impracticable and would cause Adelphia to
incur extraordinary costs that appear unrelated to an actual problem. For example,
Section 5.44 080 (v)(8) of the Ordinance requires Adelphia to provide a communication
plan that includes the following:
"A written mailed or hand delivered notification of property owners adjacent to all
Facilities not less than thirty (30) days prior to the installation indicating the proposed
location, a photograph of all above - ground visible equipment from which their size must
be apparent, and a detailed description of the equipment included within the node
including: the electronic components, natural gas generator, electrical fans, and the
anticipated noise levels during winter and summer months and emergency backup,
operations."
Compliance with this requirement would mean that anytime Adelphia constructed any
facilities that involved above ground visible equipment, it would have to send a written
letter 30 days prior to construction to each adjacent property owner, including a
photograph of the cable or other equipment to be installed, a detailed description of such
equipment and anticipated noise levels. To prepare a letter with attachments as required
by the proposed Ordinance and mail it to an unidentified number of property owners
would be unduly burdensome and extraordinarily expensive without any measurable
benefit. Additionally, the provision raises a number of questions. Who are the property
owners who must receive this letter and photograph? If such property owners decided
that they did not want such equipment in their neighborhood, how would the City make
such determinations on a neighborhood -by- neighborhood basis? The placement of above
ground visible equipment is appropriate for the City's generally applicable permitting
process, not a public forum. In addition to our previous comments about unduly
discriminatory procedures, compliance with many of the requirements in the Ordinance,
as discussed herein, will impose.substantial additional costs that may have to be
recovered through increased subscriber rates.
Adelphia is additionally concerned because some of the proposed provisions are
inconsistent with the federal Cable Act. For example, in many cases the Ordinance seeks
to impose requirements in cable franchises that should be a matter for negotiations during
the franchise renewal negotiations under Section 626. As such, the provisions seek to
unilaterally set the terms of Adelphia's renewal without compliance with the standards
and processes of Section 626. City staff has informed us that they do not expect the
franchise renewal negotiations to include any matters already covered in the proposed
Ordinance, except to the extent the proposed Ordinance refers to the franchise agreement.
This further reinforces our concern that the.City is trying to unilaterally set the terms of
the franchise renewal in violation with existing law.
Efforts by local franchise authorities to unilaterally dictate the terms of renewal
franchises have been stuck down as illegal in federal court. For example, in Time Warner
Entertainment Co., L.P. v. Briggs, the federal district court evaluated an ordinance which
sought to dictate the terms of a franchise renewal in advance of the renewal process. The
Court held the ordinance to be preempted by the renewal standards of the federal Cable
2
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Letter to Mayor Steve Bromberg
November 7, 2003
Act. The following comments outline, on a section -by- section basis, Adelphia's specific
concerns and the various legal and practical problems raised by the proposed provisions
of the Ordinance:
Section 5.44.020 Definition of Affiliate.
This provision is inconsistent with the definition of "Affiliate" as it appears in
Section 602 (2) of the Cable Act.
Section 5. 4.020 Definition of Gross Revenues
The amount of a franchise fee, including the definition of gross revenues, is part
of a cable operator's overall renewal proposal under Section 626 and as such cannot be
unilaterally dictated by the City. ht addition, the City's definition is inconsistent with and
exceeds the parameters of a permissible franchise fee under Section 622 of the Cable Act.
Section 5.44.030 (e) Purpose
Under applicable federal law, the franchise agreement should cover all significant
areas of cable operations and will most accurately reflect the meeting of the mind of
Adelphia and the City with respect to renewal. Adelphia believes that any conflict
between the two should be resolved by specifying that the Franchise should control in all
• instances, especially as the City is unilaterally adopting the proposed Ordinance and may
again unilaterally adopt amendments to such that would create conflicts with the
negotiated franchise agreement.
Section 5.44.030 (k) Restrictions Against Transfers
This provision attempts to restrict the subleasing of a portion of the Cable System
in violation of Section 621 (b)(3)(B) of the Cable Act: Adelphia has the Tight under
federal and state law to sublease capacity on its system as a telecommunication or
information service and the City may not impose any requirement in a cable franchise
that has the effect of prohibiting, limiting, restricting or conditioning the provision of a
telecommunication service by a cable operator.
In addition, the City has reserved the right to impose any conditions on the transfer
without limiting such conditions to those that are necessary to insure compliance with the
franchise by the transferee. This would allow the City to unilaterally amend the
franchise, in violation of Adelphia's contractual rights. Franchise agreements are
binding contracts between the City and the cable operator. Through this provision, and
others like it, the City is attempting to preserve for itself the ability to unilaterally dictate
and amend the material terms on which the operator must do business. Such power to
unilaterally dictate or amend the material terms of the agreement between the parties
would render the franchise agreement illusory, and would violate the cable operator's
constitutional rights against impairment of contracts and taking of property.
• Accordingly, the provisions, and other like it, are unlawful and must be removed.
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• •
Letter to Mayor Steve Bromberg
November 7, 2003
Lastly, Adelphia requested two very reasonable provisions that were not included in the
proposed Ordinance. One would have permitted Adelphia to provide a security interest
in the system for the purpose of seeking financing and the other would have permitted a
transfer of the system or franchise to an entity controlling, controlled by or under
common control with Adelphia. Both of these exceptions from the transfer restrictions
are often included in franchises and enabling Ordinances. Adelphia's request that the
Ordinance be modified so that the restrictions in this section apply to the transfer of the
franchise itself and not to the system, that the conditions the City could impose in the
event of a transfer are related to compliance with the franchise and that the two
exceptions requested by Adelphia be inserted in the proposed Ordinance.
Section 5.44.030 (1) Effect of Unauthorized Action
This provision allows the City to impose liquidated damages of up to $5,000 a day for
any unauthorized transfer. The City cannot unilaterally require the imposition or
payment of liquidated damages. Liquidated damages are matters agreed upon by the
parties as a good faith measure of an estimate of the actual harm incurred in the event of a
breach of contract when the actual harm cannot be determined. Indeed, to the extent that
the City seeks to impose "liquidated damages" as a penalty for an alleged failure of
compliance without regard to the actual damage, if any, incurred by the City, those may
constitute unlawful penalties. Restat. 2d of Contracts, § 356, ("A term fixing .
unreasonably large liquidated damages is unenforceable on grounds of public policy as a
penalty.'. Adelphia does not agree that $5,000 a day is ameasure of the actual harm the
City will incur as a result of a breach of the transfer provisions, especially considered the
unwillingness of the City to consider any of the reasonable modifications proposed by
Adelphia, and thus constitutes an unlawful penalty.
Section 5.44.030 (n) Approval Process
Federal law permits the local franchise authority and the operator to negotiate in a
franchise the additional information that may be required in a Form 394 related to
transfers and changes of control. The City may not unilaterally dictate the specific
additional information that an operator may obligated to provide through the adoption
of an Ordinance or modifications to an existing Ordinance. Some of the specific
additional information required by this section, such as the name of each community in
which the transferee or any affiliate owns a franchise, is unduly burdensome and exceeds
the scope of information reasonably necessary to establish the legal, financial and
technical qualifications of the transferee. Furthermore, the City has reserved the right to
delay the start of the federally mandated transfer process until Adelphia has provided all
of the information required by the Ordinance in violation of federal law. If the City is
unwilling to make the changes requested by Adelphia, revisions to this section will be the
subject of franchise renewal negotiations.
Section 5.44.030 (o) Conditions
•
El
NOU -07 -2003 1:4:19 eleRF?RA71 q4z o an
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Letter to Mayor Steve Bromberg
November 7, 2003
• This provision again allows the City to impose conditions in the event of a
transfer. See comments to Section 5.44.030 (k) above. In addition, Adelphia has
requested that the requirement that the transferee sign.a document agreeing to assume all
the terms of the franchise be modified in the case of a change of control. In a change of
control transaction, the franchise entity does not change, only its controlling parent.
changes. In such a case, it is unreasonable to expect the parent company to directly
assume all the conditions of a franchise that it will not directly own.
Section 5.44.030 (p) Reimbursement of Processing and Review Costs
The City cannot unilaterally require the operator to reimburse it for expenses
incurred in transfer or renewal, as such payment would constitute a franchise fee in
violation of Section 622 of the Cable Act and applicable law. The rote inclusion of
introductory phrases, such as "to the extent not prohibited by applicable law", does not
alter the fact that the requirements of this section are prohibited by applicable law and
may not be adopted, since that would essentially require the operator to either challenge
the Ordinance or risk a claim of violation for failure to pay the City's costs under the
terms of this section. See 7Fme Warner Entertainment Co. v. Briggs, C.A. No. 92-
40117-GN, 1993 U.S. Dist. LEXIS 1196 (D. Mass. Jan. 14,:1993); Robin Cable Systems
v. The City of Sierra Vista, 842 F.Supp. 380 (D.Ariz. 1993); Birmingham Cable
Communications v. City of Birmingham, CV 87-L-0,755-3,1989 U.S. Dist. LEXIS 7475
• (N.D. Ala. May 5, 1989); Application of Garden State Cablevision, L.P. for Renewal of a
Certificate of Approval for the Borough of Hadden Heights, OAL Docket No. CTV-
022115-93S; BRC Docket No. CE 92090108 (N.J. Office of Adrnn. Law, Feb. 22, 1994.
section 5.44.040 Place of Inspection
This provision gives the City the right to demand access to Adelphia's book and
records `reasonably necessary for the exercise of Grantor's regulatory authority."
Adelphia is willing to provide access to books and records that are necessary to "monitor
compliance with the terms of the franchise and Ordinance" and objects to the broad
standard for access mandated by this provision. At a minimum, this provision should be.
modified so that it applies to Grantor's regulatory authority "pursuant to this Ordinance
and the franchise."
Section 5.44.050 Rights of Subscribers
Cable companies are subject to comprehensive federal regulation concerning
consumer privacy that requires any local regulation to be consistent with the federal
scheme. In particular, Section 631 of the Cable Act allows local franchise authorities to
enact laws "consistent with this section for the protection of subscriber privacy" This
section violates federal law as it contains provisions that are inconsistent with such
federal law. Furthermore, this provision applies to persons and entities that are not the
cable operator in the City, including any director or stockholder who may "own, hold or
control any corporate stock" There is no rational basis for making this provision
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• 1
Letter to Mayor Steve Bromberg
November 7, 2003
binding upon third parties whose only relationship with Adelphia is through ownership of
stock.
Section 5.44.050 (f) Subscriber Bill of Rights
Federal law requires that the operator provide an annual privacy notice to
subscribers. Adelphia provides this notice in accordance with such law. This provision
requires Adelphia to obtain the approval of the City to the contents of its federal privacy
notice, which imposes additional operational costs and burdens on Adelphia without any
measurable benefit to subscribers from this micromanagement by the City.
Section 5.44.060 Finance
This provision allows the City to charge the greater of an,interestrate of the prime
rate plus I% or $5,000 per month, or any portion of month, for any late payment of
franchise fees, plus an additional 5% if such payments are more than 60 days late. If a
franchise fee payment was one day late under this provision, the City could charge
Adelphia $15,000 for the Three months that each quarterly franchise fee payment
includes. As Adelphia's quarterly payments are approximately $170,000 per quarter, this
would amount to a quarterly interest rate of approximately 8% (or an annual rate of 32 %)
in violation of state law. Adelphia does not agree that this is a reasonable measure of the
City's damages for late payment of franchise fees and, accordingly, such requirement is
an unlawful penalty in violation of applicable law. See comments on Section 5.44.030 (l)
above_
Section 5.44.070 (g)(2) and (3) Installations
These provisions require Adelphia to advise each subscriber that such subscriber
has the right to require that installation be done over any route on the subscriber's
property and in any manner, which is technically feasible and consistent with proper
construction practices. Adelphia has objected to this provision as unduly burdensome
and unnecessary. Asa practical, matter, we discuss the proposed route with the
subscriber in advance and if the subscriber has a. concern -with the route, we work with
the subscriber to work out an acceptable solution. If the subscriber chooses a route that is
different from a,standard installation route, the subscriber is informed of the additional
costs and can choose such route or the original route proposed by the Company.
Furthermore; subsection (3) sets forth the terms of a standard installation that are contrary
to federal law and constitute impermissible rate regulation.
Section 5.44.080 (d)(6) System Construction
This provision unreasonably requires the operator to guarantee the integrity,
durability and structural integrity of any street cuts for the life of the street. Adelphia
questions whether this is a requirement for all users of the public rights -of -way and
believes that is a discriminatory requirement that is being applied to Adelphia in the
proposed Ordinance. There are many factors, other than street cuts made by Adelphia,
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that affect the life of a particular street and Adelphia should not be obligated to guarantee
something over which it has no control.
Is
Section 5.44.080 (m) Repair of Streets and Public Ways
This provision is another discriminatory requirement imposed on Adelphia in the
proposed Ordinance. This section, allows the City Engineer to require Adelphia to
"overlay or slurry -seal" the entire width of a street in which it has made a street cut,
trench or excavation for the entire length of the project, or, after completion of such
work, to subsequently overlay or slurry -seal to streets to maintain the "aesthetics or
structural integrity" of the streets. Thus, if Adelphia cut a 6-inch trench right next to a
curb, the City Engineer could require the company to overlay or slurry -seal the entire
street, at the time of construction and again subsequent to such construction_ This could
add enormous costs to Adelphia's construction. Furthermore, these costs can be passed
on to subscribers as franchise related external costs. While Adelphia objects to these and
other unduly discriminatory provisions in the Ordinance regarding use of the rights-of-
way, we would suggest to the City that these provisions be removed from the cable
Ordinance and put into an ordinance that would be generally applicable to all users of the
public rights -of way..
Section 5.44.080 (t)(2) Payment of Fees
This provision requires Adelphia to pay the City's permit fees and additional costs'
to cover the City's labor, supervisory and overhead costs. Adelphia objects to these
payments and questions whether the City isn't recovering its costs twice, once through
the permit fees and once through these so -called "Labor Payments." Cable operators pay
franchise fees of 5 % of gross revenue as compensation for use of the rights -of -way. To
the extent this assessment is applied to cable operators and not other utilities, it would be
deemed a franchise fee under Section 622 of the Cable Act and violate the 5 % limitation
set forth therein.
Section 5.44.080 (t)(3) Payment of Fees
This provision allows the City to hire contractors to carry out any required
work under the Ordinance and obtain reimbursement from Adelphia for these costs. If
this provision is intended to give the City this right, after it has given Adelphia written
notice of its obligation to make necessary repairs and Adelphia has failed to make such
repairs on a timely basis, the provision should be redrafted accordingly. Otherwise, this
provision gives the City the right To hire contractors at any time, at Adelphia's sole
expense, to perform work that Adelphia would otherwise be capable of performing.
Section 5.44.080 (t)(4) Payment of costs
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This provision allows the City to hire an independent contractor, at AdelphWs
expense, in lieu of making the Labor Payments to which Adelphia has previously
objected. See our objections to Section 5.44.080 (t)(2) above.
Section 5.44.080 (v) Construction Notification
Adelphia objects to many provisions of this section of the proposed Ordinance. In
general, Adelphia believes that the requirements of this section are unduly
discriminatory, as they appear to apply only to cable operators and not other users of the
rights -of- -way.. See comments to Section 5.44.080 (t). In addition, the provisions of this
section create unduly burdensome procedures for construction which we believe are
unnecessary, will delay any construction and add excessive costs without any real
corresponding benefit to our customers, whose rates may rise due to these requirements.
Specific objections include subsection 3, which requires Adelphia to provide maps 90
days in advance of underground construction, which the City can share with other parties.
Adelphia is concerned that this provision duplicates other mapping requirements in
subsection 9 and;mayrequire it to provide proprietary information that the City can share
with other parties, including competitors. Adelphia also objects to subsections 4 and 7,
which require that traffic control plans and noise studies be submitted, sometimes up to
190 days in advance of construction and subsection 10 which requires Adelphia to certify
that its facilities located within any street improvement project undertaken by the City
require no further construction for aperiod of three years.
Subsection 8 is the most troubling of these provisions, as described in the beginning of
this letter and represents unnecessary micromanagemeni of our business: by the City. This
subsection requires the operator to mail or hand deliver notification to property owners
adjacent to all "Facilities" — defined in the proposed Ordinance as any equipment,
including conduits, cable, cabinets, nodes, structures, headed equipment, receive only
earth stations, down link equipment and antennas, electronics, fiber cable, coaxial cable,
drops and switching equipment — whenever it proposes to install any above ground
equipment The notification must include the proposed location, and a photograph of all
above ground visible equipment, together with a detailed description of the equipment
and anticipated noise levels during, winter and summer and emergency backup operations.
First, who are the property owners adjacent to all such "Facilities? Does Adelphia have
to provide photographs of all above ground visible electronics, such as amplifiers, that
may be placed on poles? How will the City respond to objections from such notified
property owners? Does the City require all other users of the rights -of -way to notify .
adjacent property owners when such users install any above -ground equipment? Adelphia
does not believe that it will be able to comply with this overly burdensome and
unnecessary regulation and, if forced to, will pass onto its cable customers the additional
costs that it incurs in attempting to comply.
Lastly, Adelphia objects to subsection 9 regarding maps and plans. This requires
Adelphia to furnish as -built construction drawing, which can be integrated in the City's
GIS system. While we do maintain as -built maps at our. system, which the City can come
and inspect, we consider such maps to be proprietary as they contain information about the
location of our electronics, which competitors could use to their advantage in building a
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November 7, 2003
competing system. These maps, if publicly available, also raise issues of the security of our-
cable system from vandalism. Furthermore, Adelphia can provide maps in a Focus format
and has provided such maps in this format for many years to the City, but not in a G1S
format. Lastly, this subsection requires Adelphia to "pothole its Facilities." Given the
extraordinary broad definition of "Facilities", as discussed above, we are unsure what this
requirement means.
Section 5.44.090 (a) Customer Service
There are several issues raised in this section that are matters for determination
during renewal under the standards of Section 626 of the Cable Act and thus cannot be
unilaterally imposed by the City. For example, the requirement in (a)(1) for an office
located in the City is an issue for evaluation under Section 626, as it is effected by the
community need and impacts the level of investment necessary and the cost to the operator.
In addition, the customer service standards exceed the FCC customer service standards.
For example, the standards proposed in the Ordinance do not measure these standards under
"normal operating conditions", as do the FCC regulations, thus exposing Adelphia to
liability for issues outside of its control. Under FCC regulations, Adelphia may pass through
to subscribers any costs incurred in order to meet customer service standards in excess of the
federal standards. (C.F.R76.925).
Section 5.44.090 (c) System Technical Data
This provision requires Adelphia to provide the City data, in a form approved by
City, which details all of the company's equipment and facilities and their geographic
location in the City. Adelphia objects to this provision, as it requires it to provide
proprietary information and is duplicative of other requirements in the proposed Ordinance.
-See comments to Section 5.44.080 (v)(9) above..
Section 5.44.090 (i) Installations
The requirements of this section, which obligates Adelphia to provide a credit of one
month of basic cable service if it is unable to perform an installation within 9 days of a
request by a subscriber, imposes an unlawfiil penalty and may have the City unlawfully
exercising regulation of Adelphia's rates. A free month of basic cable service is not
necessarily related to the actual harm incurred by a subscriber for an installation that is not
performed within 9 days. Adelphia previously proposed a $20.00 credit for installations that
are scheduled more than 9 days after a subscriber's request and suggests that the City
substitute this proposed credit for the penalty provision of this section.
Section 5.44.0900)(10) Automatic Credits
This provision obligates Adelphia to provide an automatic credit to subscribers who
experience an outage of any premium service for 24 hours or more that affects the entire
franchise area or "other discrete areas ". Adelphia is able to provide an automatic credit for
such outages when they occur in the entire franchise area, but is not able to provide
W
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automatic credits on a neighborhood basis, which this section would require. Adelphia is
willing to accept this provision, and is able to comply with it, if it refers to outages that
affect the entire franchise area.
Section 5.44.090 (( G1) Credits
This requires Adelphia to provide credits upon the request of subscribers for outages
of four or more hours. Adelphia requested a slight modification to this provision so that if it
has provide an automatic credit to a subscriber under the preceding subsections 9 or 10, it
would not be obligated to provide an additional credit under subsection 11. We are puzzled
as to why the City has refused to add this reasonable additional sentence to this provision.
Section 5.44.090 (k) Service Appointments
Adelphia objects to the requirement that it provide a credit equal to one free month
of basic cable service for missed appointments instead of the $20 credit that it hag
voluntarily provided See comments to Section 5.44.090 (i) above.
Section 5.44.090 0) Notices and Customer Communications
Federal law requires Adelphia to send out an annual notice to subscribers containing
information about a variety of system practices. This section repeats many of the
requirements of the federal notice, but adds additional provisions in subsections b., c. g., i.
and j., which are not part of the annual notice but are otherwise provided to subscribers as
part of their installation packets (subsection b.), monthly bills (subsections i. and j.) orrate
notifications (subsection g.) or are inapplicable (maintenance policies in subsection c,). To
the extent Adelphia has to create a customized annual notice for subscribers in Newport
Beach, it will pass the costs of such customization on to its subscribers. We recommend that
the City conform this provision to federal law or refer to the federal law requirement in lieu
of this provision.
Section 5.44.090.(m) Disconnection of Service
This provision sets forth limitations on assessment of late fees. Late fees are a
matter of California state law, which may change from time to time during the life of this
Ordinance, and specific requirements with respect to late fees should not be part of this
proposed Ordinance.
Section 5.44.090 (o) Rate, Fees and Charges
F-022'
This section restricts Adelphia from charging fees for service calls to subscribers in
certain instances and, as such, involves unlawful rate regulation. The inclusion of the phrase
"except to the extent expressly permitted by law" does not alter the fact that this section is
prohibited by Section 623 of the Cable Act and may not be adopted, as it would require the
operator to prove that such fees are expressly permitted by law.
