HomeMy WebLinkAbout2007-06-26; City Council; 19056; Digital Infrastructure and Video Competition ActCITY OF CARLSBAD - AGENDA BILL
AB#
MTG.
DEPT.
19,056
06-26-07
CM
ORDINANCE IMPLEMENTING DIGITAL
INFRASTRUCTURE AND VIDEO
COMPETITION ACT OF 2006
DEPT. HEAD
CITYATTY.
CITY MGR.
RECOMMENDED ACTION:
Introduce Ordinance No. NS-848 amending Title 5 of Carlsbad Municipal Code Business
Licenses and Regulations, by adding Chapter 5.29 to the Carlsbad Municipal Code adopting local
regulations applicable to holders of state video franchises issued by the California Public Utilities
Commission pursuant to the Digital Infrastructure and Video Competition Act of 2006 (Assembly Bill
2987).
ITEM EXPLANATION:
The Digital infrastructure and Video Competition Act ("Act") was passed by the State Legislature in 2006
and effective January 1, 2007. The Act transfers the authority for granting video (often referred to as
"cable") franchises from the local franchising authority (i.e. counties and municipalities) and places it on
the state. The Act designated The California Public Utilities Commission ("CPUC") as the state agency
that is charged with granting and administering video franchises. On or about April 1, 2007, the CPUC
began accepting applications for state-granted video franchises from "new" entrants to the video market.
In addition, the Act also required local entities to adopt local regulations applicable to holders of state
video franchises. These regulations are set forth in the proposed ordinance.
FISCAL IMPACT:
The Act maintains the ability of local entities to receive, from each franchisee providing video service in
its geographic area, a 5 percent (5%) franchise fee ("Franchise fee") and a public, education and
government ("PEG") fee of between 1 percent (1%) and 3 percent (3%) of the provider's gross revenues,
depending on the rate that was in effect on December 31, 2006. Adoption of this ordinance will ensure
the City's ability to continue collecting all available fees from video service providers operating within the
City's geographical boundaries. The City has realized approximately $1 million per year attributed to
Franchise fees.
Under the Act, cities may use PEG fees to procure production equipment and to purchase or produce
PEG programming and other video services, such as creating/providing l-nets and airing council
meetings to the community. The City has realized approximately $120,000 per year for past PEG fees.
Staff estimates an increase of $30,000 in future PEG fees due to the Act's method of calculation of PEG
fees.
Direct and in-kind benefits that were once negotiated as part of local cable franchises, such as
recording/airing of City Council meetings and providing free cable video services are no longer required
or available under the Act.
DEPARTMENT CONTACT: Denise Vedder, 760-434-2957. dvedd@ci.carlsbad.ca.us
FOR CITY CLERK'S USE ONLY.
COUNCIL ACTION: APPROVED
DENIED
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ENVIRONMENTAL IMPACT:
Pursuant to Public Resources Code section 21065 and CEQA Guidelines section 15738, this
ordinance does not constitute a "project" within the meaning of CEQA and therefore, does not
require an environmental review.
EXHIBITS:
1. Ordinance NS-848
Exhibit 1
ORDINANCE NO. NS-848
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AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
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CARLSBAD MUNICIPAL CODE ADOPTING LOCAL
REGULATIONS APPLICABLE TO HOLDERS OF STATE
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9 Video Competition Act of 2006 ("DIVCA") establishing a state video franchising scheme
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WHEREAS, under DIVCA, the City has authority to manage the rights-of-way,
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CARLSBAD, CALIFORNIA, AMENDING TITLE 5 OF THE
CARLSBAD MUNICIPAL CODE, BUSINESS LICENSES AND
REGULATIONS, BY ADDING CHAPTER 5.29 TO THE
VIDEO FRANCHISES ISSUED BY THE CALIFORNIA
PUBLIC UTILITIES COMMISSION PURSUANT TO THE
DIGITAL INFRASTRUCTURE AND VIDEO COMPETITION
ACT OF 2006 [ASSEMBLY BILL 2987]
WHEREAS, the California Legislature adopted the Digital Infrastructure and
under which holders of state-issued video franchises would be partially regulated by the
California Public Utilities Commission ("PUC") and partially regulated by local
governments; and
WHEREAS, under DIVCA, the PUC has authority to grant state franchises,
regulate build-out and non-discrimination standards for state franchise holders, enforce
anti-subsidy provisions, and impose user and application fees; and
regulate the payment of state franchise fees and PEG fees, require the provision PEG
channels, and enforce federal and state customer service and the payment of PEG fees,
and the management of pubic rights-of-ways; and
WHEREAS, amending the Municipal Code to add Chapter 5.29, is necessary in
order to preserve the City's authority to regulate state video franchise holders to the
18 CAICI II
NOW THEREFORE, the City Council of the City of Carlsbad, California, does
extent permitted under DIVCA.
