AgdaPkt 2012-09-10 - Laserfiche WebLink

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6.5.C. - Page 2 Under DIVCA, new entrants into a market that are not operating under a franchise issued by a local government are permitted to obtain a state franchise at any time. Incumbent cable operators, such as Comcast and Astound, were required to continue to operate under their local franchises until either their local franchise expired or a new provider, such as AT&T or Verizon, begins offering services under a state franchise, at which point an incumbent may elect to terminate its local franchise and obtain a state franchise. In this jurisdiction, Comcast has elected to continue to operate under its local franchise until it expires in 2021. AT&T obtained a state franchise from the CPUC to serve the City effective March 30, 2007, and thereafter began offering video services in the City under this state franchise. Astound also began operating under a state franchise on November 9, 2009, after its local franchise expired. Until its local franchise expires or it chooses to seek a state franchise covering the City, Comcast will continue to operate under Article III of Chapter 11 of the Municipal Code and its local franchise, while AT&T and Astound are governed by DIVCA and their state franchises issued by the CPUC. The proposed ordinance would set forth the requirements for the companies operating under a state- issued franchise. While DIVCA shifts much of the regulatory authority over video providers to the CPUC, it does preserve some local government regulatory authority. For example, DIVCA allows local authorities: (i) to continue to collect franchise fees subject to a 5% cap; (ii) to continue to collect PEG fees subject to certain limitations; (iii) to enforce customer service standards imposed under state and federal law; and (iv) to continue to impose right-of-way management and permitting requirements, subject to certain restrictions imposed by DIVCA. The purpose of the proposed ordinance presented to the Council is to allow the City to implement and enforce its local authority preserved under DIVCA, as follows: 1) DI VCA allows local governments to assess a franchise fee on holders of state franchises in an amount not to exceed what is being charged to incumbent providers and in any case not to exceed 5% of gross revenues. The proposed ordinance is designed to implement the regulatory authority that has been preserved to the City under DIVCA. The ordinance imposes a 5% franchise fee, the same as was imposed on incumbent cable companies under local franchises, and the maximum permitted under DIVCA. So whether operating under a local franchise issued by the City or a state franchise issued by the CPUC, the operators will pay the same franchise fee. The ordinance also imposes the maximum late charge allowed under DIVCA. 2) DIVCA allows local governments to establish a fee by ordinance to support public, educational and government (PEG) channel facilities, subject to certain limitations. The PEG fee may be between 1% and 3% of gross revenues, depending on the fee a local government was charging an incumbent cable provider as of December 31, 2006. If a PEG fee under a franchise agreement was /ess than 1%, the City can