10
NOU -07 -2003 14:21 eiees? 3031 99% P.10
0
•
Nov -07 -03 ,01:02PT From-Regional Engineering 918 967 9031 T -039 P.011/012 F-022
• •
Letter to Mayor Steve Bromberg
November 7, 2003
Section 5.44.090 (r)
pursuant to our meeting of several weeks ago, the reference to "Appendix C" wm .
to have been replaced with "Ordinance" as there are no Appendices to this Ordinance.
Section 5.44.110 Termination and Related Rights
Adelphia objects to this entire section and has suggested reasonable modifications
that would permit the City to assess liquidated damages in amounts to be negotiated in the
franchise for violations of material provisions of the franchise. Revocation provisions
would be limited to breaches of the most essential provisions of the franchise. This Section,
however, would, permit the City to seek revocation for any number of issues under the
franchise or proposed Ordinance; which we believe is a violation of due process as it allows
arbitrary revocation for Ordinance provisions unilaterally adopted by the City. We urge the
City to review our proposed changes, as provided previously.
Section 5.44.110 (bx2) Termination and Related Rights
The City may not unilaterally dictate that an operator continue to provide service
after terminating of the franchise and certainly may not dictate the terms and conditions
® under which the operator provides such service if it agrees to continue operating. While
Adelphia may agree to do so, it is a matter for negotiation between Adelphia and the City,
not for unilateral imposition.
Section 5.44.110 (b) (7)
We do not understand the reference to Section 13 in this subsection. Furthermore,
the City may not unilaterally dictate its ability to acquire ownership of the system in the
event of termination and may not dictate the terms of such acquisition, such as the
requirement that the City not be obligated to assume any "collective bargaining
agreements." While Section 627(b) of the Cable Act addresses what price would be paid if
the City did acquire the system in the event of termination, it is not an affirmative grant of
authority to acquire the system under such circumstances. The ability of the City to
purchase the assets of the system would be a matter for negotiation.
Section 5.44.130 Records, Reports, Right to Inspect, etc.
Adelphia objects to provisions of this section that give the City broad authority to
inspect and copy its books and records, specifically prohibits any exceptions for confidential
and proprietary information, requires certifications of books and records from officers,
directors and employees of Adelphia, obligates Adelphia to pay the costs of auditing
consultants in violation of the franchise fee limitations of Section 622 of the Cable Act,
allows the City to employ consultants at Adelphia's expense (also in violation of Section
622) and requires Adelphia to provide certified financial statements. The provisions are
11
NOU -09 -2003 14:22 sise678031 99% P 11
Nov -07-03 01:02pm From-Reaional Engineering 818 867 8031 T -039 P.012/012 , F -022
Letter to Mayor Steve Bromberg
November 7, 2003
overly burdensome, unnecessary and violate the franchise fee limitations of Section 622 of
the Cable Act See also comments to Section 5.44.030 (p).
Section 5.44.140 (e-g) Continuity of Service and Operation by Grantor
The City may not, unilaterally dictate that an operator provide continuity of service
after revocation and may not dictate the terms and conditions of such service, nor give the
City the right to manage and make changes in the System, if the system is down for 72 hours
through the fault of the operator. See comments to Section 5.44.110 (b)(2).
As indicated, Adelphia objects to the City's approach to seek to govern cable
television through unilateral actions in an Ordinance. In the Cable Act, Congress
recognized that franchise agreements, which are by definition bilateral documents reached at
the agreement of both patties, were to be the mechanisms for local regulation of cable
television. The City's desire to tutilaterallycontrol many of the terms and conditions by
which cable operators do business is inconsistent with Congress' intention that bilateral
franchise agreements be the mechanism for local involvement and the fundamental goal of
assuring stability and certainty to cable operator's operations.
We appreciate the opportunity to comment on the proposed Ordinance. As we hope these
comments make clear, however, there are problematic provisions in the current draft We
appreciate the changes that the City did make from the first draft of the proposed Ordinance
and urge the City to table the Ordinance and allow for further communication regarding •
appropriate resolution of these issues.
If you have any questions regarding this matter, please contact me at 760 - 438-7741,
extension 241.
"z
Phil Urbina
Government Affairs Manager
Adelphia .Communications
Cc: Mayor
City Council
William Marticorena, Esq.
Ms. Nancy Stinson
Martha Hudak, Esq.
12
NOU -07 —.2003 14:22 6188676031 987 P.12
Cable Communications
Franchises Ordinance
Newport Beach City Council
Wednesday, November 12, 2003
0
What Well Cover
Quick history
Existing Ordinance
• Franchise Agreement vs. Franchise Ordinance
• Why NB is different from many other cities
• Telecom Committee
• What cities can and cannot do (!!)
• Tasks completed, tasks pending
What's in the proposed ordinance
. What franchisees have said
What's next?
For more information
Quick History
Existing Franchise Ordinance (along with 2 existing
Franchise Agreements) was approved in 1966 then
amended several times.
• Both Ordinance and FAs are outdated
• Changes to Federal Law (1984, 1992, and 1996) have pre-
empted, . portions of the existing ordinance and FAs.
Franchise Agreements with Adelphia and Cox both
expire in January 2004.
0
Quick Definitions
Franchise Ordinance (tonight's subject)
. A document not specific tc
reflects federal, state, and
environment to describe tl"
cable provider must follow
in the city.
any company that
local regulatory
e practices that any
when doing business
Franchise Agreement (later in 2004)
. An agreement between a city and a specific cable
company that permits the cable company to use
public rights -of -way to operate a cable system.
Sets forth adequate compensation to the public
for this private use of public land.
Quick History
City Council formed Telecom Committee in November 2000 —
it was charged with: •
Update the NBMC relating to:
• Cable Communications
• Wireless Telecom
• General use of City right -of -way
. Adopt a policy on the use of city facilities for wireless telecom
sites;
• Revise /renew Franchise Agreements with existing cable
providers; and
• Educate the public as to what cities can and cannot do relating
to Cable N and Internet Service.
Telecom Committee is:
. John Heffernan (Chair), Richard Nichols, Don Boortz, Leslie
Daigle
Quick History
What Cities Can and Cannot Do
Today's environment = The market controls rates.
• Cities ("LFAs'� no longer regulate
service tier [channels 2 -13]);
• Congress has fully deregulated al
March 1999, saying that satellite
directly competes with Cable N.
rates (exception: basic
other tiers effective
service effectively &
Cable TV in Newport Beach is NOT a govt- controlled
monopoly (even though it may seem that way):
• City's franchise agreements are non- exclusive.
• Cable companies own the `plant" (cable in the ground)
• Denim of renewal is extremely difficult, rare, and expensive.
Internet service is NOT regulated by FCC or cities
i.e. Internet over cable is unregulated — FCC says you have
alternatives in DSL, dial -up, etc.
Why Newport Beach is special
Adelphia filed for Chapter 11 (reorganization) in
June 2002
Most cities don't have 2 cable companies. In
Newport Beach, the 2 don't directly compete.
. Direct competition is rare!
• Cable companies own the cable in the ground.
• Competitors (called "overbuilders'� can come into the city, get
a franchise agreement, and dig up the streets -- but it's
expensive for them to do so & they have no subscriber base.
. Split is roughly Adelphia 2 /3ras and Cox 1 /3rd
• Adelphia Territory = Peninsula, BI, SAH, most of the area
west of Jamboree and coastward of 5th Ave in CDM
• Cox Territory (former Irvine Ranch) = Newport Center, One
Ford Road, Port Streets, Harbor View, Newport Ridge, Bonita
Canyon, Promontory Pt, Newport Coast, Newport North (see
map on next slide)
Cable TV Franchise Areas
�l
p�
City of Newp( --)rt Beach
r —i
Ij
Adelphia
Attn: John Manoro
1830 F. Warner Ave.
Santa Ana, CA 92708
(714) 338-2081
(714) 540 -4783 FAX
C" Colmuwrieatiuns
Attn: Linda Tessier
29947 Avenida degas Banderas
Ram ho Santa Marquenta, CA ..92688
(949) 546-2E90
cr Miles Wilson
(949) 546 -2605
December 2, 2002
7t.
-�� ,f"` Cd17).e [`0717�1a71y
,ate
-
i a �
tlab 4
Yrdn4"LL'
e
4
p4 +;. IP eu
?iF" ..0J
g� 5 :^xs .54.twm45 163 -
i fr
,rile. �.• t % ' 1.V, .
GdaTV Naas leXxrmitl
Tasks completed, tasks pending
Update the NBMC relating to:
• Cable Communications (tonight & next time)
• Wireless Telecom (done)
• General use of City right -of -way (last task)
• Adopt a city policy on the use of city facilities for
wireless telecom sites (done)
• Revise /renew Franchise Agreements with existing
cable providers
• Community Needs Assessment (done)
• Statement of Minimum Goals (done)
• Discussions with Adelphia and Cox (underway)
Educate the public about regs relating to Cable N
and Internet Service (never-ending)
Ll
What's in the proposed ordinance...
Definitions. Sets forth and updates definitions used in the Cable
Communications industry.
Authorization. Authorizes the City to grant non - exclusive franchises for cable
communications services.
Rights. Reserves certain rights to the City and the cable subscriber; reserves
certain rights for the Franchisee;
Finances. Explains how payments to the City are made in exchange for a
cable company's use of the public right -of -way; requires a performance bond
Services. Explains the services that can be required of a provider;
Construction. Describes the construction standards that a provider must
meet;
Customer Service. Describes the customer service obligations of a provider.
Records Inspection, Audit. Allows for the City's inspection of certain records,
allows for the conduct of a bi- annual audit;
Termination. Describes reasons for termination and process to terminate; and
More.
Provider Review and Comment
City staff team (Marticorena, Clauson, Kiff, Jackson) ? 0
met with Cox and Adelphia in October after providing
the ordinance to them in advance. We amended the
proposed ordinance to reflect some of their
comments.
In this version before you:
• Cox = no formal comment
• Adelphia = provided comments via a letter
•
Provider Review and Comment
Locations where ordinance (or one very
similar to it) is in place:
• San Clemente
• Lake Forest
• Dana Point
• San Juan Capistrano
• Laguna Beach
• Laguna Niguel
• Moreno Valley
•
What's Next
• 1St reading tonight
• Amend, if necessary
• 2nd reading & adoption on Nov. 25 or Dec. 9
• Ordinance takes effect 30 days from adoption
• Focus on Franchise Agreement renewals based on:
• Adopted Ordinance
• Statement of Minimum Goals
• At least 2 Telecom Committee meetings (noticed and open •
to the public) + Council hearing.
• Anticipate completion of FAs in Spring 2004
Last Telecom Committee task = Right -of -Way
Ordinance (not cable- specific)
f
For more information...
www.fcC.gov
. Download the PDF files on:
• Cable deregulation
• Internet service providers
www.adelphia.net or www.cox.com
www. city. newport- beach. ca. us
• For Telecom Committee information
• For older staff reports on telecom & cable issues
Call or E -mail the Opinion Line
. 949- 644 -3001
. Opinions (a)-city.newport- beach.ca.us
%E
•
MIN
# of cable drops in Franchise Area
# of cable?T1/subscribers
of cable drops who take cable
# of cable Internet subscribers
% of cable drops who take cable Internet
30,985 I 1
18,199 ..M 1
59%
75 %,
164 %i
360
12,856 ,v
39 %'
290/
- 1999 11 656,558 1 $ 281,631 i $ 938,189 1
2000 $ 722,714 1, $ 332,426 s $ 1,055,140
2001 $ 705,709 $ 227,319 $ 933,028
- 2002 641,099 $ 446,326 �� $ 1,087,425
�... ...v rte.
--1999
$
53,220_( $ 25,608
$
78,82_8
79,544 c $ 43,485
$
123,029
35,589 $ -
$
35,589
— 2002
$
$
$
w
Companies stopped collecting Franchise Fees on Data after Portland
decision.
0
0
® • (4a-)
CITY OF NEWPORT BEACH
CITY COUNCIL STAFF REPORT
Agenda Item No. 15
April 8, 2003
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY
FROM: City Manager's Office `i163
Dave Kiff, Assistant City Manager ''
Marilee Jackson, Public Information Officer
949/644 -3002 or x3031 or dkiff@ ormvjackson @city.newport -bea h.ca.uAPPROVEC
SUBJECT: 'Statement of Minimum Goals - Cable Franchise Negotiations
ISSUE:
Should the City Council direct its cable franchise negotiator to negotiate with Adelphia
and Cox based on the attached Statement of Minimum Goals?
RECOMMENDATION:
Adopt the Statement of Minimum Goals and direct the City's franchise negotiator, Mr.
William Marticorena of Rutan and Tucker, to begin discussions with Adelphia and Cox
based on the Statement.
DISCUSSION:
Cable television is an industry that has seen more changes in recent years than
possibly any other industry. Cable providers, which have merged and swapped
customers on a huge scale in recent years, can do much more than just cable TV. They
can provide high -speed data (Internet), pay- per -view and movies -on- demand, telephone
service, and hundreds of channel choices (all at a price).
When Congress passed the Telecommunications Act of 1996, it declared the cable
television industry would be subject to "effective competition" from satellite dish
services. In passing this Act, Congress thus deregulated rates and as a result, rate
increases have been steady, especially where the digital tier of services is offered in
addition to analog channels. Cities no longer have any control over the setting of most
cable rates.
Newport Beach holds two "non- exclusive" franchise agreements with its two cable
companies -- Adelphia (formerly Comcast) and Cox Communications. Adelphia
• Stpement of Minimum Goals
April 8, 2003
Page 2
currently serves approximately 17,000 TV subscribers and Cox has approximately
10;000 TV subscribers. These numbers do not include high - speed Internet services.
The Agreements allow the cable companies access to city rights -of -way; but
importantly, the cable companies themselves own and maintain the cable Lines.
Adelphia has about 55% of the city — from Old Corona del Mar coastward of 5"' Avenue
and then west of Jamboree. Cox has the remainder, including the Newport Coast,
Fashion Island, Bonita Canyon and Newport North.
The non- exclusivity means that any cable television service is free to obtain a Cable
Television Franchise from the City and lay their own cable on top of or adjacent to
existing provider -owned cable lines. The costs of digging up streets and laying fiber
optic cable in most cases is significant, so this "overbuilding" is not being done except in
a few cities typically where the existing provider has not upgraded to fiber optic.
Satellite services are competing but in some ways are still not as attractive to viewers
as cable technology.
The City's two franchise agreements expire January 27, 2004. As part of the negotiation
process, the City's cable franchise agreement will also be updated to conform to
changes in federal and state law.
As part of the franchise review and renewal process, the City Council created the
Telecommunications Ad Hoc Committee on November 28, 2000 and charged it with the
following tasks:
A. Ordinance(s) Update — Work with City staff to update the City's Cable
Television Ordinance and to create a separate Telecommunications
ordinance (addressing wireless services, street encroachment fees, City
infrastructure use fees; and antenna siting).
B. Community Needs Assessment — Develop and conduct (with staff or expert
assistance) a Community Needs Assessment.
C. Public Information -- Assist with explanation and community understanding
City's regulatory ability (or lack thereof) regarding Cable Television.
D. Council Policy on Use of City Facilities for Telecommunications --
Develop a Council Policy relating to the manner in which the City reviews and
approves requests for telecommunications infrastructure easements.
The Committee (consisting of Council Members Heffernan and Nichols and two
residents, Ms. Leslie Daigle and Mr. Don Boortz) has been at work on these tasks since
2000. City staff members Dave Kiff, Marilee Jackson, Robin Clauson, and Helen Wick
r(
Stpement of Minimum Goals
April S, 2003
Page 3
have aided the Committee in their effort. Special Counsel Bill Marticorena of Rutan and
Tucker has been with us as well.
The Community Needs Assessment. This Agenda Item is a result of Task B -- the
Community Needs Assessment. A Community Needs Assessment — sometimes called
an Ascertainment — is a process described in federal law but not mandated. Since the
City had never done an Assessment in the City's history, the Committee believed it
important to complete one as the franchise agreements near expiration — especially
since significant technological advancements have developed in cable and Internet
operations.
What is a Community Needs Assessment? A community needs assessment
attempts to determine the community's satisfaction (or lack thereof) with its cable
providers. It also attempts to determine the kinds of cable services that our community
expects— more or less community programming, better government access, a different
menu of channels, and much more.
The City Council, in January 2001, authorized the hiring of The Buske Group of
Sacramento (for about $38,000) to complete the Assessment. The Buske Group's
proposal included:
A statistically -valid telephone survey of cable subscribers
• Structured focus groups of cable user communities — government, education;
business, community groups, and the general public
• Coordination of existing strategic telecommunications and communications plans
of businesses, government, and schools
Special meetings, including at least one public hearing before the City Council
• Personal interviews with key and interested people in the community; and
• A written final report to be presented to the Telecom Committee.
The Community Needs Assessment began in May 2002. It included a series of
community cable focus group workshops addressing future cable service needs in
Newport Beach. The weeklong meetings focused on government agencies, education
and schools, environmental organizations, businesses and business organizations, arts,
culture and heritage groups, sports and recreation organizations and community and
civic organizations.
The Assessment also included an extensive Community Needs & Interests
Questionnaire that obtained information to help identify changes that might be made to
meet future cable - related needs.
Additionally, during the period of April 14 -April
24, 2002,
Group
W Communications
conducted and completed a statistically valid
telephone
survey
of 400 completed
interviews. Group W conducted the interviews
utilizing a
random
sample from active
• Stement of Minimum Goals
April 8, 2003
Page 4
residential telephone listings in both Adelphia and Cox subscriber areas. Cross
tabulation analysis was also conducted utilizing demographic information provided by
respondents. Analysis was also performed to determine significant differences in
responses of Adelphia and Cox subscribers.
Further, the City Council held a publicly noticed meeting in August 2002 to provide the
public with another opportunity to put its comments on the public record. Finally, the
Telecom Committee took public comment about the Assessment and the draft
Statement of Minimum Goals at two separate public meetings (February 10, 2003 and
March 31, 2003). Attachment A is the executive summary of the draft Assessment.
At the February 10, 2003 meeting, representatives of the two cable providers spoke at
some length as to the results of the Assessment. Their comments asserted that:
• The Assessment was not an accurate reflection of the community's needs;
• The Assessment did not specifically ask if subscribers were willing to pay higher
cable bills to accommodate some of the identified programs in the Assessment;
Portions of the questionnaire were flawed.
Both companies later provided written comments that were directed to the Committee.
Ms. Sue Buske of the Buske Group and Mr. Marticorena defended the Assessment and
its methodology by stating that:
The Assessment's questions were standard to many other questionnaires and
assessments that have been supported in court;
Research shows that cable companies do not have to -- nor do they in many
cases -- pass on the costs of community programming to the subscriber in
competitive environments. Both Buske and Marticorena emphasized that "you
can compare two different cities with dramatically different community
programming requirements -- with one city's system being far more expensive to
maintain than another's -- and the cable bill to the subscriber is virtually
identical."
At its meeting in February 2003, the Committee directed Mr. Marticorena to prepare a
Statement of Minimum Goals (SMG) based on his analysis of the results of the
Assessment. The SMG is a document that incorporates the needs of the community
into the negotiating process. The Committee approved this SMG at its meeting on
March 31, 2003 (see Attachment B).
Importantly, the Needs Assessment and the resulting SMG do NOT guarantee that a
cable provider will fully comply with the recommendations of the Assessment. Indeed,
the Assessment's main value is to provide support to the City Council with data to
document the City's negotiating position.
Stpement of Minimum Goals
April 8, 2003
Page 5
What the SMG Says. The SMG suggests that the Assessment has identified the
following (selected) issues as cable - related needs of the community:
• Upgrading cable systems to 860 Mhz;
• An active Emergency Access System (EAS);
An institutional broadband network ( "I- Net ") between government facilities and
schools;
• Full compliance with the FCC's subscriber service standards;
• Support for Public, Educational, and Government (PEG) Access channels;
• A minimum of three PEG channels, with additional channels added as growth
dictates;
Development of and support for a Community Media Center for community
programming;
• Cable connections for remote housing facilities serving homebound seniors;
• Remote- controlled cable equipment for the Council Chambers plus ongoing
support and replacement capacity;
• Live broadcasting of City Council meetings, Planning Commission meetings, and
NMUSD Board meetings;
• Full compliance with FCC regulations, the municipal code, and franchise fee
obligations.
Negotiations Come Next. If the Council approves the SMG and this Agenda Item, Mr.
Marticorena will commence negotiations with Adelphia and Cox for new franchise
agreements. Depending upon the complexity of the negotiations, new agreements may
be ready for Council action late this year. However, because Adelphia is in bankruptcy
and the City is in the unusual position of having to negotiate with two different providers,
the process could take longer.
Committee Action: At its meeting on Monday, March 31, 2003, the
Telecommunications Ad Hoc Committee passed unanimously a recommendation that
the City Council approve the attached SMG.
Environmental Review: The City Council's approval of this Agenda Item does not
require environmental review,
Public Notice: This agenda item may be noticed according to the Ralph M. Brown Act
(72 hours in advance of the public meeting at which the City Council considers the
item).
Funding Availability Not applicable.
0
Submitted by:
Dave I<ff
Assistan ity Manager
SVement of Minimum Goals
April 8, 2003
Page 6
Marilee Jackson
Public Information Officer
Attachments: A --Executive Summary of Draft Community Needs Assessment
B -- Statement of Minimum Goals
• •
CITY OF NEWPORT BEACH
CITY COUNCIL STAFF REPORT
Agenda Item No. 15
April 8, 2003
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: City Manager's Office
Dave Kiff, Assistant City Manager
Marilee Jackson, Public Information Officer
949/644 -3002 or x3031 or dkiff@ or mvjackson @city.newport- beach.ca.us
SUBJECT: Statement of Minimum Goals - Cable Franchise Negotiations
ISSUE:
Should the City Council direct its cable franchise negotiator to negotiate with Adelphia
and Cox based on the attached Statement of Minimum Goals?