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ordain as follows:
SECTION 1: That Title 5 of the Carlsbad Municipal Code is amended by adding Chapter
5.29 to read as follows:
5.29.010 Purpose
5.29.020 Rights Reserved
5.29.030 Compliance with Chapter 5.29
25 5.29.040 Definitions
5.29.050 State Video Franchise Fees
5.29.060 PEG Fees
5.29.070 Payment of Fees
5.29.080 Audit Authority
5.29.090 Late Payments
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5.29.130 Construction in the Public Rights-of-Way
5.29.140 Permits
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Exhibit 1
5.29.100 Lease of City-owned Network
5.29.110 Customer Service Standards and Penalties
5.29.120 City Response to State Video Franchise Applications
5.29.150 Right-of-Way Management
5.29.160 Emergency Alert Systems
5.29.170 Interconnection for PEG Programming
5.29.010 Purpose
This Chapter is applicable to all video service providers who are eligible for, and
have been awarded, a State video franchise under the California Public Utilities Code
section 5800 et seq. (the Digital Infrastructure and Video Competition Act of 2006), to
provide video services in any portion of the City.
5.29.020 Rights Reserved
The rights reserved to the City under this Chapter 5.29 are in addition to all other
rights of the City whether reserved by this Chapter 5.29 or authorized by other applicable
law, and no action, proceeding or exercise of a right shall affect any other rights which
may be held by the City.
5.29.030 Compliance with Chapter 5.29
Nothing contained in this Chapter 5.29.exempts a State Franchise Holder from
compliance with all ordinances, rules or regulations of the City now in effect or which may
be hereafter adopted which are not inconsistent with this Chapter or California Public
Utilities Code section 5800 et seq., or obligations under any franchise previously issued
by the City, insofar as those may be enforced under California Public Utilities Code
section 5800.
5.29.040 Definitions
For purposes of this Chapter 5.29, the following terms, phrases, words, and their
derivations shall have the meaning given in this chapter. Unless otherwise expressly
stated, words not defined in this Chapter 5.29 shall be given the meaning set forth in the
Digital Infrastructure and Video Competition Act of 2006, Division 2.5 of the California
Public Utilities Code, section 5800 et seq. ("DIVCA"). When not inconsistent with the
context, words used in the present tense include the future, words in the plural number
include the singular number, words in the singular number include the plural number, and
"including" and "include" are not limiting. The word "shall" is always mandatory.
25 (1) "Access channel" means any channel on a cable system or video system
set aside by a State Franchise Holder for public, educational, or governmental use.
(2) "Applicant" means any person submitting any application required under
Division 2.5 of the California Public Utilities Code.
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Exhibit 1
(3) "Applicable law" means all lawfully enacted and applicable Federal, State,
and City laws, ordinances, codes, rules, regulations and orders as the same may be
amended or adopted from time to time.
(4) "Cable service" means (i) the one-way transmission to subscribers of video
programming or other programming services; and (ii) subscriber interaction, if any, which
is required for the selection or use of such video programming or other programming
service.
