HomeMy WebLinkAbout2000-05-22 Ordinance 4636ORDINANCE NO. 4636
ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO
AMENDING CHAPTER 2.10 [CABLE TELEVISION SYSTEMS _.
AWARD OF FRANCHISES BY CITY COUNCIL] TO REGULATE
CABLE TELEVISION SYSTEMS AND OPEN VIDEO SYSTEMS
WITH RESPECT TO 1) OCCUPANCY AND USE OF PUBLIC
RIGHTS-OF-WAY, 2) ESTABLISHMENT OF FRANCHISE AND
LICENSE REQUIREMENTS, 3) CUSTOMER SERVICE
STANDARDS, AND 4) MINIMUM REQUIREMENTS FOR
CONSTRUCTION, OPERATION, MAINTENANCE AND REPAIR
A. Under applicable laws, the City of Palo Alto. is
authorized to regulate the use of and grant access to public
rights-of-way, including, but not limited to, public streets,
roads, alleys, highways and public utility easements, subject to
prescribed terms and conditions, for the public good and in a
manner consistent with the public interest:
B. The public rights-of-way within the City of Palo Alto
dedicated to and for compatible public uses and purposes: (1) are
critical to the travel of people and the transportation of goods
and other tangibles in the business and social life of the
community by all citizens: (2) are unique and physically limited
resources, so that proper management by the City of Palo Alto is
necessary to maximize the efficient use of public rights-of-way,
to minimize the disruption and inconvenience to the public of use
of the public rights-of-way for purposes other than their primary
purpose of transport, to minimize the costs to the taxpayers of
the foregoing uses and purposes, and to prevent harm to the
community; and (3) must be managed and controlled consistent with
that intent;
. C. The City of Palo Alto anticipates that an ever-
increasing number of companies will request access to and use of
public rights-of-way for the provision of cable television and
open video system services to the public;
D. The City of Palo Alto wishes to promote the
availability of many information resources and high-quality,
cable and other video services to the community it represents,
incl uding the development of advanced systems that can support
public, educational, and governmental programming and high-speed
access to the Internet;
E. The City of Palo Alto wishes to procure for its
residents the opportunity to obtain access to cable television
system and open video system facil ies to disseminate and receive
information, to promote competitive cable rates and services, to
take advantage of opportunities presented by such facilities to
provide for more open government, to enhance educational
000530 syn 0071808 1
opportuni ties, and to allow for the flexibility to respond to
changes in technology, subscriber interests, and competitive
factors that will affect the health, safety and welfare of the
community the City serves;
F. The City of Palo Alto finds that it is in the public
interest to franchise and to establish standards for franchising
cable television system and open video system operators a
manner that will promote these objectives and otherwise protect
the public interest; and
G. Under applicable federal and California laws, the
City is authorized under its police power to adopt customer
service standards for cable communications systems operating in
Palo Alto to protect. s residents from unfair, improper or
abusive practices and to ensure that residents are treated fairly
by franchisees;
The Council of the City of Palo Alto does ORDAIN as
follows:
SECTION 1. The index to Chapter 2.10 of Tit 2
Administrative Code -of the Palo Alto Municipal Code is hereby
amended to read, as follows:
Chapter 2.10
CABLE TELEVISION AND OPEN VIDEO SYSTEMS -AWARD OF FRANCHISES BY
THE CITY· COUNCIL
Sections:
000530 syn 0071808
2.10.010
2.10.020
2.10.030
2.10.040
2.10.050
2.10.060
2.10.070
2.10.080
2.10.090
2.10.100
2.10.110
2.10.120
2.10.130
2.10.140
2.10.200
2.10.210
2.10.220
2.10.230
Definitions
Nature of franchise
Administration and regulations·
Transfers
Construction, operation, maintenance and
repair
Indemni ty, insurance, bonds and security
fund
Enforcement and remedies
Books and records
Reports
Maps and improvement plans
Other records
Exemptions
Privacy
Procedures for payment
Cable system franchise application
Initi and renewal franchise applications
Renewal franchise under 47 U.S.C. § 546
Cable system transfer application
2
2.10.240
2.10.250
2.10.260
2.10.270
2.10.275
2.10.280
2.10.300
2~10,310
2.10.320
2.10.330
2.10.340
2.10.350
2.10.360
2.10.400
2.10.500
Legal qualifications
Franchise fee
No exclusivity
Minimum franchise conditions
Penal ties for customer service standards
violations
Rate regulation
Initial and renewal OVS applications
OVS trans r application
Minimum requirements
Special termination rules
Rate regulation
Fee in lieu of franchise
Exclusive contracts
Miscellaneous provisions
Customer service standards
SECTION 2. Section 2.10 ;010 of Chapter 2.10 of Title 2
of the Palo Alto Municipal Code is hereby amended and replaced in
its entirety to read, as follows:
"2.10.010 Definitions.