RECOMMENDATION:
Adopt the Statement of Minimum Goals and direct the City's franchise negotiator, Mr.
William Marticorena of Rutan and Tucker, to begin discussions with Adelphia and Cox
based on the Statement.
DISCUSSION:
Cable television is an industry that has seen more changes in recent years than
possibly any other industry. Cable providers, which have merged and swapped
customers on a huge scale in recent years, can do much more than just cable TV. They
can provide high -speed data (Internet), pay - per -view and movies -on- demand, telephone
service, and hundreds of channel choices (all at a price).
When Congress passed the Telecommunications Act of 1996, it declared the cable
television industry would be subject to "effective competition" from satellite dish
services. In passing this Act, Congress thus deregulated rates and as a result, rate
increases have been steady, especially where the digital tier of services is offered in
addition to analog channels. Cities no longer have any control over the setting of most
cable rates.
Newport Beach holds two "non- exclusive" franchise agreements with its two cable
companies -- Adelphia (formerly Comcast) and Cox Communications. Adelphia
• St�°iement of Minimum Goals
April 8; 2003
Page 2
currently serves approximately 17,000 TV subscribers and Cox has approximately
10,000 TV subscribers. These numbers do not include high -speed Internet services.
The Agreements allow the cable companies access to city rights -of -way; but
importantly, the cable companies themselves own and maintain the cable lines.
Adelphia has about 55 % of the city — from Old Corona del Mar coastward of 5`" Avenue
and then west of Jamboree. Cox has the remainder, including the Newport Coast,
Fashion Island, Bonita Canyon and Newport North.
The non - exclusivity means that any cable television service is free to come into Newport
Beach and lay their own cable on top of or adjacent to existing provider -owned cable
lines. The costs of digging up streets and laying fiber optic cable in most cases is
significant, so this "overbuilding" is not being done except in a few cities typically where
the existing provider has not upgraded to fiber optic. Satellite services are competing
but in some ways are still not as attractive to viewers as cable technology.
The City's two franchise agreements expire January 27, 2004. Both agreements are
extremely dated and contain information and requirements dating back to 1966.
Federal law supersedes much of the text of the Agreements.
As part of the franchise review and renewal process, the City Council created the
Telecommunications Ad Hoc Committee on November 28, 2000 and charged it with the
following tasks:
A. Ordinance(s) Update — Work with City staff to update the City's Cable
Television Ordinance and to create a separate Telecommunications
ordinance (addressing wireless services, street encroachment fees, City
infrastructure use fees, and antenna siting).
B. Community Needs Assessment — Develop and conduct (with staff or expert
assistance) a Community Needs Assessment.
C. Public Information -- Assist with explanation and community understanding
City's regulatory ability (or lack thereof) regarding Cable Television.
D. Council Policy on Use of City Facilities for Telecommunications --
Develop a Council Policy relating to the manner in which the City reviews and
approves requests for telecommunications infrastructure easements.
The Committee (consisting of Council Members Heffernan and Nichols and two
residents, Ms. Leslie Daigle and Mr. Don Boortz) has been at work on these tasks since
2000. City staff members Dave Kiff, Marilee Jackson, Robin Ctauson, and Helen Wick
have aided the Committee in their effort. Special Counsel Bill Marticorena of Rutan and
Tucker has been with us as well.
• Stoment of Minimum Goals
April 8, 2003
Page 3
The Community Needs Assessment. This Agenda Item is a result of Task B -- the
Community Needs Assessment. A Community Needs Assessment — sometimes called
an Ascertainment — is a process described in federal law but not mandated. Since the
City had never done an Assessment in the City's history, the Committee believed it
important to complete one as the franchise agreements near expiration — especially
since significant technological advancements have developed in cable and Internet
operations.
What is a Community Needs Assessment? A community needs assessment
attempts to determine the community's satisfaction (or lack thereof) with its cable
providers. It also attempts to determine the kinds of telecommunications and cable
services that our community expects — more or less community programming, better
government access, a different menu of channels, and much more.
The City Council, in January 2001, authorized the hiring of The Buske Group of
Sacramento (for about $38,000) to complete the Assessment. The Buske Group's
proposal included:
A statistically -valid telephone survey of cable subscribers
Structured focus groups of cable user communities — government, education,
business, community groups, and the general public
Coordination of existing strategic telecommunications and communications plans
of businesses, government, and schools
Special meetings, including at least one public hearing before the City Council
Personal interviews with key and interested people in the community; and
A written final report to be presented to the Telecom Committee.
The Community Needs Assessment began in May 2002. It included a series of
community cable focus group workshops addressing future cable service needs in
Newport Beach. The weeklong meetings focused on government agencies, education
and schools, environmental organizations, businesses and business organizations, arts,
culture and heritage groups, sports and recreation organizations and community and
civic organizations.
The Assessment also included an extensive Community Needs & Interests
Questionnaire that obtained information to help identify changes that might be made to
meet future cable- related needs.
Additionally, during the period of April 14 -April
24, 2002,
Group W Communications
conducted
and completed a statistically valid
telephone
survey of 400 completed
interviews.
Group W conducted the interviews
utilizing a
random sample from active
residential
telephone listings in both Adelphia
and Cox
subscriber areas. Cross
tabulation
analysis was also conducted utilizing
demographic
information provided by
J
Stement of Minimum Goals
April 8, 2003
Page 4
respondents. Analysis was also performed to determine significant differences in
responses of Adelphia and Cox subscribers.
Further, the City Council held a publicly noticed meeting in August 2002 to provide the
public with another opportunity to put its comments on the public record. Finally, the
Telecom Committee took public comment about the Assessment and the draft
Statement of Minimum Goals at two separate public meetings (February 10, 2003 and
March 31, 2003). Attachment A is the executive summary of the draft Assessment.
At the February 10, 2003 meeting, representatives of the two cable providers spoke at
some length as to the results of the Assessment. Their comments asserted that:
The Assessment was not an accurate reflection of the community's needs;
The Assessment did not specifically ask if subscribers were willing to pay higher
cable bills to accommodate some of the identified programs in the Assessment;
• Portions of the questionnaire were flawed.
Both companies later provided written comments that were directed to the Committee.
Ms. Sue Buske of the Buske Group and Mr. Marticorena defended the Assessment and
its methodology by stating that:
The Assessment's questions were standard to many other questionnaires and
assessments that have been supported in court;
Research shows that cable companies do not have to -- nor do they in many
cases -- pass on the costs of community programming to the subscriber in
competitive environments. Both Buske and Marticorena emphasized that "you
can compare two different cities with dramatically different community
programming requirements -- with one city's system being far more expensive to
maintain than another's -- and the cable bill to the subscriber is virtually
identical."
At its meeting in February 2003, the Committee directed Mr. Marticorena to prepare a
Statement of Minimum Goals (SMG) based on his analysis of the results of the
Assessment. The SMG is a document that incorporates the needs of the community
into the negotiating process. The Committee approved this SMG at its meeting on
March 31, 2003 (see Attachment B).
Importantly, the Needs Assessment and the resulting SMG do NOT guarantee that a
cable provider will fully comply with the recommendations of the Assessment. Indeed,
the Assessment's main value is to arm the City Council with data enough to defend the
City's negotiating position. The possibility always exists that a cable provider may
disregard the wishes of the Council and the community and yet receive a new franchise
anyway.
• Stfinent of Minimum Goals
April 8, 2003
Page 5
What the SMG Says. The SMG suggests that the Assessment has identified the
following (selected) issues as cable - related needs of the community:
• Upgrading cable systems to 860 Mhz;
• An active Emergency Access System (EAS);
An institutional broadband network ( "I- Net ") between government facilities and
schools;
• Full compliance with the FCC's subscriber service standards;
• Support for Public, Educational, and Government (PEG) Access channels;
A minimum of three PEG channels, with additional channels added as growth
dictates;
• Development of and support for a Community Media Center for community
programming;
• Cable connections for remote housing facilities serving homebound seniors;
• Remote- controlled cable equipment for the Council Chambers plus ongoing
support and replacement capacity;
• Live broadcasting of City Council meetings, Planning Commission meetings, and
NMUSD Board meetings;
Full compliance with FCC regulations, the municipal code, and franchise fee
obligations.
Negotiations Come Next. If the Council approves the SMG and this Agenda Item, Mr.
Marticorena will commence negotiations with Adelphia and Cox for new franchise
agreements. Depending upon the complexity of the negotiations, new agreements may
be ready for Council action late this year.
Committee Action: At its meeting on Monday, March 31, 2003, the
Telecommunications Ad Hoc Committee passed unanimously a recommendation that
the City Council approve the attached SMG.
Environmental Review: The City Council's approval of this Agenda Item does not
require environmental review.
Public Notice: This agenda item may be noticed according to the Ralph M. Brown Act
(72 hours in advance of the public meeting at which the City Council considers the
item).
Funding Availability: Not applicable.
J
Stement of Minimum Goals
April 8, 2003
Page 6
Submitted by:
I, v
Dav Ki V Marilee Jackson
Assistant City Manager Public Information Offieer
Attachments: A -- Executive Summary of Draft Community Needs Assessment
B -- Statement of Minimum Goals
® DRAFT _ 0
EXECUTIVE SUMMARY
COMMUNITY NEEDS ASSESSMENT
ASCERTAINMENT AND RECOMMENDATIONS REGARDING
COMMUNITY CABLE- RELATED NEEDS AND INTERESTS FOR
NEWPORT BEACH, CALIFORNIA
I. INTRODUCTION
The Buske Group was retained by the City of Newport Beach to conduct a community
needs assessment as a part of the cable franchise renewal process. This needs assessment
was conducted to identify current and future community cable- related needs and interests.
As a matter of federal law, the City's cable- related needs and interests are protected in
part through the franchising process. During renewal proceedings, the City may identify
basic requirements for cable system capacity, functionality, and customer service, and
require the cable operator to provide facilities, equipment and channels for community use.
To identify cable - related needs and interests in Newport Beach, the consultant:
• conducted a telephone survey of Newport Beach cable subscribers;
• conducted a series of eight community leader focus group workshops,
attended by 100 people affiliated with 66 area organizations and institutions;
• distributed questionnaires for completion by focus group participants;
• reviewed strategic plans and other materials submitted by representatives of
local government, educational institutions, and other groups; and
• analyzed all data gathered and prepared this report.
It is wise to use a variety of informational- gathering tools when conducting a needs
assessment in any subject area. However, it is critical to use such a variety of tools when
dealing with an arena driven by future - oriented technology, such as cable communications.
0 DRAFT
The major findings and primary recommendations that arose from the research and
analysis activities conducted by the consultant are provided in the following sections of this
Executive Summary. A more detailed presentation of the analysis and recommendations is
contained in the full Community Needs Assessment report and the telephone survey report.
The City of Newport Beach has previously awarded cable television franchises to two
companies that provide cable service within the city limits: Adelphia and Cox
Communications ( "Cox "). Separate and distinct areas within the City are served by each
company, and no areas have head -to -head competition. Therefore, each household is
limited to the service offered by only one of these companies.
Approximately 26,300 households in Newport Beach currently subscribe to one of the
cable service providers. About two- thirds of the cable subscribers in Newport Beach (roughly
18,000 households) are served by the Adelphia system, with the other third (about 8,300
households) are served by Cox. This represents a market penetration rate (the number of
basic subscribers divided by the number of homes passed by the cable company) of about
65 % for Adelphia and about 78 % for Cox.
11. SUMMARY OF MAJOR FINDINGS
General conclusions from responses to a questionnaire returned by focus group
workshop participants:
• Nearly all of focus group cable subscribers answered either "Yes" (59 %) or
"Maybe" (37 %) when asked if the Adelphia or Cox cable TV service should offer
more channels. Programming types that, they most often said should be more
readily available included local news and activities; educational, and arts /cultural.
Over two- thirds (68 %) of these respondents said " Maybe " or "Yes" when asked if
they would be willing to pay extra to channels devoted to these types of programs.
. -•
• Nearly all (93 %) of the focus group questionnaire respondents said that they have
a home computer, and 99% of them said that it is equipped with a modern. Just
over one -third (35 %) subscribe to the high -speed Internet connection service that
is available through their cable company. Twenty percent of the respondents who
have a home computer and an online connection said they had used it to create a
personal or business "Web site ".
• Of the focus group questionnaire respondents who expressed an interest in
receiving one or more special services via cable (with movies on demand" and
"two -way video teleconferencing" garnering the most interest), 44 % said they
would and 28% said they might be willing to pay extra for these services.
• When provided a list of services which could be received through their TV or home
computer, the following percentages of focus group survey respondents indicated that
obtaining these services was `Important" or "Very Important" to them:
* 93% - Access to Library resources (card catalog, magazine articles, etc.)
* 91% -Access to public safety information (e.g., from police /fire departments)
* 89 %- Access to government information (meeting agendas, reports, etc.)
* 85% - Ability to vote, renew drivers license, obtain government permits from
home
• Nearly all of the focus group cable subscribers answered either "Yes" (84 %) or
"Maybe" (14 %) when asked if they had seen or would be interested in seeing local
cable TV programs about Newport Beach citizens, organizations, community events;
schools, or local government.
Nearly all (92 %) of the focus group respondents who subscribe to the Cox cable
service said they had watched local origination programs on "Cox Channel 3 ". Of
this group, 84% said they had watched this channel between one and five times
during the previous month. When asked if they had watched Newport Beach City
Council meetings on PEG Access cable channel 30, nearly two- thirds (62 %) of the
Cox subscriber- respondents said that they had, and half of this group said they had
watched the meeting coverage more than five times this year.
* DRAFT 0
• All of the focus group respondents who subscribe to the Adelphia cable service
said they had watched PEG Access cable channel 3; where coverage of Newport
Beach City Council meetings and other local programs can be seen. Of this group,
58% said they had watched this channel between one and five times, and another
28% said they had watched it more than 10 times during the previous month.
When asked how often they had watched Newport Beach City Council meetings on
cable channel 3, nearly all (93 %) of the Adelphia subscriber- respondents said that
they had watched at least once, and 55% said they had watched the meeting
coverage more than five times this year.
• Local programming topics that focus group respondents who subscribe to either
the Adelphia or Cox cable TV service most often selected as ones they were "Very
Interested" or "Interested" in seeing included:
• Senior citizen activities and concerns (87 %)
• Information regarding public emergencies (85 %)
• Programs about Newport Beach arts, history and culture (85 %)
• Programs about issues facing City government (85 %)
• Environmental programs (84 %)
• City government meetings (83 %)
• Informational programs about local organizations and clubs (80 %)
• Programs about City government services (80 %)
• When the Adelphia and Cox subscriber- respondents were asked to indicate what
part of their monthly cable bill should be set aside to support the development of
local programming, the average of all responses was $2.38. Over three - fourths of
them (80 %) said two to four dollars per month.
• When all of the focus group survey respondents were asked how important it was
to have cable TV channels that feature programs about Newport Beach residents,
organizations, events, schools, and government, 95 % of them felt it was "Very
Important" (74 %) or `Important' (21%).
• Nearly all (96 %) of the focus group participants said that the organizations that
they are involved with would be interested in having programs about their services
and activities appear on a local cable TV channel.
iv
DRAFT
• A very large majority (84 %) of the focus group participants indicated an interest in
learning how to make a program to show on a local cable TV channel, using
equipment provided free of charge.
During the brainstorming portion of the focus group sessions, participants
identified the following community needs, interests, and concerns:
• When asked to identify the key issues facing Newport Beach, most often
mentioned were concerns relating to:
Energy /Environment (water quality, parks development, preservation of open
space, litter, noise, condition of beaches, improving quality of life)
* Infrastructure /TrafficlTransportation (airport issues; aging infrastructure, traffic
congestion, parking, regional cooperation, highway beautification)
Technology /Communications (delivery of information to community, keeping up
with technology, connectivity to other communities, internet safety issues)
* Growth (growth and development, business flight because of slow growth,
overcrowding)
* Education and Services for Youth /Seniors (school deterioration, adolescent/
teen issues, alcohol abuse, pregnancy, keeping baby boomers' minds active)
Public Safety /Crime (homeland security, emergency safety, crime)
* Economic Development/Cost of Living (business development, cost of water,
tourism)
* Demographic Changes (aging population, language barriers)
Health & Health Services (breast cancer and other health issues)
• When asked about the key challenges faced by public sector agencies, community
organizations, and schools in communicating with their constituencies, the leading
areas identified were:
• Apathy, logistics; insufficient time, no collaboration
• Better oversight and planning for effective use of media
• Lack of effective media outlets
PI
• DRAFT •
• When asked how their organizations or agencies could use cable or PEG Access
to communicate, dozens of program types and concepts were identified. Included
among them were after school programs, beach and surf information, community
forums on local issues, distance learning, emergency information, fire fighter
training, health care education, local sports, community theatre; local history,
parades and community events; public safety programs, and volunteer recruitment.
• When asked what would make it easier for their organization or agency to use PEG
Access or the cable system to communicate, the top categories of need were:
• Bandwidth; infrastructure & system design (e.g., I -Net to connect local
institutions, interconnection, improvements in cable wiring and applications for
schools, ability to transmit "live" programming from various locations in City)
• PEG Access Equipment, Facilities and Channels (e.g., better PEG Access
equipment, a community media center, studio,, PEG Access channels, a mobile
production van)
• PEG Access Staffing, Policies & Procedures, and Funding (e.g., staff to provide
assistance and expertise, responsive nonprofit PEG Access management entity
with visionary leadership, adequate funding to support PEG Access)
• Outreach and Promotion (e.g., establish a program schedule; promote
programs via listings on program guide channel, newspaper, and other cable
channels; show programs on same channel and time on both cable systems)
The primary findings of the telephone survey are as follows:
• Approximately 80 % of the respondents who subscribe to either the Cox or Adelphia
cable service rate the quality of the picture and sound, providing bills that are
accurate and easy to understand and providing cable service with few or no
interruptions as "good" or "very good." However, less than half of these
respondents with an opinion gave a "good" or "very good rating to the overall value
of the cable TV service.
• Adelphia cable subscribers are generally less satisfied than Cox Communications
subscribers with many quality and services measures. Questions pertaining to the
quality of customer service contacts and communications coming from the cable
company appear to elicit the greatest level of disparity between cable providers.
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• DRAFT - •
• Of the respondents who subscribe to either the Cox or Adelphia cable service and
said they had telephoned their cable company during the year prior to the survey
and were put on hold, only about 10 % said they were put on hold for less than 30
seconds. Since such a high percentage of affected respondents said they were
kept on hold for longer than 30 seconds (thereby exceeding the FCC's standards),
further investigation of this matter is warranted.
• A little over four out of 10 Cox subscribers report having watched both Cox
Channel 3 (local origination) and PEG Access cable channel 30. Of those Cox
subscribers who have watched Cox Channel 3, about 15% said they tuned in at
least weekly during the past month and three- fourths said they tuned in at least
once during the past month.
• About eight out of 10 Adelphia subscribers report having watched PEG Access
cable channel 3. Of those Adelphia subscribers who have watched cable channel
3, almost three out of 10 said they tuned in at least weekly during the past month
and well over eight out of 10 said they tuned in at least once during the past month.
• Just over two - thirds of all subscribers believe it is either "important' or "very
important' to have local cable TV channels that feature programs about Newport
Beach residents, organizations; events, . schools, government and community
issues. When they were asked how much of their monthly cable bill should go to
support such programming, the average of all responses was $1.68.
• About three- fourths of all respondents in the city of Newport Beach said that they
had a computer in their home. Of those respondents with a home computer, about
nine out of 10 use it to access the Internet.
• About two- thirds of all respondents rated the ability to have electronic access to
public safety information as "important' or "very important." Electronic access from
home to government information and the ability to vote, renew a license or obtain
permits were both rated as "important' or "very important' by over half of them.
• A little under one -third of Newport Beach subscribers rated movies on demand as
"Important" or "very important' and about two out of 10 rated video teleconferencing as
"important" or "very important." Of those who believe these services to be important or
very important, just under one -third are willing to pay extra to receive them.
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• DRAFT •
Findings based upon review of strategic plans and other materials:
• Documents provided by the City of Newport Beach included the following items of
particular relevance to the Community Needs Assessment:
• The City is especially concerned about and encourages its residents to get
actively involved in the process of envisioning the future of the City.
• Concerns voiced in the City's reports about land /water use, housing
development, tourist accommodation, business growth; and use of natural
resources were also raised by participants of the focus group workshops
conducted by The Buske Group.
• At neighborhood workshops conducted by the City, traffic congestion and
safety, water quality, and preservation of neighborhood character were
mentioned frequently.
• City residents describe Newport Beach as first a "beach town," second a
"residential town" and third as a "tourist destination."
• The Newport Beach Public Library's goal is to become the preeminent library of its
size in terms of community resources and state -of- the -art technological resources.
It has made progress on developing funding sources, increasing the functionality of
the Library website, and improving the computers available for public use, and is
currently working with the City to evaluate the connection between the libraries and
the City network.
• The Corona Del Mar Business Improvement District is working to strengthen the
"village" atmosphere of Corona Del Mar while revitalizing its business district.
The Newport-Mesa Unified School District uses technology in the classroom to
enhance traditional curriculum areas (i.e., providing access to distant information
resources); preparing students to meet the technological demands of the
community and workplace; allowing more students access through virtual /online
classrooms; streamlining record- keeping and assessment tasks; and improving
school -home communication. The school district must meet state guidelines for
student to computer /modern multimedia ratios, provide adequate computer repair
services, network/hardware /software support, staffing, technology security
measures and electronic (web /Internet) resources.
viii
DRAFT •
• The Surfrider Foundation -- a group concerned with activism, education; and
preservation efforts related to coastal waters and surfing areas -- emphasizes the
need to use all available media technology to perform research and educate the
public and local governing agencies.