(5) "City" means the city of Carlsbad, a municipal corporation of the state of
California, in its present incorporated form or in any later reorganized, consolidated,
enlarged or reincorporated. Any act that may be taken by the City may be taken by the
City Council or any agency, department, agent or other entity now or hereafter authorized
by the City Council to act on the City's behalf.
(6) "City Council" means the governing body of the City of Carlsbad, California.
(7) "City Director of Public Works" means the Director of Public Works of the
city of Carlsbad or his designated representative.
(8) "City Manager" means the city's chief executive officer or any designee
(9) "Construction," "operation," or "repair" and similar formulations of those
terms mean the named actions interpreted broadly, encompassing, among other things,
installation, extension, maintenance, replacement of components, relocation,
undergrounding, grading, site preparation, adjusting, testing, make-ready, excavation
and tree trimming. The term "operation" does not encompass or regulate the provision of
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services, but refers to activities affecting rights-of-way and other property subject to the
17 jurisdiction of the City.
18 (10) "DIVCA" means the Digital Infrastructure and Video Competition Act of
19 2006, Division 2.5 of the California Public Utilities Code, section 5800 et seq., as may be
amended from time to time.
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(11) "Gross revenues" means all revenues (whether in the form of cash or other
consideration) of a State Franchise Holder or its affiliates in any way derived from its
operations within the City.22
(12) "Incumbent cable operator" shall have the same meaning as in DIVCA.
(13) "Network" shall have the same meaning as in DIVCA.
(14) "PEG" or "Public, Educational, and Governmental" shall have the same
meaning as in DIVCA.
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(15) "Person" means any natural person and all domestic and foreign
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(16) "Public rights-of-way" shall have the same meaning as in DIVCA.
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Exhibit 1
kind, clubs, business or common law trusts and societies. The term does not include the
City.
(17) "State Franchise" or "State Video Franchise" means a Franchise issued by
the California Public Utilities Commission to provide cable service or video service, as
those terms are defined in DIVCA, within any portion of the City.
(18) "State Franchise Holder" or "State Video Franchise Holder" means a
person who holds a state franchise.
(19) "Subscriber" means the City or any person who legally receives any cable
service or video service from a State Franchise Holder delivered over that State
Franchise Holder's network.
(20) "User" means a person or the City utilizing a channel, capacity or
equipment and facilities for purposes of producing or transmitting material, as contrasted
with the receipt thereof in the capacity of a subscriber.
(21) "Video Service" shall have the same meaning as in DIVCA.
5.29.050 State Video Franchise Fees
For any State Video Franchise Holder operating within the boundaries of the
City, there shall be a state franchise fee paid to the City equal to five percent (5%) of the
gross revenues of that State Video Franchise Holder or any affiliate that are subject to a
franchise fee under California Public Utilities Code Section 5860.
5.29.060 PEG Fees
(a) For any State Video Franchise Holder operating within the boundaries of the
City of Carlsbad, there shall be a PEG fee paid to the City equal to one percent (1%) of
the gross revenues of that State Video Franchise Holder or any affiliate that are subject
to a franchise fee under California Public Utilities Code Section 5860.
(b) PEG fees shall be used to support PEG channel facilities consistent with applicable
federal and state law.22
5.29.070 Payment of Fees
The state franchise fee required pursuant to Section 5.29.050, and the PEG fee required
pursuant to Section 5.29.060, shall each be paid to the City quarterly, in a manner
consistent with California Public Utilities Code section 5860. The State Franchise Holder
shall deliver to the City, by check or other means specified by the City, a payment for the
state franchise fee and a separate payment for the PEG fee not later than forty-five (45)
27 days after the end of each calendar quarter. Each payment made shall be accompanied
by a report, detailing how the payment was calculated, containing such information as
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(i) revenues received from subscribers, by category, with service revenues
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5.29.080 Audit Authority8
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Exhibit 1
the City Manager or designee may require consistent with DIVCA. Unless the City
Manager or designee provides otherwise, the summary statement shall identify:
(ii) any charges to subscribers for which revenues were received, but on
which a franchise fee was not paid;
(iii) where the fee is paid on an allocated portion of revenues received, the total
revenues received; the allocation factor; and how the allocation factor was calculated.
