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Home My WebLink About2018-09-25; City Council; ; Authorize the City Manager to request Charter Communications, California, Inc., to continue to collect and remit Public, Education and Government fees on behalf of the CiCA Review (P<- 9 CITY COUNCIL Staff Report Meeting Date To: From: Staff Contact: Subject Sept. 25, 2018 Mayor and City Council Scott Chadwick, City Manager Tonya Rodzach, Community Relations Manager tonya.rodzach@carlsbadca.gov or 760-434-2845 Authorize the City Manager to request Charter Communications, California, Inc., to continue to collect and remit Public, Education and Government fees on behalf of the City of Carlsbad Recommended Action Adopt a Resolution authorizing the City Manager to request Charter Communications, California, Inc., locally known as Spectrum, to continue to collect and remit Public, Education and Government 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 Charter Communications 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 a formal request in the form of a City Council resolution. Discussion In 2006, the California Legislature adopted the Digital Infrastructure and Video Competition Act, 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 Communications, 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 Charter Communications, which took effect October 27, 2017. Under the Digital Infrastructure and Video Competition Act, municipalities must make a formal request to continue to receive PEG fees when a state franchise is renewed. September 25, 2018 Item #4 Page 1 of 13 Fiscal Analysis In fiscal year 2017-18, the City of Carlsbad received $160,639 in PEG fees from Charter Communications. Next Steps Upon approval of this resolution, city staff will notify Charter Communications of the approval and continue receiving PEG funding. Environmental Evaluation (CEQA) The proposed action is exempt from the California Environmental Quality Act. Exhibits 1. City Council Resolution 2. Charter Communications' renewed state video franchise certificate. 3. Letter from Charter Communications requesting reauthorization of PEG fees. September 25, 2018 Item #4 Page 2 of 13 RESOLUTION NO. 2018-171 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, AUTHORIZING THE CITY MANAGER TO REQUEST CHARTER COMMUNICATIONS, CALIFORNIA, INC., TO CONTINUE TO COLLECT AND REMIT PUBLIC, EDUCATION AND GOVERNMENT FEES ON BEHALF OF THE CITY OF CARLSBAD FOR AN ADDITIONAL 10 YEARS. WHEREAS, the California Public Utilities Commission has approved and issued a renewed 10 year state authorized video franchise certificate for Charter Communications, California, Inc., locally known as Spectrum, to provide video service in the City of Carlsbad beginning October 27, 2017; and WHEREAS,; the City of Carlsbad is currently collecting a Public, Education and Government fee from Charter Spectrum Communications, Inc. per California's Digital Infrastructure and Video Competition Act; and WHEREAS,; Charter Communications, Inc. 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 Public, Education and Government 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. The City Council authorizes the City Manager to request Charter Communications, California, Inc., to continue to collect and remit Public, Education and Government fees on behalf of the City of Carlsbad for an additional 10 years. September 25, 2018 Item #4 Page 3 of 13 PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 25th day of September, 2018, by the following vote, to wit: AYES: NOES: ABSENT: M. Hall, K. Blackburn, M. Schumacher, C. Schumacher, M. Packard. None. None. (SEAL) September 25, 2018 Item #4 Page 4 of 13 STATE OF CALIFORNIA PUBLIC UTILITIES COMMISSION 505 Van Ness Avenue San Francisco., CA 94102 www.cpuc.ca.gov CALIFORNIA VIDEO FRANCHISE CERTIFICATE FRANCHISE NUMBER: 0020 Affected Local Entities for Franchise No. 0020, issued to Time Warner Cable Pacific West LLC dba Charter Communications on October 27, 2017: Agoura Hills Anaheim Arcadia Artesia Baldwin Park Banning Barstow Beaumont Bell Bell Gardens Bellflower Beverly Hills Bradbury Brawley Brea Buena Park Calabasas Calexico Calimesa Camarillo Canyon Lake Carlsbad Carson Cathedral City Chino Chino Hills Claremont Coachella Colton September 25, 2018 Item #4 Page 7 of 13 STATE OF CALIFORNIA PUBLIC UTILITIES COMMISSION 505 Van Ness Avenue San Francisco, CA 94102 www.cpuc.ca.gov CALIFORNIA VIDEO FRANCHISE CERTIFICATE FRANCHISE NUMBER: 0020 