• The Newport Beach Arts Commission supports the arts in the community through
the provision of grant funding, public art exhibitions and performances, and art
education. It is also in the early stage of developing an arts and education center
for Newport Beach.
• Ballet Pacifica, Orange County's professional ballet dance company,.is interested
in participating in public access television and notes that it is a very productive
way to increase public awareness of the performing arts. Ballet Pacifica supports
the idea of expanded public access capabilities in the City of Newport Beach —
space, equipment and support staff for public access programming, the capability
of streaming public channels live over the Internet via the City's web site, and the
archiving of past programs.
• The League of Women Voters of Orange Coast favors effective local
governmental regulation of cable television. The League supports and
encourages the appointment of citizens' advisory groups and the development of
community - approved guidelines for use of cable TV public access channels.
fM
® DRAFT
111. PRIMARY RECOMMENDATIONS REGARDING
COMMUNITY CABLE - RELATED NEEDS AND INTERESTS
A. CABLE PLANT AND HEADEND
0
CURRENT AND FUTURE
1. The cable systems should be upgraded to a minimum 860 MHz configuration
using a combination of fiber optic and coaxial technology, and provide two -way activated
capacity, allowing deployment of services like high -speed data transport.
2. The architecture of each cable system should provide fiber to the
neighborhood nodes, with 500 or fewer subscribers served from any node.
3. The cable systems should include features typically included in state -of- the -art
systems. The Franchise documents should include reasonable standards for further
upgrades during the Franchise term.
4. The upgrade of the cable systems should include spectrum set aside as an
Institutional Network ( "I- Net "). The I -Net should include spectrum and any necessary
equipment at the headend and node locations to permit video, voice, and data to be
originated and received on a point -to -point and point-to-multi-point basis at the following
locations: (a) City government facilities; (b) K -12 public schools; (c) public library facilities; (d)
PEG Access Community Media Center; and (e) PEG Access origination sites.
5. The cable systems should have sufficient return capability and capacity to
accommodate current and future PEG Access activities and deliver a high quality signal from
any PEG Access Community Media Center or facility the City designates. To accomplish this
objective, each cable operator should provide, replace when necessary, and maintain a multi-
channel bi- directional link utilizing optical fiber or other equivalent technology between each
PEG Access origination site and their headend.
6. Live origination points should be installed at locations from which live
programming would likely occur (e.g., sporting event sites, parade route streets, etc.).
x
• DRAFT _ _. _ . •
7. Each cable operator should provide one free cable drop, free monthly cable
service for the most popular service tier (including all PEG Access, educational, public affairs,
and news channels); cable modem service, and all necessary equipment (converter, modem,
etc.) to each school, government building, and PEG Access facility within their respective
franchise areas. The management entity at these locations must be allowed to extend their
drops to provide service to other points, at their cost, without additional service fees.
8. Switching capability and equipment should be in place locally to permit a PEG
Access master control /playback system to deliver multiple signals (i.e., for each of the PEG
Access channels) to all Newport Beach cable subscribers.
9. The Newport Beach cable systems should be interconnected with other
contiguous cable systems and all cable communication service providers in the City.
B. SUBSCRIBER SERVICES AND CUSTOMER SATISFACTION
1. The cable systems should be upgraded to offer more programming services to
Newport Beach subscribers.
2. The cable operators should offer a variety of interactive services to both
residential and business customers that include, but are not limited to, movies on demand
and two -way video teleconferencing.
3. The City should adopt and enforce customer service standards that meet or
exceed the minimum obligations established by the Federal Communications Commission
(FCC). Special attention should be given to the issue: of telephone response time by the
cable operators.
4. Adequate Institutional Network (I -Net) spectrum (plus necessary equipment)
should be provided by the cable companies to City departments; schools and libraries.
5. The cable operators should make adequate PEG Access spectrum available
on their subscriber networks.
A
• DRAFT .
C. PEG ACCESS
1. Based upon input received during the needs assessment process and the
experience with PEG Access in other communities, Newport Beach should consider the
establishment of an independent nonprofit organization whose primary function would be to
manage the PEG Access channels, equipment, and facilities.
2. The Newport Beach Franchise Agreement should include provisions that:
a. specify requirements to fund and provide in -kind resources and support
for an independent nonprofit PEG Access management organization that would make its
services and resources available to: (1) all residents, and (2) households that subscribe to all
cable or other multi - channel programming service providers in the City; and
b. mandate that all City areas shall receive PEG Access programming via
interconnection of all cable and other multi - channel service providers in the City.
3. Initially, the cable operator should provide a minimum of three channels for
PEG Access on its Basic Tier, including one (1) channel for Government Access, one (1) channel
for Public Access, and one (1) channel for Educational Access. Additional spectrum /channels
should be available to be activated for future PEG Access purposes.
4. PEG Access capacity must be converted to digital when a Basic Tier is
converted to a digital format. The cost of digital conversion of PEG Access spectrum must be
the responsibility of each cable operator.
5. Each Public Access, Government Access, and Educational Access programming
service should be given the same channel location on each cable company's system in the City
of Newport Beach.
6. All PEG Access channels/spectrum must be provided free of charge to the
PEG Access management entity and users.
M
• DRAFT •
7. A Community Media Center (PEG Access facility) should be provided to help
meet local cable - related needs and interests.
a. The Community Media Center should comprise at least 6,000 square
feet, include adequate and appropriate equipment, and house the PEG Access staff. It could be
leased or owned by the PEG Access management organization or located in space provided
free or for a nominal amount by the City, school district, or other local institution.
b. Adelphia and Cox should each provide sufficient funding to pay all costs
associated with the construction and /or renovation of building space that would house the
Community Media Center. If donated space from the City or an educational institution is not
available for the Community Media Center, Adelphia and Cox should each provide either a
one -time major grant or a series of annual facilities grants in amounts necessary to pay the
costs for the Community Media Center space throughout the life of any new Franchise
Agreement. This facility should include areas for:
• Production Studio and Control Room
• Program Playback/Master Control Room
• Video Editing Suites
• Training and Multi- Purpose Meeting Room
• "Hot -Line' Studio
• Computer /Internet Lab
• Office Space for Staff
• Portable Equipment Check -in and Check -out Area
• Equipment Maintenance
• Videotape, Equipment, and Set Materials Storage
C. Upon signing any new Franchise Agreement, Adelphia and Cox should
each provide a grant to purchase appropriate PEG Access equipment for Newport Beach. in
addition, each Franchise Agreement should require Adelphia and Cox to provide periodic
equipment replacement grants. The following equipment packages should be provided:
xiii
!7
E
STATEMENT OF MINIMUM GOALS REGARDING CURRENT AND FUTURE
COMMUNITY CABLE- :RELATED NEEDS AND INTERESTS
The following constitutes the Statement of Minimum Goals (the "SMG ") adopted by the
City Council of the City of Newport Beach, California (the "City"). The SMG is based on,
among other things, that "Community Needs Assessment — Ascertainment and Recommendation
Regarding Community Cable- Related Needs and Interests for the City of Newport Beach,
California ", dated December 13, 2002 prepared by the Buske Group (the "Assessment Report"),
citizen input, Telcom Ad Hoc Committee input, Staff input, consultant input, and City Council
input. The .purpose of the SMG is to provide the City Council's general direction to its
negotiating team in attempting to achieve a mutually - acceptable franchise renewal agreement
with the City's two cable operators, Adelphia Communications Corporation ( "Adelphia") and
Cox Communications, Inc. ( "Cox "). The SMG is intended to be a fluid and dynamic document
and is not intended to establish rigid or inflexible parameters for any franchise negotiation.
Rather, the SMG constitutes a statement of the City Council's goals and desires in achieving a
franchise renewal. Those goals and desires are expected to be accomplished either by way of the
mechanisms set forth in the SMG or through functionally equivalent alternative mechanisms as
recommended by the Negotiating Team. In attempting to 'implement any and/or all of the
provisions of the SMG, the Negotiating Team is hereby specifically directed to take into account
the costs of meeting any of the directives set forth in the SMG prior to making a
recommendation for a finding of nonresponsiveness.
The SMG is intended to comply, in all material respects, with the Cable Communications
Policy Act of 1984, as amended (the "Cable Act "). To the extent that any conflict, expressed or
implied, exists between the provisions of the SMG and the Cable Act, the Cable Act shall, in all
cases, prevail and the provisions of the SMG shall be read in that context.
A. CABLE PLANT AND HEADEND
1. The cable systems should be upgraded to a minimum 860 MHz configuration or
greater during the term of any renewed franchise, utilizing a combination of fiber optic and
coaxial technology, and provide two -way activated capacity, allowing deployment of services
like high -speed data transport or greater during the terms of any renewed Franchise.
2. The architecture of each cable system should provide fiber to the neighborhood
nodes with 500 or fewer subscribers served from any node.
3. The cable systems should include features typically included in state -of -the -art
systems. The Franchise documents should include reasonable standards for further upgrades
during the Franchise term.
4. The upgrade of the cable systems should possess sufficient bandwidth to allow
spectrum set aside as an Institutional Network ( "I- Net "). Any required I -Net should include
spectrum and any necessary equipment at the headend and node locations to permit video, voice,
12W066751 -0049
378732.02 x04/01/03 \J
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• •
and data to be originated and received on a point -to -point and point -to -multi -point basis at the
following locations: (a) City government facilities; (b) City Council Chamber; (c) Newport-Mesa
Unified School District (the "District') Board Meeting room; (d) K -12 public schools; (e) public
library facilities; (f) PEG Access Community Media Center; and (g) PEG Access origination
sites.
5. The cable systems should have sufficient return capability and capacity to
accommodate current and future PEG Access activities and deliver a high quality signal from
any PEG Access Community Media Center or facility the City designates. To accomplish this
objective, each cable operator should provide, replace when necessary, and maintain a multi-
channel bi- directional link utilizing optical fiber or other equivalent technology between each
PEG Access origination site and their headend.
6. Live origination points should be installed at locations from which live
programming would likely occur (e.g., sporting event sites, community centers, public buildings,
etc.).
7. Each cable operator should provide one free cable drop; free monthly cable
service for the most popular tier (including all PEG Access, educational, public affairs, and news
channels), cable model service, and all necessary equipment (converter, modem, etc.) to each
school, government building, and PEG Access facility within their respective franchise areas.
The management entity at these locations must be allowed to extend their drops to provide
service to other points, at their cost, without additional services fees.
8. Switching, capability and equipment should be in place locally to permit a PEG
Access master control/playback system to deliver multiple signals (i.e., for each of the PEG
Access channels) to all Newport Beach cable subscribers.
9. All residents residing in any structure located in the Service Area should be
provided access to cable service at normal and non - discriminatory rates.
10. The Cable Systems should be fiber interconnected with other contiguous cable
systems and all cable communication service providers in the City.
11. The Cable Systems should provide secure Emergency Alert Systems made
available to the City which will allow the City to preempt all programming and insert audio
programming on all channels for distribution only to Newport Beach subscribers.
B. SUBSCRIBER SERVICES AND CUSTOMER SATISFACTION
I. The cable systems should be upgraded over the Franchise term to offer more
programming services to Newport Beach subscribers.
2. The cable operators should offer a variety of interactive services to both
residential and business customers that include, but are not limited to, movies on demand and
two -way video conferencing.
124/066751 -0049.
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• •
3. The City should adopt and enforce customer service standards and meet or exceed
the minimum obligations established by the Federal Communications Commission ( "FCC ").
Special attention should be given to the issue of telephone response time by the cable operators.
4. Adequate and secure Institutional Network ( "I- Net ") bandwidth capable of
supporting voice, video, and data transmission (plus necessary equipment), or the functional
equivalent, should be provided at no or substantially reduced cost by the cable companies to City
departments, schools and libraries and, at a minimum, include the following sites:
i. City Hall
ii. Police Department/Fire Station 3
iii. Utilities Department Corporate Yard
iv. General Services' Department Corporate Yard
V. Central Library (1000 Avocado)
vi. Balboa Branch Library/Fire Station 1
vii. Corona Del Mar Branch Library/Fire Station 5
viii. Mariners Branch Library/Fire Station 6
ix. Lifeguard Headquarters
X. Fire Station 4 (Balboa Island)
xi. Fire Station 7 (Airport)
xii. Fire Station 8 (Newport Coast)
xiii. OASIS Senior Center
xiv. Grant Howald Park/Neighborhood Center
xv. West Newport Community Center /15`h Street
xvi. Big Canyon Reservoir
xvii. Harbor Resources Division at the Balboa Yacht Basin
xviii. Hoag Hospital
xix. Newport Beach Police Helicopter Base at John Wayne Airport
xx. City Hall Fire Station (FS #2)
5. The cable operators should make adequate PEG Access spectrum available on
their subscriber networks. All PEG Access channel capacity spectrum should be provided free
of charge.
6. Need -based rate discounts for qualifying low- income seniors are encouraged for
the broadcast basic tier.
C. PEG ACCESS
The Franchise Agreement should include provisions that:
a. Specify requirements to fund and provide in -kind resources and support for
independent nonprofit PEG Access management organization that would make its services and
resources available to all residents.
b. Mandate that all City areas shall receive PEG Access programming via
interconnection of all cable providers in the City.
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• •
2. Initially, the cable operators should provide a minimum of three downstream
analog channels (18 MHz of spectrum) for PEG Access on its Basic Tier, including (1) channel
for Government Access, one (1) channel for Public Access, and one (1) channel for Educational
Access. Additional spectrum/channels should be available to be activated for future PEG Access
purposes,
3. PEG Access capacity (18 MHz of spectrum) must be converted to digital when
the Basic Tier is converted to a digital format. The cost of digital conversion of PEG Access
spectrum must be the responsibility of each cable operator.
4. . Each Public Access, Government Access, and Educational Access programming
service should be given the same channel location on each cable company's system in the City of
Newport Beach.
5. All PEG Access channels /spectrum must be provided free of charge to the PEG
Access management entity and users.
6. A Community Media Center (PEG Access facility), or its functional equivalent,
should be provided to help meet local cable- related needs and interests.
a. The Community Media Center should comprise at least 6,000 square feet, include
adequate and appropriate equipment, and house the PEG Access staff.
b. Adelphia and Cox should each provide sufficient funding to pay all costs
associated with the construction and/or renovation of building space that would house the
Community Media Center. If donated space from the City or an educational institution is not
available for the Community Media Center, Adelphia and Cox should each provide either a one-
time major grant or a series of annual facilities grants in amounts necessary to pay the costs for
the Community Media Center space throughout the life of any new Franchise Agreement. This
facility should include areas for:
♦ Production Studio and Control Room
♦ Program Playback/Master Control Room
Video Editing Suites
Training and Multi- Purpose Meeting Room
♦ "Hot- Line" Studio
• Computer/Intemet Lab
• Office Space for Staff
• Portable Equipment Check -in and Check -out Area
• Equipment Maintenance
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• •
♦ Videotape, Equipment, and Set Materials Storage
C. Upon signing any new Franchise Agreement, Adelphia and Cox should each
provide a grant to purchase appropriate PEG Access equipment for Newport Beach. In addition,
each Franchise Agreement should require Adelphia and Cox to provide periodic equipment
replacement grants. The following equipment packages should be provided:
♦_ Single Camera Field Production Packages
♦ Editing/Post Production/Dubbing Packages
♦ A Mobile Multiple- Camera Production System
♦ A Three- Camera Studio Production Package
♦ A "Hot- Line" Studio Equipment Package
♦ Remote Controlled City Council Chambers Package
♦ A Computer/Intemet Access Equipment Package
♦ Test Equipment and Tools for Equipment Maintenance
♦ Office Equipment and Furniture.
♦ City Council Chambers fixed multi -media presentation equipment with
direct input feeds to master control system.
7. Each cable operator and the City should provide adequate annual funding to
permit the delivery of PEG Access services.
8. To promote PEG Access programming to Newport Beach residents and cable
subscribers more effectively, Adelphia and Cox should each provide the following:
a. Courtesy promotion of the PEG Access channels and program listings in all print
and electronic program guides for their Newport Beach subscribers.
b. Free promotional spots for the PEG Access channels and programming on the
cable satellite services that make times available for local advertising insertions.
C. Free periodic inclusion of PEG Access promotional and informational items in the
Newport Beach cable subscriber bills, as permitted by applicable law.
9. Live broadcast of the meetings of the City Council, Planning Commission, and
the Newport-Mesa Unified School Board on PEG Channels and/or through Internet video
streaming.
124/066751 -0049 c
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E
10. Connection of all instructional rooms of each currently unwired District school
sites to cable system and the provision of free video programming and Internet services.
D. COMPLIANCE
1. Adelphia and Cox shall bring themselves into compliance with all applicable
franchise requirements, minimum customer service requirements of the Federal Communications
Commission, state law, the municipal code, City regulations, and City orders.
2. Adelphia and Cox shall remit to the City any and all franchise fee deficits, with
interest and penalties, prior to any franchise renewal.
'24/066751 -0049 c
378732.02 a04101/03 -6_. r
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• •
DRAFT
STATEMENT OF MINIMUM GOALS REGARDING CURRENT AND FUTURE
COMMUNITY CABLE- RELATED NEEDS AND INTERESTS
The following constitutes the Statement of Minimum Goals (the "SMG') adopted by the
City Council of the City of Newport Beach, California (the "City "). The SMG is based on,
among other things, that "Community Needs Assessment — Ascertainment and Recommendation
Regarding Community Cable- Related Needs and Interests for the City of Newport Beach,
California", dated December 13, 2002 prepared by the Buske Group (the "Assessment Report"),
citizen input, Telcom Ad Hoc Committee input, Staff input, consultant input, and City Council
input. The purpose of the SMG is to provide the City Council's general direction to its
negotiating team in attempting to achieve a mutually - acceptable franchise renewal agreement
with the City's two cable operators, Adelphia Communications Corporation ( "Adelphia ") and
Cox Communications, Inc. ( "Cox "). The SMG is intended to be a fluid and dynamic document
and is not intended to establish rigid or inflexible parameters for any franchise negotiation.
Rather, the SMG constitutes a statement of the City Council's goals and desires in achieving a
franchise renewal. Those goals and desires are expected to be accomplished either by way of the
mechanisms set forth in the SMG or through functionally equivalent alternative mechanisms as
recommended by the Negotiating Team. In attempting to implement any and/or all of the
provisions of the SMG, the Negotiating Team is hereby specifically directed to take into account
the costs of meeting any of the directives set forth in the SMG prior to making a
recommendation for a finding of nonresponsiveness.
The SMG is intended to comply, in all material respects, with the Cable Communications
Policy Act of 1984, as amended (the "Cable Act "). To the extent that any conflict, expressed or
implied, exists between the provisions of the SMG and the Cable Act, the Cable Act shall, in all
cases, prevail and the provisions of the SMG shall be read in that context.
A. CABLE PLANT AND HEADEND
1. The cable systems should be upgraded to a minimum 860 MHz configuration or
greater during the term of any renewed franchise, utilizing a combination of fiber optic and
coaxial technology, and provide two -way activated capacity, allowing deployment of services
like high -speed data transport or greater during the terms of any renewed Franchise.
2. The architecture of each cable system should provide fiber to the neighborhood
nodes with 500 or fewer subscribers served from any node.
3. The cable systems should include features typically included in state -of -the -art
systems. The Franchise documents should include reasonable standards for further upgrades
during the Franchise term.
4. The upgrade of the cable systems should possess sufficient bandwidth to allow
spectrum set aside as an Institutional Network ( "I- Net "). Any required I -Net should include
spectrum and any necessary equipment at the headend and node locations to permit video, voice,
124/066759 -0049
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�<0
and data to be originated and received on a point -to -point and point -to- multi -point basis at the
following locations: (a) City government facilities; (b) City Council Chamber; (c) Newport-Mesa
Unified School District (the "District') Board Meeting room; (d) K -12 public schools; (e) public
library facilities; (f) PEG Access Community Media Center; and (g) PEG Access origination
sites.
5. The cable systems should have sufficient return capability and capacity to
accommodate current and future PEG Access activities and deliver a high quality signal from
any PEG Access Community Media Center or facility the City designates. To accomplish this
objective, each cable operator should provide, replace when necessary, and maintain a multi-
channel bi- directional link utilizing optical fiber or other equivalent technology between each
PEG Access origination site and their headend.
6. Live origination points should be installed at locations from which live
programming would likely occur (e.g., sporting event sites, community centers, public buildings,
etc.).
7. Each cable operator should provide one free cable drop, free monthly cable
service for the most popular tier (including all PEG Access, educational, public affairs, and news
channels), cable model service, and all necessary equipment (converter, modem, etc.) to each
school, government building, and PEG Access facility within their respective franchise areas.
The management entity at these locations must be allowed to extend their drops to provide
service to other points, at their cost, without additional services fees.
8. Switching capability and equipment should be in place locally to permit a PEG
Access master control/playback system to deliver multiple signals (i.e., for each of the PEG
Access channels) to all Newport Beach cable subscribers.
9. All residents residing in any structure located in the Service Area should be
provided access to cable service at normal and non- discriminatory rates.
10. The Cable Systems should be fiber interconnected with other contiguous cable
systems and all cable communication service providers in the City.
11. The Cable Systems should provide secure Emergency Alert Systems made
available to the City which will allow the City to preempt all programming and insert audio
programming on all channels for distribution only to Newport Beach subscribers.
B. SUBSCRIBER SERVICES AND CUSTOMER SATISFACTION
I. The cable systems should be upgraded over the Franchise term to offer more
programming services to Newport Beach subscribers.
2. The cable operators should offer a variety of interactive services to both
residential and business customers that include, but are not limited to, movies on demand and
two -way video conferencing.