The City may examine and perform an audit of the business records of a holder of a
state video franchise to ensure compliance with Sections 5.29.050 and 5.29.060, in a
manner consistent with California Public Utilities Code section 5860(i).
5.29.090 Late Payments
In the event a State Franchise Holder fails to make payments required by this chapter on
or before the due dates specified in this chapter, the City shall impose a late charge at
the rate per year equal to the highest prime lending rate during the period of delinquency,
plus one percent (1%).
5.29.100 Lease of City-owned Network
In the event a State Franchise Holder leases access to a network owned by the City, the
City may set a franchise fee for access to the City-owned network separate and apart
from the franchise fee charged to State Franchise Holders pursuant to Section 5.29.050,
which fee shall otherwise be payable in accordance with the procedures established by
this Chapter.
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5.29.110 Customer Service Standards and Penalties
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(a) The holder of a State Video Franchise shall comply with all applicable state and
21 federal customer service and protection standards pertaining to the provision of cable or
video service, including, to the extent consistent with California Public Utilities Code
section 5900, all existing and subsequently enacted customer service and consumer
protection standards established by state and federal law and regulation.
(b) City Manager or designee shall monitor and enforce the compliance of State Video
Franchise Holders with respect to state and federal customer service and protection
standards. City Manager or designee will provide the State Video Franchise Holder
written notice of any material breaches of applicable customer and service standards,
26 and will allow the State Video Franchise Holder 30 days from the receipt of the notice to
27 remedy the specified material breach. Material breaches not remedied within the 30-day
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(2) For a second violation of the same nature within 12 months, a fine of
the violation remains in effect, not to exceed $1500.00 for each violation.
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$3000.00 for each violation.
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(3) For a third or further violation of the same nature within 12 months, a fine of $2500.00
shall be imposed for each day the violation remains in effect, not to exceed $7,500.00 for
each violation.
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Exhibit 1
time period will be subject to the following penalties to be imposed by the City Manager
or designee:
(1) For the first occurrence of a violation, a fine of $500.00 shall be imposed for each day
$1 000.00 shall be imposed for each day the violation remains in effect, not to exceed
(c) A State Video Franchise Holder may appeal a penalty assessed by the City Manager
or designee to the City Council within 60 days. After relevant speakers are heard, and
any necessary staff reports are submitted, City Council will vote to either uphold or
vacate the penalty. City Council's decision on the imposition of a penalty shall be final.
5.29.120 City Response to State Video Franchise Applications
(a) Each State Franchise Holder or applicant for a state franchise to provide video or
cable service within the boundaries of the City of Carlsbad must concurrently provide
complete copies to the City of any notice, application or amendments to applications filed
with the PUC. One complete copy must be provided to the City Clerk, and one complete
copy to the City Manager of City of Carlsbad.
(b) City Manager will provide any appropriate comments to the PUC regarding any
5.29.130 Construction in the Public Rights-of-Way
Except as expressly provided in this Chapter 5.29, the provisions of Title 11 of this Code,
and all City administrative rules and regulations developed pursuant to Title 11, as now
existing or as hereafter amended, shall apply to all work performed by or on behalf of a20
State Franchise Holder in any public rights-of-way.
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5.29.140 Permits22
(a) Prior to commencing any work for which a permit is required by Title 11 of this Code,
a State Franchise Holder shall apply for and obtain a permit in accordance with the
provisions of Title 11. A permit application is complete when the State Franchise Holder
has complied with all applicable laws and regulations, including but not limited to all City
administrative rules and regulations, and all applicable requirements of Division 13 of the
California Public Resources Code, section 21000, et seq. (the California Environmental
Quality Act).
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(c) If the City Director of Public Works denies a State Franchise Holder's application for a
permit, the Director of Public Works shall, at the time of notifying the applicant of denial,
furnish to the applicant a detailed explanation of the reason or reasons for the denial.