(a) For the purposes of this Chapter, the following
words, terms, phrases, and abbreviations and the similar
formulations shall have the meanings given them in this
Chapter or, as appropriate, in Chap~ers 1.04, 2.08, 2.30 and
12.04 of the Palo Alto Municipal Code and in the Charter of
the City of Palo Al to ("Charter"), as may be amended from
time to time, unless the context indicates otherwise. Words
not defined in this Chapter or other Chapters of the Palo
Alto Municipal Code shall have the same meaning as
established in Title VI of Title 47 of the United States
Code, and, if not defined therein, their common and ordinary
meaning. References to governmental entities (whether
persons or entities) shall refer to those entities or their
successors in authority. If a speci c provision of law
referred to in this Chapter should be renumbered, then the
ref~rence shall be read to re to the renumbered
provision. References to any law shall be interpreted
broadly to cover government actions, however nominated,
including any law now in force or subsequently enacted or
amended.
(1) . "Access," "PEG access," or "PEG use" means
the availability of a cable system or open video system for
public, educational or governmental use (including
institutional network use) by various agencies,
institutions, organizations, groups, and individuals,
including the City and its designated access providers, to
acquire, create and distribute programming not under a
3
000530 syn 0071808
franchisee's editorial control, including, but not limited
to:
(A) "Public access" or "Public use" means
access where organizations, groups or individual members of
the general public, on a non-discriminatory basis, are the
primary or designated programmers or users having editorial
control over their programming;
(B) "Educational access" or "Educational use"
means access where accredited educational institutions are
the primary or designated programmers or users having
editorial control over their programming; and
(C) "Governmental access" or "Governmental
use" means access where governmental institutions or their
designees are the primary or depignated programmers or users
having editorial control over their programming .
. (2) "Affiliate" means a person that, directly or
indirectly, owns or controls, is owned or controlled by, or
is under common ownership or control with, another person.
(3) "Basic service" means any service tier
regularly provided to all subscribers which includes the
retransmission of one or more local television broadcast
signals.
(4) "Cab Act" means' the Cable Communications
Policy Act of 1984, 47 U.S.C. §§ 521 et seq., as amended by
the Cable Television Consumer Protection and Competition Act
of 1992, Pub. L. No. 102-385, 106 Stat. 1460, and as further
amended by the Telecommunications Act of 1996, Pub. L. No.
104-104, 110 Stat. 56.
(5) "Cable communications system" or "system" means
both open video systems and cable systems.
(6) "Cable Coordinator" means
individuals designated by the City to
communications system franchise.
the individual or
administer a cable
(7) "Cable system" means a facility, consisting of
a set . of closed transmission paths and assoc.iated signal
generation, reception, and control equipment that is
designed to provide cable service, including video
programming, that is provided to multiple subscribers within
a community, but such term does not include:
(A) A facility that serves only to retransmit
the television signals of one or more television broadcast
stations;
4
000530 syn 0071808
(B) A facility that serves subscribers without
using, or connecting to a facility that uses, any portion of
the publ rights-of-way within the City;
(C) . A facility of a common carrier which is
subject, in who or in part, to the provisions of Title II
(Common Carriers) of the Communications Act of 1934, except
that such facility shall be considered a cable system to the
extent such facility is used in the transmission of video
programming directly to subscribers, unless the extent of
such use is solely to provide interactive on-demand
services;
(D) Any facility of an elect c utility used
solely for operating its electric utility systems; or
(E) An OVS that is certified by the FCC.
Any reference to a cable system includes the
cable system as a whole or any part thereof, including, but
not limited to, pedestals, equipment cabinets, electronic
equipment, amplifiers, power guards, nodes, cables, fiber
optics and other equipment necessary or useful to operate
the cable system.
(8) "Cable service" means:
(A) The one-way transmission to subscribers of
(i) video programming, or (ii) other programming service;
and
(B) Subscriber interaction, if any, which
required for the selection or use of such video programming
or other programming service.
(9) "Cable modem" means a device used to transmit
data over a cable communications system.
(10) "Cable modem service" means an Internet access
service provided by an operator or its .affiliates over a
cable communications system. "Cable modem services" shall
not include "dial-up" access to the Internet services of the
operator or its affiliates.