124/066751 -0049
378732.02 a04/01/03 -2-
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• •
3. The City should adopt and enforce customer service standards and meet or exceed
the minimum obligations established by the Federal Communications Commission ("FCC").
Special attention should be given to the issue of telephone response time by the cable operators.
4. Adequate and secure Institutional Network ( "I- Net ") bandwidth capable of
supporting voice, video, and data transmission (plus necessary equipment), or the functional
equivalent, should be provided at no or substantially reduced cost by the cable companies to City
departments, schools and libraries and, at a minimum, include the following sites:
i. City Hall
ii. Police Department/Fire Station 3
iii. Utilities Department Corporate Yard
iv. General Services' Department Corporate Yard
V. Central Library (1000 Avocado)
vi. Balboa Branch Library/Fire Station I
vii. Corona Del Mar Branch Library/Fire Station 5
viii. Manners Branch Library/Fire Station 6
ix. Lifeguard Headquarters
X. Fire Station 4 (Balboa Island)
xi. Fire Station 7 (Airport)
xii. Fire Station 8 (Newport Coast)
xiii. OASIS Senior Center
xiv. Grant Howald Park/Neighborhood Center
xv. West Newport Community Center /15`h Street
xvi. Big Canyon Reservoir
xvii. Harbor Resources Division at the Balboa Yacht Basin
xviii. Hoag Hospital
xix. Newport Beach Police Helicopter Base at John Wayne Airport
xx. City Hall Fire Station (FS #2)
5. The cable operators should make adequate PEG Access spectrum available on
their subscriber networks. All PEG Access channel capacity spectrum should be provided free
of charge.
6. Need -based rate discounts for qualifying low- income seniors are encouraged for
the broadcast basic tier.
C. PEG ACCESS
L The Franchise Agreement should include provisions that:
a. Specify requirements to fund and provide in -kind resources and support for
independent nonprofit PEG Access management organization that would make its services and
resources available to all residents.
b. Mandate that all City areas shall receive PEG Access programming via
interconnection of all cable providers in the City.
124/066751 -0049
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18
2. Initially, the cable operators should provide a minimum of three downstream
analog channels (18 MHz of spectrum) for PEG Access on its Basic Tier, including (1) channel
for Government Access, one (1) channel for Public Access, and one (1) channel for Educational
Access. Additional spectrum/channels should be available to be activated for future PEG Access
purposes.
3. PEG Access capacity (18 MHz of spectrum) must be converted to digital when
the Basic Tier is converted to a digital format. The cost of digital conversion of PEG Access
spectrum must be the responsibility of each cable operator.
4. . Each Public Access, Government Access, and Educational Access programming
service should be given the same channel location on each cable company's system in the City of
Newport Beach.
5. All PEG Access channels /spectrum must be provided free of charge to the PEG
Access management entity and users.
6. A Community Media Center (PEG Access facility); or its functional equivalent,
should be provided to help meet local cable - related needs and interests.
a. The Community Media Center should comprise at least 6,000 square feet, include
adequate and appropriate equipment, and house the PEG Access staff.
b. Adelphia and Cox should each provide sufficient funding to pay all costs
associated with the construction and/or renovation of building space that would house the
Community ,Media Center. If donated space from the City or an educational institution is not
available for the Community Media Center, Adelphia and Cox should each provide either a one-
time major grant or a series of annual facilities grants in amounts necessary to pay the costs for
the Community Media Center space throughout the life of any new Franchise Agreement.. This
facility should include areas for:
124/066751 -0049
378732.02: a04/01/03
Production Studio and Control Room
a Program Playback/Master Control Room
♦ Video Editing Suites
e Training and Multi- Purpose Meeting Room
0 "Hot- Line" Studio
♦ Computer /Internet Lab
♦ Office Space for Staff
Portable Equipment Check -in and Check -out Area
e Equipment Maintenance
me
,Ll
♦ Videotape, Equipment,. and Set Materials Storage
C. Upon signing any new Franchise. Agreement, Adelphia and Cox should each
provide a grant to purchase appropriate PEG Access equipment for Newport Beach, In addition,
each Franchise Agreement should require Adelphia and Cox to provide periodic equipment
replacement grants. The following equipment packages should be provided:
♦ Single Camera Field Production Packages
♦ Editing/PostProduction/Dubbing Packages
A Mobile Multiple- Camera Production System
A Three- Camera Studio Production Package
♦ A "Hot- Line" Studio Equipment Package
s Remote Controlled City Council Chambers Package
♦ A Computer/Internet Access Equipment Package
Test Equipment and Tools for Equipment Maintenance
♦ Office Equipment and Furniture.
City Council Chambers fixed multi -media presentation equipment with
direct input feeds to master control system.
7. Each cable operator and the City should provide adequate annual funding to
permit the delivery of PEG Access services.
8. To promote PEG Access programming to Newport Beach residents and cable
subscribers more effectively, Adelphia and Cox should each provide the following:
a. Courtesy promotion of the PEG Access channels and program listings in all print
and electronic program guides for their Newport Beach subscribers.
b. Free promotional spots for the PEG Access channels and programming on the
cable satellite services that make times available for local advertising insertions.
C. Free periodic inclusion of PEG Access promotional and informational items in the
Newport Beach cable subscriber bills, as permitted by applicable law.
9. Live broadcast of the meetings of the City Council, Planning Commission, and
the Newport-Mesa Unified School Board on PEG Channels and/or through Internet video
streaming.
124/066751-0049
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ISv
10. Connection of all instructional rooms of each currently unwired District school
sites to cable system and the provision of free video programming and Internet services.
D. COMPLIANCE
1. Adelphia and Cox shall bring themselves into compliance with all applicable
franchise requirements, minimum customer service requirements of the Federal Communications
Commission, state law, the municipal code, City regulations, and City orders.
2. Adelphia and Cox shall remit to the City any and all franchise fee deficits, with
interest and penalties, prior to any franchise renewal.
124/066751 -0049
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31
ORDINANCE NO. 2003- 3
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF NEWPORT BEACH AMENDING SECTION 4 OF
ORDINANCE NOS. 1196 AND 1197 TO EXTEND NOW
EXCLUSIVE FRANCHISES WITH ADELPHIA CABLE
COMMUNICATIONS AND WITH COX COMMUNICATIONS
THIS ORDINANCE is made with respect to the following:
RECITALS
FLb 2093
WHEREAS, by approving Ordinance No. 1197 and its later amendments within
Ordinances No 1365 and 91 -43, and 2001 -23, the City of Newport Beach entered into a
cable television franchise agreement ( "Franchise Agreement') with Adelphia Cable
Communications and its predecessor companies, Comcast Cablevision, Newport Beach
Cablevision Incorporated, and Warner Brothers TV Service; Incorporated on or about
December 7, 1966. The Franchise Agreement will expire on January 27, 2003; and
WHEREAS, by approving Ordinance No. 1196 and its later amendments within
Ordinances No. '1891 and 91 -42, 2001 -23, the City of Newport Beach entered into a
cable television franchise agreement ( "Franchise Agreement') with CoxCom,
Incorporated (dba Cox Communications) and its predecessor companies, Dimension
Cablevision and Community Cablevision; on or about December 7, 1966. The Franchise
Agreement will expire on January 27, 2003; and
WHEREAS, City and Adelphia and the City and CoxCorn desire to extend each
respective Franchise Agreement for one year to allow for additional time for negotiations
to consider the renewal of each Franchise Agreement.
NOW THEREFORE the City Council of the City of Newport Beach does ordain as
follows:
SECTION 1: Section 4 of Ordinance No. 1196 is hereby amended to read as follows:
(a) This Franchise commenced January 27, 1967 and shall terminate on January
27, 2004.
SECTION 2: Section 4 of Ordinance No. 1197 is hereby amended to read as follows:
(a) This Franchise commenced January 27, 1967 and shall terminate on January 27,
2004.
SECTION 3: This extension of Franchise shall not become effective until written
acceptance in the form attached to Ordinance as Exhibit "A" and Exhibit "B" has been
• •
fully executed and filed with the City Clerk within 10 days after the adoption of this
Ordinance.
SECTION 4: If any section, subsection, sentence, clause or phrase of this ordinance is,
for any reason, held to be invalid or unconstitutional, such decision shall not affect the
validity or constitutionality of the remaining portions of this ordinance. The City Council
hereby declares that it would have passed this ordinance, and each section, subsection,
clause or phrase hereof, irrespective of the fact that any one or more sections,
subsections, sentences, clauses and phrases be declared unconstitutional.
SECTION 5: The Mayor shall sign and the City Clerk shall attest to the passage of this
ordinance. The City Clerk shall cause the same to be published once in the official
newspaper of the City, and it shall be effective thirty (30) days after its adoption.
This Ordinance was introduced at a regular meeting of the City Council of the City of
Newport Beach held on the 28th day of January, 2003, and was adopted on the 11th
day of February, 2003, by the following vote, to wit:
AYES, COUNCILMEMBERS
Heffernan, Ridgeway, Adams, Webb, Nichols, PSayor Bromberg
NOES, COUNCILMEMBERS
ABSENT COUNCILMEMBERS
Proctor
ATTEST: %
City Clerk
FRANCHISE EXTENSION AGREEMENT
BETWEEN
THE CITY OF NEWPORT BEACH
AND
ADELPHIA CABLE COMMUNICATIONS
This Franchise Extension Agreement is entered into between the City of Newport
Beach and Century-TCI California LP, dba Adelphia Cable Communications
( "Adelphia ") this 28' day of January, 2003, with regards to the following facts:
RECITALS
WHEREAS, by approving Ordinance No. 1197 and its later amendments within
Ordinances No 1365 and 91 -43, the.City of Newport Beach entered into a cable
television franchise agreement ( "Franchise Agreement') with Adelphia Cable
Communications and its predecessor companies, Comcast Cablevision, Newport
Beach Cablevision Incorporated, and Warner Brothers TV Service, Incorporated on or
about December 7, 1966. . The Franchise Agreement will expire on January 27; 2003;
and
WHEREAS, City and Adelphia desire to extend the Franchise Agreement for one year
to allow for additional time for negotiations to consider the renewal of the_Franchise
Agreement.
NOW THEREFORE, the Parties agree as follows:
1.. The Franchise Agreement shall be extended to January 27, 2004. During said
extension, the terms and conditions of the current Franchise Agreement shall remain in
full force and effect without modification.
2. Both parties hereby reserve all rights under applicable provisions of the Cable
Communications Policy Act of 1984 (The "Cable Act'), including without limitation
Sections 626 and 635. Nothing herein shall be deemed or construed as a waiver,
release or surrender of any right that either party may have under the Cable Act or any
applicable law. Nothing herein shall waive, release or otherwise relieve the Operator,
or any predecessor thereof, from any Franchise Agreement breaches or violations, if
any exist, or other violations of law, if any, and the grant of this Franchise Agreement
extension shall not be utilized by the operator for any purpose other than to extend, and
document the extension, of the Franchise Agreement through January 27, 2004.
EXHIBIT "A" 1
IN WITNESS WHEREOF, the parties hereto have caused this franchise Extension
Agreement to be executed in duplicate on the date and year first written herein.
APPROVED AS TO FORM:
CITY OF NEWPORT BEACH
City Attorney
CITY OF NEWPORT BEACH:
F:\users\catkshared\da\Ag\AdelphiaExtFranAgi.doc
CENTURY -TCI CALIFORNIA L.P. d /blab
ADELPHIA CABLE COMMUNICATIONS
EXHIBIT "A"
2
•
FRANCHISE EXTENSION AGREEMENT
BETWEEN
THE CITY OF NEWPORT BEACH
AND
COXCOMINCORPORATED
This Franchise Extension Agreement is entered into between the City of Newport Beach
and CoxCom, Incorporated, dba Cox Communications Orange County ("Cox") this 28"`
day of January, 2003, with regards to the following facts:
RECITALS
WHEREAS, by approving Ordinance No.. 1196 and its later amendments within
Ordinances No. 1891 and 9142, the City of Newport Beach entered into a cable
television franchise agreement ( "Franchise Agreement') with CoxCom, Incorporated
(dba Cox Communications Orange County, a wholly -owned subsidiary of Cox
Communications, Inc.; a Delaware Corporation.) and its predecessor companies,
Dimension Cablevision and Community Cablevision, on or about December 6, 1966.
The Franchise Agreement will expire on January 27, 2003; and
WHEREAS, City and Cox desire to extend the Franchise Agreement for one year to
allow for additional time for negotiations to consider the renewal of the Franchise
Agreement.
NOW THEREFORE, the Parties agree as follows:
1. The Franchise Agreement shall be extended to January 27, 2003. Duping said
extension, the terms and conditions of the current Franchise Agreement shall remain in
full force and effect without modification.
2. Both parties hereby reserve all rights under applicable provisions of the Cable
Communications Policy Act of 1984 (The "Cable Act'), including without limitation
Sections 626 and 635. Nothing herein shall be deemed or construed as a waiver,
release or surrender of any right that either party may have under the Cable Act or any
applicable law. Nothing herein shall waive, release or otherwise relieve the Operator, or
any predecessor thereof, from any Franchise Agreement breaches or violations, if any
exist; or other violations of law, if any, and the grant of this Franchise Agreement
extension shall not be utilized by the operator for any purpose other than to extend, and
document the extension, of the Franchise Agreement through January 27, 2004.
1
Exhibit "B"
IN WITNESS WHEREOF, the parties hereto have caused this franchise Extension
Agreement to be executed in duplicate on the date and year first written herein.
APPROVED AS TO FORM:
CITY OF NEWPORT BEACH
City Attorney
CITY OF NEWPORT BEACH: COXCOM, INCORPORATED d /b /a/
COX COMMUNICATIONS ORANGE COUNTY
F `.\usem\catlshared\d a\Ag \CoxFranExtAgt.doc
2
Exhibit "B"
STATE OF CALIFORNIA }
COUNTY OF ORANGE
CITY OF NEWPORT BEACH }
I, LAVONNE M. HARKLESS, City Clerk of the City of Newport Beach, California, do
hereby certify that the whole number of members of the City Council is seven; that the foregoing
ordinance, being Ordinance No. 2003 -3 was duly and regularly introduced before and adopted by the
City Council of said City at a regular meeting of said Council, duly and regularly held on the 11th
day of February 2003, and that the same was so passed and adopted by the following vote, to wit:
Ayes: Heffernan, Ridgeway, Adams, Webb, Nichols, Mayor Bromberg
Noes: None
Absent: Proctor
Abstain: None
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the
official seal of said City this 12th day of February 2003. / / }q l/ wl_
City Clerk
City of Newport Beach, California
(Seal)
CERTIFICATE OF PUBLICATION
STATE OF CALIFORNIA }
COUNTY OF ORANGE
CITY OF NEWPORT BEACH }
I, LAVONNE M. HARKLESS, City Clerk of the City of Newport Beach, California, do hereby
certify that Ordinance No. 2003 -3 has been duly and regularly published according to law and the
order of the City Council of said City and that same was so published in The Daily Pilot, a daily
newspaper of general circulation on the following date, to wit: February 15, 2003.
2003.
In witness whereof, I have hereunto subscribed my name this day of
City Clerk
City of Newport Beach, California
CITY OF NEWPORT BEACH
CITY COUNCIL STAFF REPORT
Agenda Item No. 4
(January 28, 2003)
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Office of the City Attorney
Robin L. Clauson, Assistant City Attorney, 644 -3131,
rclauson@city.Newport-beach.ca.us
SUBJECT: Ordinance Extending Non- Exclusive Franchises with Adelphia & Cox
Cable Telecommunications
ISSUE:
Should Franchise Agreements with Adelphia & Cox Cable be extended for one year?
RECOMMENDATION:
It is recommended that the City Council approve first reading of the attached ordinance
and pass to second reading and adoption at the City Council's next regularly scheduled
meeting.
DISCUSSION:
Background:
The Ad Hoc Telecommunications Committee was formed by the City Council in part to
review expiring City franchise agreements with our two current cable television
companies, Adelphia Cable Communications and Cox Communications and prepare for
negotiations to revise and renew those franchises. The current franchise agreements
expired on January 27, 2002 and Extension Agreements were approved for one year in
order to study all aspects of technological, programming and service advances
occurring since the original contracts were signed in 1967, over 36 years ago.
Since both the cable franchises will expire on January 27, 2003, the
Telecommunications Committee has adopted a work schedule that will accomplish the
negotiations so that a new cable franchise ordinance can be brought to the City Council
prior to January 2004.
The City hired cable consultant Sue Buske, The Buske Group, to provide an in -depth
Cable Needs Assessment Report with efforts commencing in February, 2002 and which
C4�_)
• •
Ordinance Ext. Non - Exclusive Franchises with Adelphia & Cox Cable Telecommunications
January 28, 2003
Page 2
included eight in -depth focus group workshops conducted in May, an independent and
statistically valid telephone survey report, analysis of strategic plans from local
organizations for assuring community future goals were considered, distribution of
flyers, posters and brochures, promotion via on -going cable programming and a series
of Daily Pilot ads. Great care has been taken in soliciting public input on what the
community desires for local programming options and documentation on inquiries and
comments from citizens has also been ongoing since September, 2001.
On October 17, 2002 one final community leaders' workshop was held to assure all
opportunities were extended in order to complete data to the Buske Report. A draft of
the Report dated December 13, 2002 was received close to the holidays and City staff
was unable to adequately study the 85 -page chronicle in time to make
recommendations regarding contract development with the two cable companies.
Moving forward, it is anticipated that staff recommendations will be submitted to the Ad
Hoc Telecommunications Committee in February, and a report and recommendations of
the Telecommunications Committee will be brought to the Council in March. Following
action by the Council, the informal negotiations between Adelphia and the City and Cox
and the City should begin with completion prior to the extended deadline of January 27,
2004.
Environmental Review: Extension of existing franchise does not require environmental
review.
Public Notice: Cable companies have been notified by U.S. Mail and facsimile on
January 21, 2003.
Prepared and Submitted by:
SIGNAT URE
Rdbin L. Clauson,
Assistant City Attorney
Attachments: Ordinance Amending Section 4 of Ordinance Nos. 1196 & 1197
Franchise Extension Agreement between City of Newport Beach & Adelphia
Franchise Extension Agreement between City of Newport Beach & CoxCom
F: \users\cat \sha redlda \C CstaffRe ports\CoxAdelphia ExFranAgt'
• •
ORDINANCE NO. 2003-
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF NEWPORT BEACH AMENDING SECTION 4 OF
ORDINANCE NOS. 1196 AND 1197 TO EXTEND NON-
EXCLUSIVE FRANCHISES WITH ADELPHIA CABLE
COMMUNICATIONS AND WITH COX COMMUNICATIONS
THIS ORDINANCE is made with respect to the following:
RECITALS
WHEREAS, by approving Ordinance No. 1197 and its later amendments within
Ordinances No 1365 and 91 -43, and 2001 -23, the City of Newport Beach entered into a
cable television franchise agreement ( "Franchise Agreement') with Adelphia Cable
Communications and its predecessor companies, Comcast Cablevision, Newport Beach
Cablevision Incorporated, and Warner Brothers TV Service, Incorporated on or about
December 7, 1966. The Franchise Agreement will expire on January 27, 2003; and
WHEREAS, by approving Ordinance No. 1196 and its later amendments within
Ordinances No. 1891 and 91-42, 2001 -23, the City of Newport Beach entered into a
cable television franchise agreement ( "Franchise Agreement ") with CoxCom,
Incorporated (dba Cox Communications) and its predecessor companies, Dimension
Cablevision and Community Cablevision, on or about December 7, 1966. The Franchise
Agreement will expire on January 27, 2003; and
WHEREAS, City and Adelphia and the City and CoxCom desire to extend each
respective Franchise Agreement for one year to allow for additional time for negotiations
to consider the renewal of each Franchise Agreement.
NOW THEREFORE the City Council of the City of Newport Beach does ordain as
follows:
SECTION 1: Section 4 of Ordinance No. 1196 is hereby amended to read as follows:
(a) This Franchise commenced January 27, 1967 and shall terminate on January
27, 2004.
SECTION 2: Section 4 of Ordinance No. 1197 is hereby amended to read as follows:
(a) This Franchise commenced January 27, 1967 and shall terminate on January 27,
2004.
SECTION 3: This extension of Franchise shall not become effective until written
acceptance in the form attached to Ordinance as Exhibit "A" and Exhibit 'B" has been
• •
fully executed and filed with the City Clerk within 10 days after the adoption of this
Ordinance.
SECTION 4: If any section, subsection, sentence, clause or phrase of this ordinance is,
for any reason, held to be invalid or unconstitutional, such decision shall not affect the
validity or constitutionality of the remaining portions of this ordinance. The City Council
hereby declares that it would have passed this ordinance, and each section, subsection,
clause or phrase hereof, irrespective of the fact that any one or more sections,
subsections, sentences, clauses and phrases be declared unconstitutional.
SECTION 5: The Mayor shall sign and the City Clerk shall attest to the passage of this
ordinance. The City Clerk shall cause the same to be published once in the official
newspaper of the City, and it shall be effective thirty (30) days after its adoption.
This Ordinance was introduced at a regular meeting of the City Council of the City of
Newport Beach held on the 28th Day of January, 2003, and was adopted on the 11th
Day of February, 2003, by the following vote, to wit:
AYES, COUNCILMEMBERS,
NOES, COUNCILMEMBERS
ABSENT COUNCILMEMBERS
ATTEST:
LaVonne Harkless, City Clerk
F:(users \cabs h ared \da\Ord inance \Cox &AdelphiaExtFra nAgt.d oc
• •
FRANCHISE EXTENSION AGREEMENT
BETWEEN
THE CITY OF NEWPORT BEACH
AND
ADELPHIA CABLE COMMUNICATIONS
This Franchise Extension Agreement is entered into between the City of Newport
Beach and Century-TCI California LP, dba Adelphia Cable Communications
( "Adelphia ") this 28' day of January, 2003, with regards to the following facts;
RECITALS
WHEREAS, by approving Ordinance No. 1197 and its later amendments within
Ordinances No 1365 and 91 -43, the City of Newport Beach entered into a cable
television franchise agreement ( "Franchise Agreement ") with Adelphia Cable
Communications and its predecessor companies, Comcast Cablevision, Newport
Beach Cablevision Incorporated, and Warner Brothers TV Service, Incorporated on or
about December 7, 1966. The Franchise Agreement will expire on January 27, 2003;
and
WHEREAS, City and Adelphia desire to extend the Franchise Agreement for one year
to allow for additional time for negotiations to consider the renewal of the Franchise
Agreement.