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(d) A State Franchise Holder that has been denied a permit by final decision of the City
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Exhibit 1
(b) The City Director of Public Works shall either approve or deny a State Franchise
Holder's application for any permit required under Division 1 of this title within sixty
(60) days of receiving a complete permit application from the State Franchise Holder.
Director of Public Works may appeal the denial to the City Council, pursuant to the
procedure proscribed in Section 11.16.120 of this Code.
(e) The issuance of a permit is not a franchise, and does not grant any vested rights in
8 any location in the Public rights-of-way, or in any particular manner of placement within
the rights-of-way. Without limitation, a permit to place cabinets and similar
appurtenances aboveground may be revoked and the permittee required to place
facilities underground, upon reasonable notice to the permittee.
5.29.150 Right-of-Way Management
(a) A State Franchise Holder shall utilize existing poles, conduits and other facilities
whenever possible, and shall not construct or install any new, different or additional
poles, conduits or other facilities whether on public property or on privately owned
property unless and until first securing the written approval of the City Manager.
Whenever the State Franchise Holder shall not utilize existing poles, conduits and other
facilities, or whenever existing conduits and other facilities shall be located beneath the
surface of the streets, or whenever the City shall undertake a program designed to cause
all conduits and other facilities to be located beneath the surface of the streets in any
area or throughout the City, in the exercise of its police power or pursuant to the terms
17 hereof, upon reasonable notice to grantee, any such conduits or other facilities of the
State Franchise Holder shall be constructed, installed, placed or replaced beneath the
surface of the streets. Any construction, installation, placement, replacement or changes
which may be so required shall be made at the expense of State Franchise Holder
whose costs shall be determined as in the case of public utilities.
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(b) In those areas of the City where the transmission or distribution facilities of the
21 respective public utilities providing telephone, communication and electric services are
underground or hereafter are placed underground, each State Franchise Holder shall
22 likewise shall construct, operate and maintain all of its network facilities underground.
The term "underground" includes a partial underground system; provided, that upon
obtaining the written approval of the City Manager, passive devices, power supplies and
other equipment in the grantee's network may be placed in appropriate housings upon
the surface of the ground, subject to applicable provisions of the City code, regulations,
and practices. .
(c) A State Franchise Holder, at it's expense, shall protect, support, temporarily
disconnect, relocate or remove any network property of the State Franchise Holder
when, in the opinion of the City Manager, the same is required by reason of traffic
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conditions, public safety, street vacation, freeway or street construction, change or
establishment of street grade, installation of sewers, drains, waterpipes, power line,
signal line, transportation facilities, tracks or any other type of structure or improvements
by governmental agencies whether acting in a governmental or proprietary capacity, or
buildings, urban renewal development and any general program under which the City
shall undertake to cause all such properties to be located beneath the surface of the
ground. The State Franchise Holder shall in all cases have the privilege, subject to the
corresponding obligations, to abandon any network property in place, as herein provided.
Nothing hereunder shall be deemed a taking of the property of the State Franchise
Holder, and the grantee shall be entitled to no surcharge by reason of anything
hereunder.
(d) Upon the failure, refusal or neglect of the State Franchise Holder to cause any work
or other act required by law or hereunder to be properly complete in, on, over or under
any street within any time prescribed therefor, or upon notice given, where no time is
prescribed, the City Manager may cause such work or other act to be completed in whole
or in part, and upon so doing, shall submit to grantee an itemized statement of the costs
thereof. The grantee shall, within thirty days after receipt of such statement, pay to the
City the entire amount thereof.
notice to and approval by the City; or any part of such network has been installed in any
street or other area without complying with the requirements hereof; then the State
Franchise Holder shall, at the option of the City, and at the expense of the State
Franchise Holder and at no expense to the City, and upon demand of the City, promptly
remove from any streets or other area any such network property, and the State
Franchise Holder shall promptly restore the street or other area from which such property
has been removed to such condition as the City Manager may prescribe. The City
Council may, upon written application therefor by the State Franchise Holder, approve
the abandonment of any of such property in place by the State Franchise Holder and
under such terms and conditions as the City Council may prescribe. Upon abandonment
of any such network property in place, the State Franchise Holder shall cause to be
executed, acknowledged and delivered to the City such instruments as the City attorney
shall prescribe and approve, transferring and conveying the ownership of such property
to the City.