(11) "Channel" means a portion
electromagnetic frequency spectrum which is used
system or an open video system and which is
delivering a television signal whether in an
digital format. The definition does not restrict
any channel to the transmission of analog
signals.
5
000530 syn 0071808
of the
in a cable
capable of
analog or
the use of
television
(12) "City" means the government of the City of Palo
Al to, a chartered city and a· municipal corporation duly
organized and validly existing under the laws of the state
of California, and all departments, divisions, and offices
thereof.
(13) "City Attorney" means the individual who is
designated as the city attorney the City· under Section
2.08.120 of Chapter 2.08 of Title 2 of the Palo Alto
Municipal Code, and any individual who is designated as the
representative of the city attorney.
individual who is
City under Section
of the Palo Alto
designated as the
(14) "City Clerk" means the
designated as the city clerk of the
2.08.110 of Chapter 2.08 of Title 2
Municipal Code, and any individual who is
representative of the city clerk.
(15) "Construction, operation, maintenance or
repair" or "construction; operation, maintenance a,nd repair"
or words of similar import means the named actions
interpreted broadly, encompassing, among other things,
installation, extension, maintenance, replacement of
components, relocation, undergrounding, grading, s
preparation, adjusting, testing, make-ready, and excavation.
(16) "Council" means the Council of the City of Palo
Al to exercising all powers necessary and appropriate
pursuant to Article III of the Charter.
(17) "Director of Administrative Services" means the
individual who is designated as the director of
administrative services the City under Section 2.08.150
of Chapter 2.08 of Title 2 of the Palo Alto Municipal Code,
and any individual who is designated as the representative
of the director of administrative services.
(18) "Director of Public Works" means the individual
who is designated as the director of public works of the
Ci ty under Section 2.08.190 of Chapter 2.08 of Title 2 of
the Palo Alto Municipal Code, and any individual who is
designated as the representative of the director of public
works.
(19) "Director of Utilities" means the individual
who is designated as the director of util s of the City
under Section 2.08.200 of Chapter 2.08 of Title 2 of the
Palo Alto Municipal Code, and any individual who is
designated as the representative of the director of
utilit s.
6
000530 syn 0071808
(20) "Downstream channel" means a channel designed
and activated to carry a transmission from the headend to
other points on a cable communications system, including
interconnections.
(21) "FCC"
Commission.
means the Federal Communications
(22) "Franchise" means an authorization granted by
the City to the operat.or of a cable communications system
giving the operator the non-exclusive right to occupy the
space, or use facilities upon, across, beneath, or over
public rights-of-way the City to provide cable
communications services therein.
(23) "Franchise area" means the area of the City
that a franchisee is authorized to serve by the terms of its
franchise or by operation of law.
(24) "Franchisee" means a person holding a cable
communications system franchise granted by the City.
(25) "Gross revenues" mean any and all revenue of a
"cable operator" (as defined in the Cable Act), of any kind,
nature or form, without deduction, derived from the
operation of a cable communications system to provide cable
service. "Gross revenues" shall be construed as broadly as
permitted by the Cable Act and any other applicable law. By
way of example a-nd not limitation, "Gross revenues" shall
include, but are not limited to, revenues from bas
service, cable programming services, any per-channel or
program services, equip·ment sales and rentals, cable modem
services, installation services, disconnection services,
reconnect ion services, late fees and other subscriber
charges, and revenues from the carriage of programming,
advertising, and shopping services. "Gross revenues" shall
be construed to include revenues of affiliates (other
those revenues, which are already treated as the revenues
. the franchisee), to the full extent necessary to prevent the
avoidance or evasion of any and all fees owed on gross
revenues. "Gross revenues" shall not include: (A) the
revenue of any person, including, without limitation, an
affiliate or a provider of video programming services to a
cable communications system operator, to the extent that
revenue is included in the gross revenues of that operatori
(B) taxes imposed by law on subscribers by a taxing
authority, which taxes a cable communication system operator
is obligated to collect and remit to the taxing authority,
provided, however, that neither the fee imposed by Sections
2.10.250 and 2.10.350 hereby, nor any tax or fee imposed on
the operator (as opposed to the subscriber) shall be deemed
to be such a taxi (C) any gains realized in the sale or
7
000530 syn 0071808
disposition of capital assets and other tangible property of
the operatori and (0) bad debts, provided, however, that the
recovery of bad debts shall be included in gross revenues to
the extent that such bad debts are subsequently collected.
(26) "Headend" means a combination of equipment at
a location within a cable communications system where
signals are received and processed for distribution to other
points on the cable communications system.