NOW THEREFORE, the Parties agree as follows:
1. The Franchise Agreement shall be extended to January 27, 2004. During said
extension, the terms and conditions of the current Franchise Agreement shall remain in
full force and effect without modification.
2. Both parties hereby reserve all rights under applicable provisions of the Cable
Communications Policy Act of 1984 (The "Cable Act "), including without limitation
Sections 626 and 635. Nothing herein shall be deemed or construed as a waiver,
release or surrender of any right that either party may have under the Cable Act or any
applicable law. Nothing herein shall waive, release or otherwise relieve the Operator,
or any predecessor thereof, from any Franchise Agreement breaches or violations, if
any exist, or other violations of law, if any, and the grant of this Franchise Agreement
extension shall not be utilized by the operator for any purpose other than to extend, and
document the extension, of the Franchise Agreement through January 27, 2004.
EXHIBIT "A" 1
•
IN WITNESS WHEREOF, the parties hereto have caused this franchise Extension
Agreement to be executed in duplicate on the date and year first written herein.
APPROVED AS TO FORM:
CITY OF NEWPORT BEACH
City Attorney
CITY OF NEWPORT BEACH: CENTURY -TCI CALIFORNIA L.P. d /b /a/
ADELPHIA CABLE COMMUNICATIONS
F:\users\cat\ shared\da\Ag\AdelphiaExtFranAgt.doc
EXHIBIT "A" 2
! •
FRANCHISE EXTENSION AGREEMENT
BETWEEN
THE CITY OF NEWPORT BEACH
AND
COXCOMINCORPORATED
This Franchise Extension Agreement is entered into between the City of Newport Beach
and CoxCom, Incorporated, dba Cox Communications Orange County ( "Cox ") this 28th
day of January, 2003, with regards to the following facts:
RECITALS
WHEREAS, by approving Ordinance No.. 1196 and its later amendments within
Ordinances No. 1891 and 91-42, the City of Newport Beach entered into a cable
television franchise agreement ( "Franchise Agreement') with CoxCom, Incorporated
(dba Cox Communications Orange County, a wholly -owned subsidiary of Cox
Communications, Inc., a Delaware Corporation.) and its predecessor companies,
Dimension Cablevision and Community Cablevision, on or about December 6, 1966.
The Franchise Agreement will expire on January 27, 2003; and
WHEREAS, City and Cox desire to extend the Franchise Agreement for one year to
allow for additional time for negotiations to consider the renewal of the Franchise
Agreement.
NOW THEREFORE, the Parties agree as follows:
The Franchise Agreement shall be extended to January 27, 2003. During said
extension, the terms and conditions of the current Franchise Agreement shall remain in
full force and effect without modification.
2. Both parties hereby reserve all rights under applicable provisions of the Cable
Communications Policy Act of 1984 (The "Cable Act "), including without limitation
Sections 626 and 635. Nothing herein shall be deemed or construed as a waiver,
release or surrender of any right that either parry may have under the Cable Act or any
applicable law. Nothing herein shall waive, release or otherwise relieve the Operator, or
any predecessor thereof, from any Franchise Agreement breaches or violations, if any
exist, or other violations of law, if any, and the grant of this Franchise Agreement
extension shall not be utilized by the operator for any purpose other than to extend, and
document the extension, of the franchise Agreement through January 27, 2004.
Exhibit "B"
•
Ll
IN WITNESS WHEREOF, the parties hereto have caused this franchise Extension
Agreement to be executed in duplicate on the date and year first written herein.
APPROVED AS TO FORM:
CITY OF NEWPORT BEACH
City Attorney
CITY OF NEWPORT BEACH: COXCOM, INCORPORATED d /b /a/
COX COMMUNICATIONS ORANGE COUNTY
F:\users\cat\sharecftda\AgkCoxFranExtAgt.doc
Exhibit °B"
r
11
0
ITEM 21
TO: Members of the Newport Beach City Council
FROM: Marilee Jackson, Public Information Officer
SUBJECT: Presentation by Cable Consultant Sue Buske and documentation of
public comments regarding both Adelphia and Cox cable TV companies
serving respective parts of the city
ACTIONS:
BACKGROUND:
AUG 2UO2
6 abed
Discuss, hear and document public comments regarding cable TV
services and requests for additional services as applicable to upcoming
franchise agreement renewals for Adelphia and Cox Communications.
Cable TV and Internet services in the city of Newport Beach are
somewhat unusual in that two separate areas of city jurisdiction are under
contract to different cable companies. Adelphia Communications (formerly
Comcast) serves most of the city located west of Jamboree Road to the Santa
Ana River Jetty and inland to Costa Mesa. Much of Corona del Mar is in
Adelphia's territory as well.
( of
Cox Communications provides residents with services east of Jamboree Road
and inland of PCH /5th Avenue, including the newly annexed Newport Coast area
(See map Attachment A). The split service is a result of previously annexed parts
of the City such as Corona del Mar and more recently the Newport Coast areas
continuing their respective cable TV franchise agreements which were in place
prior to those annexations. Adelphia currently serves approximately 18,000 TV
subscribers; Cox has approximately 10,000 TV subscribers. These numbers do
not include the cable modem, high -speed Internet services.
The separation remains today because each cable company owns the
equipment and cabling in its respective areas. Adelphia has upgraded its
side of the city to provide fiber optics and high speed Internet service; it
owns the cabling in the ground, the transmission and reception
equipment located at 'head-end" facilities and provides its programming
according to its channel line -up. Likewise, Cox Communications also
provides fiber optic service, owns its own equipment and programs
according to its own channel line -up. This situation cannot change
unless or until one cable company is able to purchase one existing
system from the other or a third party purchases both. At this
time, neither system is for sale.
Both agreements (and the City's own ordinances) are non- exclusive.
This means that any company - Cox, Adelphia, AT &T, Comcast, Charter
or anyone else -- is free to enter into an agreement with the City to
provide cable TV and Internet services if they first provide the required
cabling, equipment and proof of performance and service.
E
9 Page 2'
Because the City is served by two separate entities, there must be
negotiation for two separate contracts. However, the City specifies in
Newport Beach Municipal Code Sec. 5.44.190(A) "...all CATV systems
franchised to operate within the City shall be compatible and
interconnectable with one another to provide simultaneous cable casts
on the Community Channel."
On June 25, 2002 Adelphia and 200 of its subsidiaries filed a Chapter 11
Petition for Bankruptcy Reorganization. Although our cable needs
assessment process is continuing and Adelphia has indicated it will
continue its commitments, the impact of the bankruptcy remains
unknown at this point in time.
FRANCHISE
RENEWAL
PREPARATIONS: In May this year, cable consultant Sue Buske (hired by the City for the
purpose of conducting a comprehensive "Community Needs Assessment "),
conducted a series of community cable focus group workshops addressing
future cable service needs in Newport Beach. The weeklong meetings focused
on government agencies, education and schools, environmental organizations,
businesses and business organizations, arts, culture and heritage groups,
sports and recreation organizations and community and civic organizations.
(See Attachment B)
An extensive Community Needs & Interests Questionnaire was used to obtain
information as part of the Assessment to help identify changes that, might be
made to meet future cable- related needs. (See Attachment C)
Additionally, during the period of April 14 -April 24, 2002_a statistically
valid telephone survey of 400 completed interviews was conducted by
Group W Communications, LLC, North Hampton, NH. Interviews were
conducted utilizing a random sample from active residential telephone
listings in both Adelphia and Cox subscriber areas. Cross tabulation
analysis was also conducted utilizing demographic information provided
by respondents. Analysis: was also performed to determine significant
differences in responses of Adelphia and Cox subscribers.
The telephone survey is in draft form at this time. When it is finalized, it
can be made available to the public for review.
Tonight's Council meeting brings another opportunity for the community
to put its comments on the public record. A transcript of the meeting
will become a part of the record used to establish terms and conditions
for any and all upcoming franchise discussions with Adelphia and Cox,
or their subsidiaries should a sale occur. Following tonight's
presentation by Ms. Buske and subsequent public; input, Ms. Buske will
provide a complete and thorough Report to the Council (anticipated to be
delivered no later than November 29, 2002). At about that time, Special
Counsel Bill Marticorena of Rutan and Tucker will enter negotiations with the
cable providers in an attempt to complete the Agreements with both cable
companies by March, 2003.
ATTACHMENTS: Attachment A -- Area coverage map
Attachment B -- May 2002's Focus Group Schedule
Attachment C -- Community Needs Questionnaire
2
°Cable TV Franchise Areas
City of Newport Beach
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Cable Company
Adelphia
Cox
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• ® ATTACHMENT B
Are We Using Cable TV
To The Max?
Let's Make It
All That It CAN Be!
Join Us For A Cable Needs
Focus Group And Give Us Your Thoughts On
ghat You [giant Community Programming
To Provide In ,Newport Beach
Monday, May 20th
Government Agencies
10:00 a.m.—noon
City Council Chambers
3300 Newport Boulevard
Monday, May 20th
Education/ Schools
3:30 p.m. — 5:30 p.m.
Newport Harbor High School
600 Irvine Avenue
Tuesday, May 21st
Environmental Organizations
3:00 P.M. 5 :00 P.M.
Newport Beach Fire Conf. Room
3300 Newport Boulevard
Wednesday, May 22nd
Businesses /Business Organizations
10:00 a.m. — noon
NB Chamber of Commerce
1470 Jamboree Road
Wednesday, May 22nd
Arts, Culture & Heritage Groups
3:00 p.m. - 5:00 p.m.
Central Library Friends Meeting Rm
1000 Avocado Avenue
Wednesday, May 22nd
Sports & Recreation Organizations
7:00 p.m. -=9:00 p.m..
Central Library Friends Meeting Rm
1000 Avocado Avenue
Thursday, May 23a
Community & Civic-Organizations
7:00 P.M. - 9:00 P.M.
Oasis Senior Center Multi- Purpose Rm
800 Marguerite — Corona del Mar
For More Information Caff 949- 644 -3002
Or Visit NBTV News /Events At
www.citynewport- beach.ca. us
ATTACHMENT C
These questions are intended to obtain information about community needs and interests related to
cable TV. The information gathered will be used to assess whether current local cable TV services
and resources are adequate and appropriate, and help to identify changes that might be made to
meet future cable - related community needs and interests in Newport Beach.
1. Do you currently subscribe to cable TV service in Newport Beach?
_ Yes —No Vf "No,"skip to Question
2. Please indicate the name of your cable TV company:
Cox Communications _ Adelphia
3. Do you think the cable TV company should offer more channels?
Yes —No _ Maybe
4. a. What types of programming do you think should be more readily available on the
cable company's channel line -up? (Check all that apply.)
Arts /Cultural
Children's
Classic Movies
Comedy
Other:
Local news, activities, events, etc.
Documentaries
Educational
Music
News & Information
_ Sports
_ Religious
_ Recent Movies
b. If you checked any of the above, would you be willing to pay extra to receive
additional channels devoted to those types of programming?
Yes No — Maybe
5. Do you have a computer in your home?
_ Yes _ No 11f "No,"skip to Question 10 at the bottom of page
6. Is your home computer used to access the Internet?
Yes — No Iff "No," skip to Question 10 at the bottom of a e
7. Do you subscribe to the high- speed Internet connection service that is available through
the cable company?
_ Yes Vf "Yes," answer Question 7a on the next a
—No Vf "No, "answer Question 7b on the next a
-1-
4
7a. If "Yes" to Question Please rate your high -speed Internet service:
Very Good _ Good _ Fair _ Poor _ Very Poor
7b. Ilf "No" to Question 7 Why don't you subscribe to the cable company's high -speed
Internet service?
Too expensive _ Used to subscribe, but unhappy with service
Didn't know about the service
Other (specify):
8. During the past week, how long was your home computer used to access the Internet?
Under 5 hours 5 - 15 hours 16 - 25 hours
Over 25 hours Don't know
9. Has a personal or business "Web site" been created with your home computer?
Yes No
10. Please indicate how important you think it is for you to receive the following special
services by using the cable system:
Not
Very Not Very Important
Important Important Important At All
a. Movies on demand
b. Interactive shopping _
c. Interactive video games _
d. Video teleconferencing (2 way video) _
e. If you indicated "Very Important" or "Important" regarding any of the above special services,
would you be willing to pay an additional fee to obtain them?
Yes _ No _ Maybe
-2-
11. Certain improved services could be received through your television or home computer by
using a high speed connection to the Internet provided by the cable system. Please indicate
how important you think it is to receive the services described below through your N or
home computer.
Very
Important
a. Access to Library resources
(card catalog magazine
articles, encyclopedias, etc.)
b. Ability to vote, renew your _
driver's license or obtain
government permits from
home
c. Ability to send and receive _
e -mail and information to
and from teachers, school
administrators, and School
Board members
d. Access to government _
information (City government
meeting agendas, a listing of
City services and how to obtain
them, government reports, etc.)
e. Access to public safety
information (e.g., from police
and fire departments)
f. Ability to participate in
interactive distance learning
classes from your home
-3-
Not Very
Important Important
Not
Important
At All
t
NOTE. IF YOU DO NOT CURRENTLY SUBSCRIBE TO THE ADELPHIA OR COX
COMMUNICATIONS CABLE TV SERVICE IN NEWPORT BEACH, SKIP TO
QUESTION 26 ON PAGE 7.
12. Have you seen or would you be interested in seeing locally produced cable TV programs
about Newport Beach citizens, organizations, community events, schools, or local
government?
Yes Maybe No 11f "No," skip to Question 25 on page
13. ADELPHIA CABLE SUBSCRIBERS; SKIP TO QUESTION 20 ON PAGE 5.
COX COMMUNICATIONS CABLE SUBSCRIBERS:
Have you ever watched "Cox Channel 3 ", which features local sports, call -in, and other
programs that are produced by the staff of Cox Communications?
Yes _ No lif "No, " skip to Question 17 on page
14. How often did you watch "Cox Channel 3" during the past month?
More than 10 times
6 - 10 times
1 - 5 times
Never
15. Please describe or provide the names of the programs that you have watched on "Cox
Channel 3 ":
16. Is the signal quality for "Cox Channel 3" equal to the signal quality for programs on the
other channels of the cable system?
Yes No Don't Know
q
17. Have you ever watched the Newport Beach City Council meetings on cable channel 30?
Yes _ No If "No, " sk4p to Question 24 on page
18. How many times have you watched the Newport Beach City Council meetings on cable
channel 30 during 2002?
Once Twice Three times Four times Five times
More than five times Never Don't know
19. Is the signal quality for channel 30 equal to the signal quality for programs on the other
channels of the cable system?
Yes No Don't Know
20. JCOX COMMUNICATIONS CABLE SUBSCRIBERS: SKIP TO QUESTION 24 ON PAGE 6.
ADELPHIA CABLE SUBSCRIBERS:
Have you ever watched cable channel 3, which features Newport Beach City Council and
other local government meetings, public affairs programs, talk shows, and other local
programs?
Yes _ No If "No, " skip to Question 24 on page
21. How often did you watch cable channel 3 during the past month?
More than 10 times — 6 - 10 times _ 1 - 5 times _ Never
22. How many times have you watched the Newport Beach City Council meetings on cable
channel 3 during 2002?
Once Twice Three times Four times Five times
More than five times Never Don't know
23. Is the signal quality for channel 3 equal to the signal quality for programs on the other
channels of the cable system?
Yes No Don't Know
DELPHIA CABLE SUBSCRIBERS: GO TO QUESTION 24 ON THE NEXT PAGE.
-5-
I
24. Please indicate your level of interest in seeing each of the following types of locally
produced programs on your cable N service. Are you very interested, interested, not
very interested, or not interested at all?
VERY NOTVERY NOTINTERESTED
INTERESTED INTERESTED INTERESTED AT ALL
a. City government meetings _
b. Community festivals, neighborhood events
c. Consumer protection programs _
d. Courses from area colleges and universities
e. Environmental programs _
f. Ethnic and cultural programs
g. Events /activities sponsored by the City _
h. Foreign language programs _
i. High School equivalency courses
j. Informational programs about services and
activities of local organizations /clubs
k. Information regarding public emergencies _
I. Kindergarten through 12th grade _
instructional courses
m. Kindergarten through 12th, grader music and _
drama productions
n. Local business news and information _
o. Local health and wellness programs
p. Local public safety information
q. Local sports and recreational activities _
r. Programs about activities and concerns of
persons with disabilities
s. Programs about City government services
t. Programs about issues facing City _
government
u. Programs about K -12 schools and activities _
V. Programs of general .interest about the arts,
history and culture of Newport Beach
w. Religious programming (local churches) _
x. School Board meetings _
y. Senior citizen activities and concerns _
z. Special events and activities from area
colleges and universities
aa. Indicate other types of local programs that you would like to see:
25. How much of your monthly cable bill should be set aside to support the development of TV
programs about Newport Beach residents, organizations, events, schools, and government?
FOUR DOLLARS THREE DOLLARS TWO DOLLARS
ONE DOLLAR NOTHING OTHER:
NOTE. EVERYONE WHO COMPLETES THIS QUESTIONNAIRE, INCLUDING
SUBSCRIBERS & NON - SUBSCRIBERS TO CABLE TV IN NEWPORT
BEACH, SHOULD ANSWER THE FOLLOWING QUESTIONS.
26. How important do you think it is to have cable TV channels that feature programs about
Newport Beach residents, organizations, events, schools, and government?
Very Important _ Important _ Not Very Important _ Not Important at All
27. Would the organizations that you are involved with be interested in having programs
about their services and activities appear on a local cable TV channel ??
Yes —No
28. Would you be interested in learning how to make programs for presentation on a local
cable TV channel, using equipment provided free of charge?
Yes No
29. Thank you very much for your assistance. You are invited, but not required, to provide
any of the following information about yourself and /or the organization you are
associated with:
Name:
Organization:
Address:
Telephone Number:
-7-
N
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6,4 Adb4Aa
1a-It -e1
ORDINANCE NO. 2001 -23
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
NEWPORT BEACH AMENDING SECTION 4 OF
ORDINANCE NOS. 1196 AND 1997 TO EXTEND NOW
EXCLUSIVE FRANCHISES WITH ADELPHIA CABLE Ora 3v�1 a3
COMMUNICATIONS AND WITH COX COMMUNICATIONS )4k,,ev,,j
THIS ORDINANCE is made with respect to the following:
RECITALS
WHEREAS, by approving Ordinance No. 1197 and its later amendments within
Ordinances No 1365 and 91 -43, the City of Newport Beach entered into a cable
television franchise agreement ( "Franchise Agreement') with Adelphia Cable
Communications and its predecessor companies, Comcast Cablevision, Newport
Beach Cablevision Incorporated, and Warner Brothers TV Service, Incorporated on or
about December 7, 1966. The Franchise Agreement will expire on January 27, 2002;
and
WHEREAS, by approving Ordinance No. 1196 and its later amendments within
Ordinances No. 1891 and 91 -42, the City of Newport Beach entered into a cable
television franchise agreement ( "Franchise Agreement') with CoxCom, Incorporated
(dba Cox Communications) and its predecessor companies, Dimension Cablevision
and Community Cablevision, on or about December 7, 1966. The Franchise
Agreement will expire on January 27, 2002; and
WHEREAS, City and Adelphia and the City and CoxCom desire to extend each
respective Franchise Agreement for one year to allow for additional time for
negotiations to consider the renewal of each Franchise Agreement.
NOW THEREFORE the City Council of the City of Newport Beach does ordain as
follows:
SECTION 1: Section 4 of Ordinance No. 1196 is hereby amended to read as follows:
(a) This Franchise commenced January 27, 1967 and shall terminate on January
27, 2003.
SECTION 2: Section 4 of Ordinance No. 1197 is hereby amended to read as follows
(a) This Franchise commenced January 27, 1967 and shall terminate on January
27, 2003.
0
SECTION 3: This extension of Franchise shall not become effective until written
acceptance in the form attached to Ordinance as Exhibit "A" and Exhibit "B" has been
fully executed and filed with the City Clerk within 10 days after the adoption of this
Ordinance.
SECTION 4: If any section, subsection, sentence, clause or phrase of this ordinance is,
for any reason, held to be invalid or unconstitutional, such decision shall not affect the
validity or constitutionality of the remaining portions of this ordinance. The City Council
hereby declares that it would have passed this ordinance, and each section, subsection,
clause or phrase hereof, irrespective of the fact that any one or more sections,
subsections, sentences, clauses and phrases be declared unconstitutional.
SECTION 5: The Mayor shall sign and the City Clerk shall attest to the passage of this
ordinance. The City Clerk shall cause the same to be published once in the official
newspaper of the City, and it shall be effective thirty (30) days after its adoption.
