HomeMy WebLinkAbout2017-05-09; City Council; ; Adoption of Resolution authorizing the City Manager to request Cox Communications, California, LLC, continue to collect and remit Public, Education and Government (PEG) fCA Review PJ,(.,,
9 CITY COUNCIL
Staff Report .
Meeting Date
To:
From:
Staff Contact:
Subject
Recommended Action
May 9, 2017
Mayor and City Council V
Kevin Crawford, City Manage~ll
Jessica Padilla Bowen, Community Relations Manager
jessica.padillabowen@carlsbadca.gov or 760-434-2845
Adoption of Resolution authorizing the City Manager to request Cox
Communications, California, LLC, continue to collect and remit Public,
Education and Government (PEG) fees an behalf of the City of Carlsbad
Adopt a Resolution authorizing the City Manager to request Cox Communications, California, LLC,
continue to collect and remit Public, Education and Government (PEG) fees on behalf of the City of
Carlsbad for an additional 10 years.
Executive Summary
The California Public Utilities Commission recently renewed its franchise agreement with Cox
Communication so the company can continue to provide video service in the City of Carlsbad. To
continue to collect fees from the cable company to support local programming, the city must make
formal request in the form of a City Council resolution.
Discussion
In 2006, the California Legislature adopted the Digital Infrastructure and Video Competition Act (DIVCA),
which established a state video franchising process. Previously, local municipalities were in charge of
cable franchise agreements. Under the new process, the California Public Utilities Commission has the
exclusive authority to issue state video franchises.
Currently, three video service providers operate in the City of Carlsbad: Charter Spectrum (formerly
Time Warner), AT&T U-Verse and Cox Communications.
As part of the franchise agreements with the state, video service providers are required to pay the city 1
percent of their gross revenues from basic cable subscriptions. These fees are referred to as "PEG" fees,
which stands for public, educational and government programming. The City of Carlsbad uses the PEG
fees to provide government programming on a dedicated cable channel.
The California Public Utilities Commission has approved and issued a renewed 10 year state video
franchise for Cox Communications, which took effect April 27, 2017. Under DIVCA, municipalities must
make a formal request to continue to receive PEG fees when a state franchise is renewed.
Fiscal Analysis
In fiscal year 2015-16, the City of Carlsbad received $1,009 in PEG fees from Cox.
Next Steps
Item #6 May 9, 2017 Page 1 of 8
Upon approval of this resolution, city staff will notify Cox of the approval and continue receiving PEG
funding.
Environmental Evaluation (CEQA)
The proposed action is exempt from the California Environmental Quality Act (CEQA).
Exhibits
1. Resolution authorizing the City Manager to request Cox Communications, California, LLC, continue
to collect and remit Public, Education and Government (PEG) fees on behalf of the City of Carlsbad
for an additional 10 years.
2. Cox renewed state video franchise certificate.
3. Letter from Cox requesting reauthorization of PEG fees.
Item #6 May 9, 2017 Page 2 of 8
RESOLUTION NO. 2017-076
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA,
AUTHORIZING THE CITY MANAGER TO REQUEST COX COMMUNICATIONS,
CALIFORNIA, LLC, CONTINUE TO COLLECT AND REMIT PUBLIC, EDUCATION AND
GOVERNMENT (PEG) FEES ON BEHALF OF THE CITY OF CARLSBAD FOR AN
ADDITIONAL 10 YEARS.
EXHIBIT 1
WHEREAS, the City Council of the City of Carlsbad, California, has determined that the California
Public Utilities Commission has approved and issued a renewed 10-year state authorized video
franchise certificate for Cox Communications, California, LLC, to provide video service in the City of
Carlsbad beginning April27, 2017; and
WHEREAS, the City of Carlsbad is currently collecting a Public, Education and Government (PEG)
fee from Cox per California's Digital Infrastructure and Video Competition Act; and
WHEREAS, Cox has requested authorization from the City of Carlsbad in the form of a new or
reauthorized ordinance and/or resolution to continue collecting and remitting PEG fees under the new
franchise term.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as
follows:
1. That the above recitations are true and correct.
2. That the City Council authorizes the City Manager to request Cox Communications,
California, LLC, to continue to collect and remit Public, Education and Government (PEG)
fees on behalf of the City of Carlsbad for an additional 10 years.
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of
Carlsbad on the 9th day of May, 2017, by the following vote, to wit:
AYES: M. Hall, K. Blackburn, M. Schumacher, C. Schumacher, M. Packard.
NOES: None.
ABSENT: None.
Item #6 May 9, 2017 Page 3 of 8
---------------------·-···----·-·····
STATE OF CALIFORNIA
PUBLIC UTILITIES COMMISSION
'-05 VAN NfSS AVE NU[
SAN FRANCISCO. CA 9410?, 3298
Decemher 30. 2016
Esther Northrup
Senior Director. State Regulatory A ftairs
Cox ('ommunications
5887 Copley Drive. Suite 300
San Diego. CA 92111
Dear Ms. Northrup:
·······-·····----··-------------,
EXHIBIT 2
Edmund G. Brown Governor
The Commission has determined that the application for the n.:newal of a state video franchise
suhmittcd hy Cox Communications on Dcccmhcr 6. 2016 is complete. and accordingly issues the
enclosed state franchise certificate.
Should you have any questions. please contact Glenn Scmow at 415. 703.4153.
Sincerely .
