AgdaPkt 2012-09-10 - Laserfiche WebLink

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6.5.C. - Page 1 RE PO RT To the Honorable Mayor and City Council From the Cit Mana er September 10, 2012 SUBJECT New Ordinance Regulating Video Franchises Pursuant to DIVCA RECOMMENDATION Waive First Reading and Introduce An Ordinance Enacting New Article IV to Chapter 11 Relating to Video Service Franchises. BACKGROUND This report concerns a proposed ordinance to add Article IV to Chapter 11 (Privately Owned Utilities) to the Redwood City Municipal Code, for the purpose of implementing the provisions of the Digital Infrastructure and Video Competition Act of 2006 (DIVCA), codified in California Public Utilities Code Section 5800, and following. The ordinance, if enacted, would authorize the City to fully exercise the regulatory authority that it retains under DIVCA, including to continue to collect franchise fees and public, educational and governmental (PEG) access fees. The Finance Subcommittee of the City Council has reviewed this proposed ordinance and recommended that the City Council consider it for introduction and adoption. ANALYSIS Before DIVCA went into effect on January 1, 2007, local governments had the authority to issue franchises to companies to install their cable systems in public rights of way and provide cable service to City residents. The City exercised this authority pursuant to Article III of Chapter 11 of the Municipal Code, and had issued cable franchises to both Comcast and Astound (formerly RCN). The Municipal Code provisions and the franchise agreements together set the terms and conditions applicable to the cable operators, including paying franchise fees and (PEG) fees, and satisfying other requirements relating to construction, consumer protection, security and insurance, and transfers of ownership. DIVCA created a new regulatory scheme for state video franchising, essentially shifting franchising authority away from local government to the California Public Utilities Commission (CPUC). Under DIVCA, the CPUC does not consider local cable-related needs and interests when it issues a state franchise. Rather, the CPUC will issue a 10 year state franchise to any provider that completes a simple application form and meets minimum insurance and bonding requirements.