This Ordinance was introduced at a regular meeting of the City Council of the City of
Newport Beach held on the 27th Day of November, 2001, and was adopted on the 11th
Day of December, 2001, by the following vote, to wit:
AYES, COUNCILMEMBERS Heffernan, O'Neil
Bromberg Glover. Adams Proctor. Mayor Ridgeway
NOES. COUNCILMEMBERS
ABSENT COUNCILMEMBERS
L�
MAYOR
ATTEST:
LaVonne Harkless, ClerkE
• •
FRANCHISE EXTENSION AGREEMENT
BETWEEN
THE CITY OF NEWPORT BEACH
AND
ADELPHIA CABLE COMMUNICATIONS
This Franchise Extension Agreement is entered into between the City of Newport
Beach and Century-TCI California LP, dba Adelphia Cable Communications
( "Adelphia ") this 11th Day of January, 2002, with regards to the following facts:
RECITALS
WHEREAS, by approving Ordinance No. 1197 and its later amendments within
Ordinances No 1365 and 91 -43, the City of Newport Beach entered into a cable
television franchise agreement ( "Franchise Agreement ") with Adelphia Cable
Communications and its predecessor companies, Comcast Cablevision, Newport
Beach Cablevision Incorporated, and Warner Brothers TV Service, Incorporated on or
about December 7, 1966. The Franchise Agreement will expire on January 27, 2002;
and
WHEREAS, City and Adelphia desire to extend the Franchise Agreement for one year
to allow for additional time for negotiations to consider the renewal of the Franchise
Agreement.
NOW THEREFORE, the Parties agree as follows:
1. The Franchise Agreement shall be extended to January 27, 2003. During said
extension, the terms and conditions of the current Franchise Agreement shall remain in
full force and effect without modification.
2. Both parties hereby reserve all rights under applicable provisions of the Cable
Communications Policy Act of 1984 (The "Cable Act'), including without limitation
Sections 626 and 635. Nothing herein shall be deemed or construed as a waiver,
release or surrender of any right that either party may have under the Cable Act or any
applicable law. Nothing herein shall waive, release or otherwise relieve the Operator, or
any predecessor thereof, from any Franchise Agreement breaches or violations, if any
exist, or other violations of law, if any, and the grant of this Franchise Agreement
extension shall not be utilized by the operator for any purpose other than to extend, and
document the extension„ of the Franchise Agreement through January 28, 2003.
EXHIBIT "A" 1
• •
IN WITNESS WHEREOF, the parties hereto have caused this franchise Extension
Agreement to be executed in duplicate on the date and year first written herein.
APPROVED AS TO FORM:
CITY OF NEWPORT BEACH
City Attorney
CITY OF NEWPORT BEACH: CENTURY -TCI CALIFORNIA L.P. d /b /a/
ADELPHIA CABLE COMMUNICATIONS
EXHIBIT "A" 2
FRANCHISE EXTENSION AGREEMENT
BETWEEN
THE CITY OF NEWPORT BEACH
AND
COXCOM INCORPORATED
This Franchise Extension Agreement is entered into between the City of Newport Beach
and CoxCom, Incorporated, dba Cox Communications Orange County ( "Cox ") this 11tH
Day of January, 2002, with regards to the following facts:
RECITALS
WHEREAS, by approving Ordinance No. 1196 and its later amendments within
Ordinances No. 1891 and 91 -42, the City of Newport Beach entered into a cable
television franchise agreement ( "Franchise Agreement') with CoxCom, Incorporated
(dba Cox Communications Orange County, a wholly -owned subsidiary of Cox
Communications, Inc., a Delaware Corporation.) and its predecessor companies,
Dimension Cablevision and Community Cablevision, on or about December 6, 1966.
The Franchise Agreement will expire on January 27, 2002; and
WHEREAS, City and Cox desire to extend the Franchise Agreement for one year to
allow for additional time for negotiations to consider the renewal of the Franchise
Agreement.
NOW THEREFORE, the Parties agree as follows:
1. The Franchise Agreement shall be extended to January 28, 2003. During said
extension, the terms and conditions of the current Franchise Agreement shall remain in
full force and effect without modification.
2. Both parties hereby reserve all rights under applicable provisions of the Cable
Communications Policy Act of 1984 (The "Cable Act'), including without limitation
Sections 626 and 635. Nothing herein shall be deemed or construed as a waiver,
release or surrender of any right that either party may have under the Cable Act or any
applicable law. Nothing herein shall waive, release or otherwise relieve the Operator, or
any predecessor thereof, from any Franchise Agreement breaches or violations, if any
exist, or other violations of law, if any, and the grant of this Franchise Agreement
extension shall not be utilized by the operator for any purpose other than to extend, and
document the extension, of the Franchise Agreement through January 28, 2003.
1
Exhibit °B"
IN WITNESS WHEREOF, the parties hereto have caused this franchise Extension
Agreement to be executed in duplicate on the date and year first written herein.
APPROVED AS TO FORM:
CITY OF NEWPORT BEACH
City Attorney
CITY OF NEWPORT BEACH: COXCOM, INCORPORATED d /b /a/
COX COMMUNICATIONS ORANGE COUNTY
2
Exhibit "B"
STATE OF CALIFORNIA }
COUNTY OF ORANGE
CITY OF NEWPORT BEACH }
I, LAVONNE M. HARKLESS, City Clerk of the City of Newport Beach, California, do
hereby certify that the whole number of members of the City Council is seven; that the foregoing
ordinance, being Ordinance No, 2001 -23 was duly and regularly introduced before and adopted by
the City Council of said City at a regular meeting of said Council, duly and regularly held on the
11th day of December 2001, and that the same was so passed and adopted by the following vote, to
wit:
Ayes: Heffernan; O'Neil, Bromberg, Glover, Adams, Proctor, Mayor Ridgeway
Noes: None
Absent: None
Abstain: None
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the
official seal of said City this 12th day of December 2001.
(Seal)
cAd
A. vas
City Clerk
City of Newport. Beach, California
CERTIFICATE OF PUBLICATION
STATE OF CALIFORNIA }
COUNTY OF ORANGE
CITY OF NEWPORT BEACH }
I, LAVONNE M HARKLESS, City Clerk of the City of Newport Beach, California, do hereby
certify that Ordinance No. 2001 -23 has been duly and regularly published according to law and the
order of the City Council of said City and that same was so published in The Daily Pilot, a daily
newspaper of general circulation on the following date, to wit: December 15, 2001.
2002.
In witness whereof, I have hereunto subscribed my name this day of
City Clerk
City of Newport Beach, California
i a (4E)
CITY OF NEWPORT BEACH November 27, 2001
CITY ATTORNEY'S OFFICE Agenda Item 3
TO : MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: ROBIN L. CLAUSON, ASSISTANT CITY ATTORNEY
RE ORDINANCE EXTENDING NON- EXCLUSIVE'`
FRANCHISES WITH ADELPHIA & COX CABLE r Asa`
COMMUNICATIONS
The Ad Hoc Telecommunications Committee' was formed by the City Council to review
City franchise agreements for cable television and to prepare for negotiations to renew
the Citys current franchises with Cox Communications and Adelphia Cable
Communications. The Telecommunications Committee has been reviewing its options for
future franchise negotiations and anticipates that a recommended selection for a
consultant will be brought to the City Council at its December 11'" meeting.
However, both the cable franchises will expire on January 27, 2002. At its November 19,,
2001, meeting, the Ad Hoc Telecommunications Committee unanimously recommended
that the City Council adopt the attached ordinance to extend both cable franchises for one
year. The Telecommunications Committee has adopted a work schedule that will
accomplish the negotiation so that a new cable franchise ordinance can be brought to the
City Council prior to January 2003.
RECOMMENDATION:
It is recommended that the City Council approve first reading and pass to second . reading
and adoption at the City Council's next regularly scheduled meeting.
V
Robin L. Clauson, Z. '
Assistant City Attorney
RC:da
Attachments
F:\ users\ cat\ shared\ da\ CCmemo \CoxAdelphiaExtFmnAgt.doc.doc
11�'(RODUr� OR-0IrI,AfJt¢ 2cq -23
• •
ORDINANCE NO. 2001-
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
NEWPORT BEACH AMENDING SECTION 4 OF
ORDINANCE NOS. 1196 AND 1997 TO EXTEND NOW
EXCLUSIVE FRANCHISES WITH ADELPHIA CABLE
COMMUNICATIONS AND WITH COX COMMUNICATIONS
THIS ORDINANCE is made with respect to the following:
RECITALS
WHEREAS, by approving Ordinance No. 1197 and its later amendments within
Ordinances No 1365 and . 91 -43, the City of Newport Beach entered into a cable
television franchise agreement ( "Franchise Agreement ") with Adelphia Cable
Communications and its predecessor companies, Comcast Cablevision, Newport
Beach Cablevision Incorporated, and Warner Brothers TV Service, Incorporated on or
about December 7, 1966. The Franchise Agreement will expire on January 27, 2002;
and
WHEREAS, by approving Ordinance No. 1196 and its later amendments within
Ordinances No. 1891 and 91-42, the City of Newport Beach entered into a cable
television franchise agreement ( "Franchise Agreement ") with CoxCom, Incorporated
(dba Cox Communications) and. its predecessor companies, Dimension Cablevision
and Community Cablevision, on or about December 7, 1966. The Franchise
Agreement will expire on January 27, 2002; and
WHEREAS, City and Adelphia and the City and CoxCom desire to extend each
respective Franchise Agreement for one year to allow for additional time for
negotiations to consider the renewal of each Franchise Agreement.
NOW THEREFORE the City Council of the City of Newport Beach does ordain as
follows:
SECTION 1: Section 4 of Ordinance No. 1196 is hereby amended to read as follows:
(a) This Franchise commenced January 27, 1967 and shall terminate on January
27, 2003.
SECTION 2: Section-4 of Ordinance No. 1197 is hereby amended to read as follows
(a) This Franchise commenced January 27, 1967 and shall terminate on January
27, 2003..
1
• 0
SECTION 3e This extension of Franchise shall not become effective until written
acceptance in the form attached to Ordinance as Exhibit °A" and Exhibit "B?' has been
fully executed and filed with the City Clerk within 10 days after the adoption of this
Ordinance.
SECTION 4: If any section, subsection, sentence; clause or phrase of this ordinance is,
for any reason, held to be invalid or unconstitutional, such decision shall not affect the
validity or constitutionality of the remaining portions of this ordinance. The City Council
hereby declares that it would have passed this ordinance; and each section, subsection,
clause or phrase hereof, irrespective of the fact that any one or more sections,
subsections, sentences, clauses and phrases be declared unconstitutional.
SECTION 5: The Mayor shall sign and the City Clerk shall attest to the passage of this
ordinance. The City Clerk shall cause the same to be published once in the official
newspaper of the City, and it shall be effective thirty (30) days after its adoption.
This Ordinance was introduced at a regular meeting of the City Council of the City of
Newport Beach held on the 27^ Day of November, 2001, and was adopted on the 1 V
Day of December, 2001, by the following vote, to wit:
AYES; COUNCILMEMBERS
NOES, COUNCILMEMBERS
ABSENT,COUNCI LM EMBERS
►�
LaVonne Harkless, City Clerk
F: \us ers\cat\shared \da\ Ordinance \Cox&AdelphiaExtFranAgt.d oc
Mayor
2
FRANCHISE EXTENSION AGREEMENT
BETWEEN
THE CITY OF NEWPORT BEACH
AND
ADELPHIA CABLE COMMUNICATIONS
This Franchise Extension Agreement is entered into between the City of Newport
Beach and Century-TCI California LP, dba Adelphia Cable Communications
( "Adelphia ") this 11 h Day of January, 2002, with regards to the following facts:
RECITALS
WHEREAS, by approving Ordinance No. 1197 and its later amendments within
Ordinances No 1365 and 91-43, the City of Newport Beach entered into a cable
television franchise agreement ( "Franchise Agreement ") with Adelphia Cable
Communications and its predecessor companies, Comcast Cablevision, Newport
Beach Cablevision Incorporated, and Warner Brothers TV Service, Incorporated on or
about December 7, 1966. The Franchise Agreement will expire on January 27, 2002;
and
WHEREAS, City and Adelphia desire to extend the Franchise Agreement for one year
to allow for additional time for negotiations to consider the renewal of the Franchise
Agreement.
NOW THEREFORE, the Parties agree as follows:
1. The Franchise Agreement shall be extended to January 27, 2003. During said
extension, the terms and conditions of the current Franchise Agreement shall remain in
full force and effect without modification.
2. Both parties hereby reserve all rights under applicable provisions of the Cable
Communications Policy Act of 1984 (The "Cable Act "),. including without limitation
Sections 626 and 635. Nothing herein shall be deemed or construed as a waiver,
release or surrender of any right that either party may have under the Cable Act or any
applicable law. Nothing herein shall waive, release or otherwise relieve the Operator,
or any predecessor thereof, from any Franchise Agreement breaches or violations, if
any exist, or other violations of law, if any, and the grant of this Franchise Agreement
extension shall not be utilized by the operator for any purpose other than to extend, and
document the extension, of the Franchise Agreement through January 28, 2003.
EXHIBIT "A" 1
.µ
IN WITNESS WHEREOF, the parties hereto have caused this franchise Extension
Agreement to be executed in duplicate on the date and year first written herein.
APPROVED AS TO FORM:
CITY OF NEWPORT BEACH
City Attorney
CITY OF NEWPORT BEACH: CENTURY -TCI CALIFORNIA L.P. d /b /a/
ADELPHIA CABLE COMMUNICATIONS
F:\ users\ cat\ shared \da\Ag\AdelphiaExtFranAgt.doc
EXHIBIT "A"
2
0 i
FRANCHISE EXTENSION AGREEMENT
BETWEEN
THE CITY OF NEWPORT BEACH
AND
COXCOM INCORPORATED
This Franchise Extension Agreement is entered into between the City of Newport Beach
and CoxCom, Incorporated, dba Cox Communications Orange County ( "Cox ") this 11�'
Day of January, 2002, with regards to the following facts:
RECITALS
WHEREAS, by approving Ordinance No. 1196 and its later amendments within
Ordinances No. 1891 and 91-42, the City of Newport Beach entered into a cable
television franchise agreement ( "Franchise Agreement ") with CoxCom, Incorporated
(dba Cox Communications Orange County, a wholly -owned subsidiary of Cox
Communications, Inc., a Delaware Corporation.) and its predecessor companies,
Dimension Cablevision and Community Cabievision, on or about December 6, 1966.
The Franchise Agreement will expire on January 27, 2002; and
WHEREAS, City and Cox desire to extend the Franchise Agreement for one year to
allow for additional time for negotiations to consider the renewal of the Franchise
Agreement.
NOW THEREFORE, the Parties agree as follows:
1. The Franchise Agreement shall be extended to January 28, 2003. During. said.
extension, the terms and conditions of the current Franchise Agreement shall remain in
full force and effect without modification.
2. Both parties hereby reserve all rights under applicable provisions of the Cable
Communications Policy Act of 1984 (The "Cable Act"), including without limitation
Sections 626 and 635. Nothing herein shall be deemed or construed as a waiver,
release or surrender of any right that either party may have under the Cable Act or any
applicable law. Nothing herein shall waive; release or otherwise relieve the Operator, or
any predecessor thereof, from any Franchise Agreement breaches or violations, if any
exist, or other violations of law, if any, and the grant of this Franchise Agreement
extension shall not be utilized by the operator for any purpose other than to extend, and
document the extension, of the Franchise Agreement through January 28, 2003.
Exhibit "B"
• r �
0 •
IN WITNESS WHEREOF, the parties hereto have caused this franchise Extension
Agreement to be executed in duplicate on the date and year first written herein.
APPROVED AS TO FORM:
CITY OF NEWPORT BEACH
City Attorney
CITY OF NEWPORT BEACH: COXCOM, INCORPORATED d /b /a/
COX COMMUNICATIONS ORANGE COUNTY
F;\ users\ caflshared \da\Ag \CoxFranExtAgLdoc
Exhibit "B"
Z
11
0
CITY OF NEWPORT BEACH
MEMORANDUM
TO: Mayor and Members of the Newport Beach City Council
FROM: Dave Kiff, Deputy City Manager
Robin Clauson, Assistant City Attorney
DATE: October 24, 2000
RE: Study Session on Cable Television and Telecommunications
Here are the Cable TV and Telecommunications issues that we believe need to be
addressed by the City in the coming twelve to eighteen months. As you will see, we
recommend that the Council form an ad hoc committee on Cable TV and
Telecommunications to address the issues and accomplish the tasks that follow.
1- MUNICIPAL CODE RELATING TO TELECOM IS OUTDATED
ISSUE: Were not ready for the Year 2002. The City's municipal code chapters
that relate to cable television and telecommunications require significant
amendments before the City can enter into any effective franchise
agreements or use permits with providers of cable television or wireless
communication.
BACKGR'D: Both the Comcast and Cox franchise agreements for cable television
service to the residents of expire on January 27, 2002. The existing
Agreements - circa 1966 - contain information and requirements that
may have been superceded by Federal action on telecommunications
(please see a summary of these aspects in Attachment A).
Assistant City Attorney Robin Clauson has developed a draft
telecommunications ordinance that can be updated to reflect the latest
FCC regulations. We also have a copy of a more generic
telecommunications ordinance developed by William Marticorena of
Rutan and Tucker and used by many other cities.
Part of the City's new telecommunications ordinance should address
whether or not the City wants to assess an encroachment fee for the use of
city streets. Other cities are considering encroachment fees of from $1.80
to $3.65 per lineal foot.
City Hall • 3300 Newport Boulevard • Post Office Box 1768 • Newport Beach, California 92659 -1768
October 24, .2000
C�2)
Study Session Item
SS3
CITY OF NEWPORT BEACH
MEMORANDUM
TO: Mayor and Members of the Newport Beach City Council
FROM: Dave Kiff, Deputy City Manager
Robin Clauson, Assistant City Attorney
DATE: October 24, 2000
RE: Study Session on Cable Television and Telecommunications
Here are the Cable TV and Telecommunications issues that we believe need to be
addressed by the City in the coming twelve to eighteen months. As you will see, we
recommend that the Council form an ad hoc committee on Cable TV and
Telecommunications to address the issues and accomplish the tasks that follow.
1- MUNICIPAL CODE RELATING TO TELECOM IS OUTDATED
ISSUE: Were not ready for the Year 2002. The City's municipal code chapters
that relate to cable television and telecommunications require significant
amendments before the City can enter into any effective franchise
agreements or use permits with providers of cable television or wireless
communication.
BACKGR'D: Both the Comcast and Cox franchise agreements for cable television
service to the residents of expire on January 27, 2002. The existing
Agreements - circa 1966 - contain information and requirements that
may have been superceded by Federal action on telecommunications
(please see a summary of these aspects in Attachment A).
Assistant City Attorney Robin Clauson has developed a draft
telecommunications ordinance that can be updated to reflect the latest
FCC regulations. We also have a copy of a more generic
telecommunications ordinance developed by William Marticorena of
Rutan and Tucker and used by many other cities.
Part of the City's new telecommunications ordinance should address
whether or not the City wants to assess an encroachment fee for the use of
city streets. Other cities are considering encroachment fees of from $1.80
to $3.65 per lineal foot.
City Hall • 3300 Newport Boulevard • Post Office Box 1768 • Newport Beach, California 92659 -1768
r
Cable Study Session Agenda Item �
October 24, 2000
Page 2
TASKS: • Form Committee. Appoint an ad hoc Council Committee on Cable
TV/ Telecommunications to address the issues outlined in the entirety of
this memorandum.
• Update or Create New Ordinances. Direct Council Committee to work
with City staff to update the City's Cable Television Ordinance and to
create a separate Telecommunications ordinance (addressing wireless
services, street encroachment fees, city infrastructure use fees, and
antenna siting).
2 - FRANCHISE RENEWAL PREPARATIONS
ISSUE: The City's two major cable television franchise agreements with Cox
Communications and Comcast /Adelphia will expire on January 27, 2002.
What should the City be doing to prepare for the Agreements' expiration?
BACKGR'D: As noted previously, the City's two franchise agreements (one with Cox
Communications and one with Comcast) appear as codified ordinances
per the City Charter. Both were developed in 1966 and later amended
several times. Because neither reflects the regulatory environment in
place today, the Agreements must be re -written upon renewal based on a
new Cable Television ordinance yet to be adopted by the City Council.
As an important note to the Council and to Newport Beach residents, our
colleagues in other cities tell us that it is "virtually impossible' to deny a
franchise agreement to an existing provider who seeks a renewal unless
the provider has seriously compromised service or has a demonstrated
inability to provide the level of service expected by the community.
Remember that the "plant" in the streets (and on telephone wires) - cable
lines, amplifiers, node infrastructure, etcetera — is the -not the property of
the City but the property of the existing cable company.
That said, an important part of any franchise renewal is the preparation
of a Community Needs Assessment. The Needs Assessment is an
analysis - based on extensive public input - of the television, high - speed
data, service standard, and cable- related telecommunications needs of a
community. The City needs to begin planning and convening this Needs
Assessment right away so that it is completed in time for franchise
renewal talks.
TASKS: • Update or Create New Ordinances. Direct Council Committee to work
with City staff to update the City's Cable Television Ordinance.
• Community Needs Assessment. Direct ad hoc committee to develop
and conduct (with staff or expert assistance) a Community Needs •
Assessment between now and June 2001.
Cable TV e�erom Study Session Agenda Item
October 24, 2000
Page 3
0 3 - COMCAST CUSTOMERS MAY BE UNAWARE OF PENDING "SWAP"
ISSUE: Comcast will soon be leaving Southern California after "swapping" its
local customer base with Adelphia Communications. Do we know what
effect this swap will have on service? On rates? On the franchise? How
should this information be communicated to Newport Beach residents?
BACKGR'D: Depending upon the date at which the Federal Communications
Commission ( "FCC ") approves the customer transfer from Comcast to
Adelphia, residents in about2 /3rds of Newport Beach who today
subscribe to Comcast will have a new cable TV provider - Adelphia
Communications of Philadelphia, PA. See Attachment B for information
about Adelphia taken from adelphia.com, the company's website.
The City has retained William Marticorena of Rutan and Tucker to
represent the City in this transfer. Mr. Marticorena also represents
several other cities that will see Comcast swap its subscribers to
Adelphia.