Affected Local Entities for Franchise No. 0020, issued to Time Warner Cable Pacific West LLC dba Charter Communications on October 27, 2017, continued: Compton Corona Coronado Costa Mesa Covina Cudahy Culver City Cypress Del Mar Desert Hot Springs Diamond Bar Downey Eastvale El Centro El Monte El Segundo Encinitas Fillmore Fontana Fountain VaHey Fullerton Garden Grove Gardena Glendora Grand Terrace Hawaiian Gardens Hawthorne Hemet Hermosa Beach September 25, 2018 Item #4 Page 8 of 13 STATE OF CALIFORNIA PUBLIC UTILITIES COMMISSION 505 Van Ness Avenue San Francisco, CA 94102 www.cpuc.ca.gov CALIFORNIA VIDEO FRANCHISE CERTIFICATE FRANCHISE NUMBER: 0020 Affected Local Entities for Franchise No. 0020, issued to Time Warner Cable Pacific West LLC dba Charter Communications on October 27, 2017, continued: Highland Holtville Huntington Beach Imperial Imperial County Indian Wells Indio Inglewood La Habra La Habra Heights La Mirada La Palma La Puente La Quinta La Verne Lake Elsinore Lakewood Lancaster Lawndale Loma Linda Lomita Los Angeles Los Angeles County Lynwood Manhattan Beach Maywood Menifee Monrovia Montclair September 25, 2018 Item #4 Page 9 of 13 STATE OF CALIFORNIA PUBLIC UTILITIES COMMISSION 505 Van Ness Avenue San Francisco, CA 94102 www .cpuc.ca.gov CALIFORNIA VIDEO FRANCHISE CERTIFICATE FRANCHISE NUMBER: 0020 Affected Local Entities for Franchise No. 0020, issued to Time Warner Cable Pacific West LLC dba Charter Communications on October 27, 2017, continued: Moorpark Moreno Valley Murrieta Newport Beach Ojai Ontario Orange Orange County Oxnard Palm Desert Palm Springs Palmdale Paramount Perris Pico Rivera Placentia Pomona Port Hueneme Poway Rancho Cucamonga Rancho Mirage Redlands Redondo Beach Rialto Riverside County San Bernardino San Bernardino County San Buenaventura (a/k/a Ventura) San Diego County September 25, 2018 Item #4 Page 10 of 13 STATE OF CALIFORNIA PUBLIC UTILITIES COMMISSION 505 Van Ness Avenue San Francisco, CA 94102 www .cpuc.ca.gov CALIFORNIA VIDEO FRANCIDSE CERTIFICATE FRANCHISE NUMBER: 0020 Affected Local Enti.ties for Franchise No. 0020, issued to Time Warner Cable Pacific West LLC dba Charter Communications on October 27, 2017, continued: San Dimas San Fernando San Jacinto San Marcos San Marino Santa Ana Santa Clarita Santa Fe Springs Santa Monica Santa Paula Seal Beach Sierra Madre Simi Valley Solano Beach South El Monte South Gate South Pasadena Stanton Temecula Thousand Oaks Torrance Tustin Twentynine Palms Upland Ventura County Villa Park Vista West Hollywood Westlake Village September 25, 2018 Item #4 Page 11 of 13 STATE OF CALIFORNIA PUBLIC UTILITIES COMMISSION 505 Van Ness Avenue San Francisco, CA 94102 www.cpuc.ca.gov CALIFORNIA VIDEO FRANCHISE CERTIFICATE FRANCHISE NUMBER: 0020 Affected Local Entities for Franchise No. 0020, issued to Time Warner Cable Pacific West LLC dba Charter Communications on October 27, 2017, continued: Westminster Westmorland Wildomar Yorba Linda Yucaipa Yucca Valley September 25, 2018 Item #4 Page 12 of 13 Charter COMMUNICATIONS September 10, 2018 Scott Chadwick City Manager City of Carlsbad 1200 Carlsbad Village Drive Carlsbad, CA 92008 EXHIBIT 3 Buz Schott Senior Director, State Government Affairs 0: 858.309.8387 M: 619.385.6854 Laurence.Schott@Chmier.com Subject: Charter Communications State Franchise Certificate and PEG Fee Dear Mr. Chadwick, Charter Communications appreciates your attention to renewal of the Public Education Government (PEG) fees. As we have discussed, the California Digital Infrastructure and Competition Act of 2006 (DIVCA) requires municipalities to renew the PEG fees every ten years. It is Charter Communications legal opinion that we do not have the legal authority to continue collecting and remitting PEG fees on behalf of the City of Carlsbad without the City Council taking formal action to renew the fee. DIVCA states that a state-issued franchise shall only be valid for 10 years after the date of issuance. Therefore, Charter Communications is requesting authorization from the City of Carlsbad in the form of a City Council approved ordinance and or resolution to continue collecting and remitting PEG fees to the City. We have provided a sample ordinance for your consideration. It is requested the City take action as soon as possible to ensure the continuation of PEG fee payments. · Thank you. Buz Schott Enclosure 1 888 .GET.CHARTER 110450 Pacific Center Court www.charter.com San Diego, CA 92121 September 25, 2018 Item #4 Page 13 of 13