5.29.160 Emergency Alert Systems
Each State Franchise Holder shall comply with the emergency alert system requirements
of the Federal Communications Commission in order that emergency messages may be
distributed over the State Franchise Holder's network.
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5.29.170 Interconnection for PEG Programming
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27 Each State Franchise Holder, and each incumbent cable operator, shall negotiate in
good faith to interconnect their networks for the purpose of providing PEG programming.
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not withhold the interconnection. If a State Franchise Holder and an incumbent cable
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Interconnection may be accomplished by any means authorized under Public Utilities
Code Section 5870(h). Each State Franchise Holder and incumbent cable operator shall
provide interconnection of PEG channels on reasonable terms and conditions and may
require the incumbent cable operator to allow the State Franchise Holder to interconnect
its network with the incumbent cable operator's network at a technically feasible point on
the State Franchise Holder's network as identified by the State Franchise Holder. If no
technically feasible point for interconnection is available, each State Franchise Holder will
make an interconnection available to each channel originator providing PEG
programming to an incumbent cable operator, and will provide the facilities necessary for
the interconnection. The cost of any interconnection will be borne by the State Franchise
Holder requesting the interconnection unless otherwise agreed to by the State Franchise
Holder and the incumbent cable operator.
EFFECTIVE DATE: This ordinance shall be effective thirty days after its adoption
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and the City Clerk shall certify the adoption of this ordinance and cause it to be published
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at least once in a newspaper of general circulation in the City of Carlsbad within fifteen12
days after its adoption.1 o
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INTRODUCED AND FIRST READ at a regular meeting of the Carlsbad City Council on
the 26th day of June, 2007, and thereafter.
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the
City of Carlsbad on the day of , 2007, by the following vote to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
APPROVED AS TO FORM AND LEGALITY
RONALD R. BALL, City Attorney
CLAUDE A LEWIS, Mayor
ATTEST:
LORRAINE M. WOOD, City Clerk
(SEAL)
Introduction of Introduction of Ordinance Ordinance Addition of Chapter 5.29 to the Addition of Chapter 5.29 to the Carlsbad Municipal CodeCarlsbad Municipal Code
BackgroundBackgroundCity Municipal Chapter 5.28 provides for local City Municipal Chapter 5.28 provides for local franchise provisions franchise provisions ––will remain in effectwill remain in effectJanuary 1, 2007: AB 2987 January 1, 2007: AB 2987 ––the Digital the Digital Infrastructure and Video Competition Act is Infrastructure and Video Competition Act is effective effective --establishing a state video franchising establishing a state video franchising structure structure Law transferred franchising authority from Law transferred franchising authority from cities and gave to state PUCcities and gave to state PUC
Purpose of OrdinancePurpose of OrdinanceDIVCA requires cities to adopt local DIVCA requires cities to adopt local regulationsregulationsChapter 5.29 establishes the CityChapter 5.29 establishes the City’’s rights s rights under DIVCA, including collection of fees under DIVCA, including collection of fees and enforcement of state customer and enforcement of state customer service standards on holders of state service standards on holders of state video franchises.video franchises.
DIVCA Ensures:DIVCA Ensures:City will receive 5% franchise fee City will receive 5% franchise fee City will receive 1% fee for government, City will receive 1% fee for government, education & community program education & community program production & supportproduction & support
DIVCA Provides:DIVCA Provides:Statewide customer service standards & Statewide customer service standards & penaltiespenaltiesCity maintains control of construction in public City maintains control of construction in public right of way and an appeal processright of way and an appeal processVideo Service Provider Video Service Provider ““VSPVSP””must comply must comply with emergency alert system requirementswith emergency alert system requirements
QuestionsQuestions