TASKS: • Communication Plan. Inquire with Comcast / Adelphia as to
Adelphia s plans to communicate the transfer of service from Comcast.
• Contents of Plan. Direct Comcast / Adelphia to provide critical
information about pending transfer to subscribers in a timely manner,
including local phone numbers and bill payment/ service office.
4 - SUBSCRIBERS UNAWARE OF CITY'S INABILITY TO CONTROL RATE HIKES
ISSUE: Newport Beach cable customers have seen a series of significant cable rate
hikes. Customers often think that the City has a "say' in the increases.
What CAN the City do regarding rate increases?
BACKGR'D; As cable customers are well aware, the rate of increase in cable bills has
been higher in recent years than the rate of inflation. From 1998 to 1999,
the FCC reported that cable rates went up by 6.9 %, resulting in an
average cable bill (nationwide) o£$30.53. The same FCC report said that
rates in areas subject to "effective competition' went up by 5.8% and the
average cable bill was $28.71 per month.
Here is the approximate increase in cable bills for limited basic, cable
programming services tier, and special services from Cox and Comcast in
1998, 1999, and the rates proposed for 2000:
40
Cable T , elemm Study Session Agenda Item
October 24, 2000
Page 4
Newport Area Cable Rates - 7998 -2000 0
The average increase for both Comcast and Cox during the two -year
period was about 5.2% annually. This compares to a 3.4% change in the
Consumer Price Index (All Urban Consumers, August 1999 to August
2000) and a 2.7% annualized change for the first eight months of 1999.
Readers will note the non -existent or modest increase in prices on the
Limited Basic Tier of channels (typically channels 2 -13). Local
governments retain the ability to "regulate' this tier. Previous to March
1999, municipalities could file a "Form 328" to raise questions about rate
hikes in the Cable Programming Services Tier ( "standard service" above).
The City filed a Form 329 on Comcases 1999 rate hike - the FCC
responded later that the hike was appropriate.
With the CPST rate deregulation in March 1999, the City has no direct
authority to review or regulate CPST rates. Complaints about these rate
increases should be filed individually with the FCC (www.fcc.gov).
TASK: • Public Information. Direct ad hoc Committee to explain City's
regulatory ability (of lack thereof) through the Community Needs
Assessment process.
5 - TELECOM HIGH TECH - WHAT SHOULD BE THE CITY'S POSTURE?
ISSUE: Video, audio, and Internet communication technology is changing
rapidly. What should the City's posture be regarding the Telecom
industry and its interest in the Newport Beach customer base?
BACKGR'D: More and more information services can, be delivered through a cable
line. Some information services are bypassing "hard" infrastructure
entirely, using satellites and a series of antennas to transmit voice and
data. These technologies and the companies that provide them include:
• Overbuilders or Newbuilders. In a practice that was unheard of as
recently as two years ago, new telecom companies (RCN and Wide
Open West) now compete directly with more established cable TV
providers for a variety of cable services. Newbuilders enter into
Comcast
Cox
1998
1999
2000
1998
1999
2000
Limited Basic
$11.57
$11.57
$11.57
$13.27
$13.36
$13,93
Standard Service
$19.26
$21.16
$23.16
$16.13
$21.63
$23.06
Value Pak/Cox Plus
$5.41
$5.41
$5.41
$3.99
Complete Basic
$36.55
$38.45
$40.45
$33.39
$34.99
$36.99
The average increase for both Comcast and Cox during the two -year
period was about 5.2% annually. This compares to a 3.4% change in the
Consumer Price Index (All Urban Consumers, August 1999 to August
2000) and a 2.7% annualized change for the first eight months of 1999.
Readers will note the non -existent or modest increase in prices on the
Limited Basic Tier of channels (typically channels 2 -13). Local
governments retain the ability to "regulate' this tier. Previous to March
1999, municipalities could file a "Form 328" to raise questions about rate
hikes in the Cable Programming Services Tier ( "standard service" above).
The City filed a Form 329 on Comcases 1999 rate hike - the FCC
responded later that the hike was appropriate.
With the CPST rate deregulation in March 1999, the City has no direct
authority to review or regulate CPST rates. Complaints about these rate
increases should be filed individually with the FCC (www.fcc.gov).
TASK: • Public Information. Direct ad hoc Committee to explain City's
regulatory ability (of lack thereof) through the Community Needs
Assessment process.
5 - TELECOM HIGH TECH - WHAT SHOULD BE THE CITY'S POSTURE?
ISSUE: Video, audio, and Internet communication technology is changing
rapidly. What should the City's posture be regarding the Telecom
industry and its interest in the Newport Beach customer base?
BACKGR'D: More and more information services can, be delivered through a cable
line. Some information services are bypassing "hard" infrastructure
entirely, using satellites and a series of antennas to transmit voice and
data. These technologies and the companies that provide them include:
• Overbuilders or Newbuilders. In a practice that was unheard of as
recently as two years ago, new telecom companies (RCN and Wide
Open West) now compete directly with more established cable TV
providers for a variety of cable services. Newbuilders enter into
Cable TV �ecom. Study Session Agenda Item
October 24, 2000
Page 5
® franchise agreements' with cities where there is an existing cable
provider and compete directly with the provider for cable TV,
telephone, Internet, and high -speed data services. Newbuilders require
permits for street cuts just like existing cable companies.
• Cable Providers and Telephony/High Speed Data. Cox
Communications has been one of the more active proponents of
providing local and long distance phone service over their existing
cable.lines. Both Cox and Comcast /Adelphia provide high -speed data
service to most areas in cooperation with Excite@Home.
s Phone. Companies and High -Speed Data.. Digital Subscriber Line
Service ( "DSL ") is a recently - offered technology that transmits Internet
and other high -speed data over existing phone lines. PacBell is a major
provider of DSL service.
• Wireless Internet/Voice/Data. Verizon, Nextel, and others provide
local and long - distance voice communications using satellites and /or
extensive antenna -based transmission infrastructure. In several recent
instances, companies which "site" antennas for the major voice
communication players have asked to use City facilities for these
antennas. The City has already negotiated an Agreement (circa 1998)
with Metricom to provide Internet and data over a similar "over-the-
air" system with antennas placed on city- owned street lights.
The economic demographics of Newport Beach make us a prime target
for the entire range of services provided by telecom companies. The
Council may wish to adopt a formal Council Policy regarding City Staff's
posture to the companies- to ensure that our residents get a full range of
telecom services (and to increase the City's revenue), should we market
ourselves and our facilities as sites for more telecom facilities? Or -
because we cannot ban such facilities outright - should we take a less
welcoming role in reviewing infrastructure applications?
TASK: • New Council Policy. Direct the ad hoc Council Committee to develop a
Council Policy relating to the manner in which the City reviews and
approves requests for telecommunications infrastructure easements.
Cable P�eleeom Study: Session. Agenda Item
October 24, 2000
Page '6
ATTACHMENT A
Excerpts from a memo to the Newport Beach City Council
dated June 11, 1998
NOTE: changes from 061108 version denoted in Italics
CABLE TELEVISION
Several different laws, ordinances, and agreements dictate "what we do" with Cable TV. These
include:
• Three Federal acts relating to Cable TV and Communications (1984 Cable Act, 1992
Cable Act, and 1996 Telecommunications Act)
• The Newport Beach Municipal Code (Chapter 5.44) and City Charter (Article X111)
• The City's Franchise Agreement with Comcast Cablevision
• The City's Franchise Agreement with Cox Community Cablevision
Here is a summary of each - skip to the end to see a side -by -side of what cable companies, the
City, and the FCC can and cannot do:
I — FEDERAL COMMUNICATIONS COMMISSION (FCC) AUTHORITY
* 1984 Cable Act. The Federal Communications Commission (FCC) established new policies
over cable TV via the Cable Communications Policy Act of 1984. Among other things, the 1984
Act began to define the boundaries between federal, state, and local governments. The 1984 Act
requires cable companies to act under franchise agreements and prohibits local governments
from offering exclusive franchise agreements. This Act also limited the cable franchise fee to 5 %
of the cable company's gross annual revenue.
The 1984 Act also:
• Allowed local agencies to require that cable companies set aside channels for public,
educational, or governmental (PEG) use.
• Established "leased commercial access" allowances so that parties other than the cable
company could air video programming without cable company oversight.
• Placed restrictions on telephone companies that wanted to provide, television service.
* 1992 Cable Act. In response to price hikes in the cable industry that far outpaced inflation,
Congress passed the Cable Television Consumer Protection and Competition Act of 1992. The
1992 Act stated the FCC's hope that the market would begin to regulate cable TV activities while
still protecting consumer interests. Under the 1992 Act, local governments could select a cable
franchisee and regulate in any areas that the FCC did not pre -empt. Prior to 1992, local
governments could regulate all rates - but with the 1992 Act in place, the FCC took over rate
regulation of the cable programming tier (see below) and allowed cable companies to be
completely exempt from rate regulation if they could show that the cable companies were subject
to "effective competition" in a'region'.
In the 1992 Act, the FCC defines three tiers of cable services:
' Comcast recently asked. the FCC to exempt its Newport Beach operations from any rate regulation due to "effective
competition "$y Pacific Bell Video Services, On May 1, 1998, the FCC. denied Comeast's request. On June 4, 1998;
Comcast appealed the FCC's: decision.
® Cable TV�com. Study Session. Agenda Item.
October 24, 2000
Page 7
• • the basic service tier (lower channels originating in the region which must be carried by
the cable company). Local governments may regulate Yates associated with this tier
when certified by the FCC to do so.
• the cable programming service tier ( "CPST ") - this includes all non -basic channels
provided by a cable company but not sold on a pay -per -view basis. Effective March 31,
1999, the FCC has declared this tier of service, subject to "effective competition" and NO
LONGER regulates rate changes to this tier.
• the per channel or per- program tier - provided as single channels for which the
cable company charges a separate rate. This tier is unregulated.
Per the 1992 Act, local governments must apply for certification with the Commission if they
want to regulate rates in the basic service tier. We can do so by submitting a "Form 328" to the
FCC. The City has not asked the FCC to certify the City as a basic tier regulator. This is in part
because cable companies rarely, if ever, increase their rates on the basic tier since the
development of the 1992 Act - in recent years, cable companies have reduced and/or maintained
their basic tier rates while increasing their CPST rates..
Another important aspect of the 1992 Act set customer service standards for cable companies - all
of which must be enforced by local franchise authorities.. Pursuant to the standards, cable
companies must:
Phone and Billing Services
• Maintain a local phone line available 24 hours, seven days a week.
• Not use voice mail during working hours - a real person must answer the phone.
• Place its bill payment office in a convenient location. The officemustbe open at least one
night a week and /or some weekend hours.
• Answer all calls to the cable company office within 30 seconds of the time that a connection
is made.
Installations and Service Calls
• Complete a standard installation within seven days of a service call.
• Begin working on a service interruption call within 24 hours of notification.
• Offer specific appointment times or four-hour blocks of time for all service calls.
• Have installers call if they are running late to reschedule at the customer's convenience.
Rate or Service Changes
• Give 30 days advanced notice for all rate or service changes.
• Respond to billing complaints within 30 days.
* 1996 Telecom Act. Most recently, Congress amended the laws even further via the adoption of
the Telecommunications Act of 1996. The 1996 Act was an attempt to accelerate private sector
deployment of services to all residents by opening up all telecom markets to competition,
including allowing cable companies to provide phone service and vice- versa.
The 1996 Act provided that the CPST would be subject to FCC regulation until March 31, 1999.
The Act also prohibited individuals from sending complaints directly to the FCC - instead,
individuals must file complaints with the franchise authority (us) and we forward one or more
complaints to the FCC for review via an FCC "Form 329." Before sending a complaint to the
FCC, we must notify the cable company of the complaint and allow them 30 days to respond. We
followed this process earlier this year in forwarding a rate complaint by a resident.
u
Cable :*/ 7 etecom Study Session. Agenda Item.
October 24; 2000
Page 8
The 1996 Act also: 0
• Requires television manufacturers to equip their TVs with a V -Chip.
• Requires broadcast and cable industry representative to develop voluntary rules that rate
programs for sexual or violent content.
• Requires cable companies to fully scramble audio and video channels not specifically
subscribed by a household.
• Allowed some telephone companies to provide video programming via open video systems
(Pacific Bell Video Service [ "PBVS "l is an open video system that delivers both local
programming and national channels via a small dish or antenna). The 1996 Act exempted
these systems from city franchise requirements.
• Limits local franchise authority fees to revenue derived from "cable services."
I1 -- NEWPORT BEACH MUNICIPAL CODE (Chapter 5.44) AND CITY
CHARTER (Article )III)
The City's municipal code section relating to Community Antenna Television (CATV) is found in
Chapter 5 (Business Licenses and Regulations), subchapter 44. Much of the Chapter is likely to
have been pre- empted by the 1992 and 1996 changes to federal law. The Chapter includes the
following definitions and directives:
•'Defines "gross annual receipts" as any and all compensation resulting from the
operation of a cable TV system in Newport Beach, but not the franchise fee imposed by
the City. In other words, a cable company's calculation of the 5% franchise fee cannot
include the line item on the bill that charges the franchise fee itself. REMAINS IN •
EFFECT. This ' franchisejee on a franchise fee" - also known as "fee-on-fee" was subject to
court challenge since I rorote this memo. Today, ' fee -on fee' is legal.
• Describes the process by which a cable company files a franchise application with the
City (along with a $1,000 franchise application fee). MAY HAVE BEEN PRE- EMPTED.
• Directs the City to award a franchise with a term between 10 and 25 years. To
terminate a franchise prior to end -of -term, the City must find that a cable company has
"violated a material term or condition" of its franchise OR that any part of Chapter 5.44
has become unenforceable and has materially changed the franchise OR the City must
acquire the cable TV system. MAY HAVE BEEN PRE- EMPTED.
• Allows the City to inspect the cable company's records at anytime. MAY HAVE BEEN
PRE- EMPTED.
• Empowers the City Manager to settle any controversy arising between the cable
company and the City or subscribers "in the best interests of the public." MAY HAVE
BEEN PRE- EMPTED IN WHOLE OR IN PART.
• Directs the City Council to set a franchise fee of not less than 3% of the cable
company's gross annual receipts (paid to the City quarterly). REMAINS IN EFFECT.
• Describes the proper operation of the "Newport Beach Community Channel" which
must be cablecast on the same channel number on all cable systems in the City. The
channel number can be designated by mutual agreement between the franchisees. The
Channel must include live broadcasts of all regular meetings of the City Council, at
least one re- broadcast of the meetings, and up to 20 hours of community affairs
programs per month as designated by the City Manager. When the Channel is not
broadcasting local origination material, the cable company can run advertising that
® Cable TV/T• m Study Session Agenda item
October 24, 2000
Page 9
"promotes primarily persons maintaining an office within the city..." The cable
company can collect afee for ads broadcast on the Community Channel. REMAINS IN
EFFECT.
• Requires the cable company to keep a toll -free phone number in the City as well as a
service and billing office within the main franchise area. Any subscriber complaint
must be addressed within 24 hours via correcting the problem or scheduling a service
call within 48 hours. MAY HAVE BEEN PRE- EMPTED.
• Allows the City Council to review and approve all rates and charges for cable services
"to the extent permitted by State or Federal statutes." MOST RATE REGULATION
PRE-EMPTED.
• Allows the City Council to determine which franchisee serves a newly annexed area,
unless the area contains a completed or commenced cable TV system. In the latter case,
the area must be served by the cable company owning the system. MAY HAVE BEEN
PRE- EMPTED.
Please note that the City Charter also has a section on franchises (Article X111). Article X1II
requires the City Council to adopt franchises via ordinance and to hold a public hearing prior to
granting a franchise. It limits all franchise terms to 25 years or less if a determinate term is stated.
The Article allows indeterminate terms but specifies that the City has a right to end the franchise
and possess the franchisee's property if the franchisee is out of compliance with the franchise
agreement (Section 1302).
III -- COMCAST CABLEVISION FRANCHISE AGREEMENT
Comcast Franchise Agreement Information:
• Agreement adopted December 1966 -15 -year term (to 1981).
• Amended December 1970 - term reset again to 15 years (to 1986).
• Amended April 1986- term extended by five years (to 1991)
• Amended October 1991 - term extended to January 27, 2002.
Current Comcast Service Area
Old Corona Del Mar Linda Isle Westcliff
Cameo Shores /Highlands Newport Shores Eastbluff
Balboa Island West Newport The Bluffs
Balboa Peninsula Newport Terrace Irvine Terrace
Harbor Island Newport Heights
Lido Isle Dover Shores
What the Comcast Franchise Agreement Says:
• Comcast has the non - exclusive right (meaning that another cable company could come in
Comcast's area and attempt to provide cable TV service) to operate a cable TV system within
the City of Newport Beach during the Franchise's term. Comcast's "primary franchise area"
is described above.
• Comcast cannot sell or repair TV sets, provide any repair beyond fixing its cable service, and
cannot assist other companies in soliciting Comcast subscribers to buy service that Comcast
itself doesn't provide.
• • On or before January 1994, Comcast has to provide a dedicated educational access channel
and a dedicated fire department channel.
• Cable T relecon. Study Session Agenda Item
October 24, 2000
Page 10
• On or before January 1997, Comcast has to modify its cable system so that it can transmit 54
or more channels to its subscribers.
IV -- COX COMMUNITY CABLEVISION FRANCHISE AGREEMENT
Cox Franchise Agreement Information:
Agreement adopted December 1966 -15 -year term (to 1981).
• Amended November 1981 - term extended for ten years (to 1991).
• Amended October 1991 - tern extended to January 27, 2002.
Current Cox2 Service Area:
Newport Center Harbor View Hills Bonita Creek
Jasmine Creek Harbor Ridge Newport Coast
Big Canyon Spyglass Hill Newport Ridge
Bonita Canyon Belcourt
What the Cox Franchise Agreement Says:
• Cox has the non - exclusive right to operate a cable TV system within the City of Newport
Beach during the Franchise's term. Cox' "primary franchise area' is described above.
• Cox cannot provide any repair beyond fixing its cable service, and cannot assist other
companies in soliciting Cox subscribers to buy a service that Cox itself doesn't provide.
• On or before January 1994, Cox has to provide a dedicated educational access channel and a
dedicated fire department channel.
• On or before January 1997, Cox has to modify its cable system so that it can transmit 54 or
more channels to its subscribers.
SUMMARY
Here's a quick summary of *hat we can and cannot do given the FCC's jurisdiction, the City's
Municipal Code and Charter, and the two franchise agreements:
ComcasVCox
City of Newport Beach
FCC
• Has right to continue service to Newport
• Can forward cable programming ing services
• May rescind an improper rate increase on
Beach customers in franchise areas
tier rate complaints to FCC for review via
cable programming services tier through
through January 27, 2002 unless
Form 329.
March 1999.
negligent.
• Can 'regulate" rate increases on basic
• May deem a cable company exempt from
• Can propose any rate increase on pay-
services tier if "certified" by FCC via
any rate regulation due to presence of
per -view tier without regulation.
Form 328.
effective competition.
• Can propose any rate increase on cable
• Can enforce service response standards
programming services tier without
in the 1992 Cable. Act.
regulation after March 1999.
• Can require compliance with those
• Must adhere to service response
portions of Franchise Agreements and
standards in the 1992 Cable Act.
Municipal Code not pre- empted by
• Can petition FCC for waiver of all rate
Federal law.
regulation if subject. to -effective
•Can adopt cable franchise agree -ments
competition." Comcast recently dune 4, with terms from 10-25 years
1998) appealed the: FCCs denial of its
"effective competition' claim.
2 There are several areas of the City where the "primary franchise area" overlaps between Commst and Cox. These
areas include Newport Dunes, the Coast side of Bayside Drive, Promontory Point, the Hyatt Newporter, Harbor Cove, the
Park Newport Apartments, Bayview Terrace and Court, and the John Wayne Airport Area.
0
From ADELPHIA.COM
ATTACHMENT B
11
Adelphia: The Company
Imagine working for a company that began with a vision and a few strings of cable that
turned $300 into a: multi- billion dollar telecommunications leader; customer care company
that satisfies the customer and supports you; technology innovator that demands your skills
and creativity and rewards them, company that feels like family, but is big enough to outpace
the "neighbors."
Who is Adelphia?
"Adelphia ", which is Greek for "brothers," began almost 50 years ago by the Rigas brothers,
John and Gus. John Rigas, CEO, continues the tradition of loyalty, friendliness, trust, support,
and open communication that the company was founded upon.
Today, a new generation of brothers, John's sons - Michael, Timothy and James - manage
Adelphia's financial and strategic operations. They are committed to sustaining the company's
original values and spirit as the Adelphia family grows.
What is Adelphia?
Adelphia owns and operates one of the nation's largest broadband communication networks.
We are a leader in: Cable entertainment, Digital cable, Local voice and long distance
telephone services, Messaging, Enhanced data and high -speed Internet services.
• Where is Adelphia?
Adelphia maintains hundreds of remote locations throughout the United States providing
personalized local service to our customers. Adelphiai Adelphia Media Services and Adelphia
Business Solutions are all headquartered in Coudersport, a rural community in North Central
Pennsylvania.
•
The Organization
Adelphia is comprised of a family of companies including:
Adelphia Communications - Cable Entertainment, Digital Cable, High -Speed Internet
Services, Paging Services, Long Distance, Security (alarms)
Adelphia Media Services - local cable advertising, national spot cable advertising
Adelphia Business Solutions - Local voice, long distance, enhanced data, high -speed
Internet service, messaging,
Sports Interests - Empire Sports Network, Buffalo Sabres, HSBC Arena (Buffalo, NY)
International Interests - Supercable AKL International, a cable partnership in Brazil
City Hall . 3300 Newport Boulevard . Post Office Box 1768 • Newport Beach, California 92659 -1768