... -....... ---1'imothy J. Sullivan
Executive Director
Item #6 May 9, 2017 Page 4 of 8
STATE OF CALIFORNIA
PUBLIC UTILITIES COMMISSION
505 Van Ness Avenue
www.cpuc.ca.gov
San Francisco, CA 94102
CALIFORNIA VIDEO FRANCHISE CERTIFICATE1
FRANCHISE NUMBER: 0003
I) Franchise Holder:
Name: Cox Communications Califixnia. LLC dha Cox Communications
Address: 5887 Coplcv Drive, Suite 300
San Diego, California 92111
2) Application Date: December 6. 2016
3} Franchise Effective Date: April 27. 2017
4) Franchise Expiration Date: ,ipril 27,_2027
5) Affected Local Entitics2 Attached
Issued at San Francisco this 30111 Day of Decenw..£r. 20lfi.
~~e:::,L_--=-.::l_~_J J 5
,..,,.... Timothy J. Sullivan
Executive Director
1 This Certificate constitutes a grant of authority to provide video service in the service
EXHIBIT 2
area footprint requested in the Application referenced herein. including but not limited to
authority to use the public rights-of-way in exchange for the franchise foe adopted in CAL. Pt rB.
Urn .. Com: *. 5840( q), subject to the laws of this state. This grant of authority is subject to
lawful operation of the cable service or video service by the applicant or its successor in interest.
2 The state video franchise granted herein may include all or part of the affected local entities'
territory. For more information on the video service area covered by this franchise, contact the
California Public Utilities Commission.
Item #6 May 9, 2017 Page 5 of 8
STATE OF CALIFORNIA
PUBLIC UTILITIES COMMISSION
505 Van Ness A venue San Francisco, CA 94 l 02
www.cpuc.ca.gov
CALIFORNIA VIDEO FRANCHISE CERTIFICATE
FRANCHISE NUMBER: 0003
Affected Local Entities for Franchise No. 0003, issued to Cox Communications
California, LLC, dba Cox Communications on December 30, 2016:
Aliso Viejo, City of
Carlsbad. City of
Chula Vista, City of
Coronado. City of
Dana Point. City of
El Cajon, City of
Encinitas. City of
l~scondido, City of
Goleta. City of
Imperial Beach. City or
Irvine. City of
La Mesa. City of
Laguna Beach. City of
Laguna Hills. City of
Laguna Niguel. City of
Laguna Woods. City of
Lake Forest City of
I .cmon Grove. City of
Los Angeles/San Pedro. City of
Los Angeles, County of
Mission Viejo, City of
National City. City of
Newport Beach. City of
Oceanside. City of
Orange. City of
Orange, County of
Palos Verdes Estates. City of
EXHIBIT 2
Item #6 May 9, 2017 Page 6 of 8
,-.-------------------------------------------------------------
STATE OF CALIFORNIA
PUBLIC UTILITIES COMMISSION
505 Van Nc~s Avenue San Francisco, CA 94102
www.cpucxa.gov
CALIFORNIA VIDEO FRANCHISE CERTIFICATE
FRANCHISE NUMBER: 0003
Affected Local Entities for Franchise No. 0003, issued to Cox Communications
California, LLC, dha Cox Communications on December 30, 2016, continued:
Pmvay, City of
Rancho Palos Verdes. City of
Rancho Santa Margarita. City of
Rolling Hills. City of
Rolling Hills Estates. City of
San Clemente. City of
San Diego. City of
San Diego. County or
San Juan Capistrano. City of
San Marcos. City of
Santa Barbara. City or
Santa Barbara. County of
Santee. City of
Solana Beach. City of
Tustin. City of
Vista. City or
EXHIBIT 2
Item #6 May 9, 2017 Page 7 of 8
cox.
Via Email and USPS
April 3, 2017
Kevin Crawford
City Manager
City of Carlsbad
1200 Carlsbad Village Drive
Carlsbad, CA 92008
EXHIBIT 3
5887 Copley Drive
Son Diego, CA 92111, 7906
Subject: Cox Communications State Franchise Certificate and P.E.G. Fee
Dear Mr. Crawford:
As a follow up to Cox's letter dated February 28, 2017 regarding the reauthorization of P.E.G. Fees, I am
writing to provide you additional information regarding our request.
Cox's CA legal counsel has determined that we do not have the legal authority to continue collecting and
remitting a P.E.G. Fee on behalf of the City of Carlsbad beyond the expiration of our original state
franchise certificate of April 27, 2017. Cox's determination takes into consideration language from the
Digital Infrastructure and Video Competition Act of 2006 (DJVCA) which states, "A state-issued franchise
shall only be valid for 10 years after the date of issuance, and the video service provider shall illm!Y for a
renewal of the state franchise for an additional 10-year period if it wishes to continue to provide video
services in the area covered by the franchise after the expiration of the franchise." (Pub. Util. Code §
58SO(a)). Therefore, it is Cox's legal interpretation that our current state franchise certificate expires
and therefore any previous ordinances and/or resolutions enabling P.E.G. Fees will expire with the
expiration of Cox's origination certificate on April 27, 2017. Cox has been advised by our legal counsel to
obtain authorization from the City in the form of a new or reauthorized ordinance and/or resolution to
continue collecting and remitting P.E.G. fees under the new franchise term to avoid the potential of
class action lawsuits on behalf of rate payers.
Cox is cognizant of the process and timing for such authorization. As we work to avoid any disruption in
the collection and remittance of the fee to the City, we ask that you let us know when the City will be
agendizing this authorization.
We appreciate our partnership with the City in serving the residents and businesses of Carlsbad.
!£y(fi
Oscar Urteaga
Manager, Government Affairs
Cox Communications
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Item #6 May 9, 2017 Page 8 of 8