(27) "Hertzll means a measure of the electromagnetic
frequency spectrum.
(28) "Internet" means the myriad of facilities,
including, but not limited to, computer equipment and
software, comprising the interconnected networks that employ
the TCP lIP, or any predecessor or successor protocols to
TCP/IP, to communicate information.
(29) "Internet service provider" means a person,
including, but not limited to, an operator of a cable
communications system, who provides access to the Internet,
or who otherwise furnishes a service that enables users to
gain access to other services or .offerings over the
Internet.
(30) "Law" means any administrative, legislative or
judicial act, decision, bill, certificate, charter, code,
constitution, opinion, order, ordinance, policy, procedure,
rate, regulation, resolution, rule, schedule, speci cation,
statute, tariff, or other requirement of any federal,
California, state, regional, county, municipal, local, or
joint powers agency, or any other agency having joint or
several jurisdiction over the City, a franchisee or an
operator, including, but not limited to, any regulation or
order of an official or quasi-official entity or body, now
in force or hereinafter amended from time to time.
(31) "MHz" means one million Hertz.
~32) "Node" means a point of connection in a network
where signals carried on cable are converted to electrical
signals for carriag~ on other cable.
(33) "Operator", when used with reference to a
system, means a person (a) who directly or through one or
more affiliates provides cable service over a cable
communications system and directly or through one or more
affiliates owns a significant interest in such facility, or
(b) who otherwise controls or responsible for, through
any arrangement, the management and operation of a cable
communications system.
8
000530 syn 0071808
(34) "Open video system" or "OVS" means a facility,
consisting of a set of closed transmission paths and
associated signal generation, reception, and control
equipment that is designed to provide cable service,
including video programming, that is provided to multiple
subscribers within a community, including, but not limited
to, pedestals, equipment enclosures (such as equipment
cabinets), ampli ers, power guards, nodes, cables, fiber
optics and other equipment necessary to operate the OVS, or
installed in conjunction with the OVS, the operator of which
has been certified by the FCC as an OVS in the City.
(35) "ovs franchise" means a contract entered into
accordance with this Chapter between the City and an OVS
franchisee setting forth the terms and conditions under
which the OVS franchise will be exercised.
(36) "Person" includes any individual, corporation,
partnership, association, joint stock company, trust, or any
other legal entity, but not the City.
(37) "Public rights-of-way" means the surface of and
the space above and below any street, road, highway,
freeway, bridge, lane, path, alley, court, sidewalk,
kW9Y, drive, or right-of-way or easement primarily
dedicated to travel, now or hereafter existing within the
y which may be properly used for the purpose of
installing, constructing, operating, maintaining, and
repairing a cable communications system; and. any other
property that a franchisee is entitled by California or
federal law to use by virtue of the grant of a franchise.
(38) "Public property" means any property that
owned or under the control of the City that is not located
in the public rights-of-way, including, for purposes of this
Chapter, but not limited to, buildings, parks, and pole
structures, such as utility poles and light poles, or
similar facil s or prope owned by or leased to the
City.
(39) "School" means any accredited primary school,
secondary school, college, and university.
(40) "SEC"
Commission.
means the Securities and Exchange
(41) "Subscriber" or "customer" means the City or
any person who is lawfully receiving, for any purpose or
reason, any cable service by means of a cable communications
system, whether or not a fee is paid for such service.
9
000530 syn 0071808
(42) "TCP/IP" means
Protocol/Internet Protocol, a
computer and/or other networks.
the Transmission
set of protocols
Control
to . link
(43) "Upstream channel" means a channel designed and
activated to carry transmissions from a point on the cable
system, other than the headend, to the headend or another
point on the cable system.
(44) "User" means the ty or a person using 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."
SECTION 3. Section 2.10.020 of Chapter 2.10 of Title
2 of the Palo Alto Municipal Code is hereby amended and replaced
in its entirety to read, as follows:
"2.10.020 Nature of franohise.
(a) The Council may grant one or more nonexclusive,
revocable franchises to construct, operate, maintain and
repair a cab communications system in the City. A
franchise granted by the Council pursuant to this Chapter
shall authorize and permit a franchisee to construct,
operate, maintain and repair a cable system, or an OVS, as
applicable, to provide cable service in the franchise area,
and for that purpose to erect, install, construct, repair,
replace, reconstruct, and maintain facilities appurtenant to
such system in, on, over, under,· upon, across, and along
those public rights-of-way that the City may autho ze a
franchisee to use.
(b) No person may construct,
repair a cable communications system
first obtaining a franchise therefor.
operate,
in the
maintain or
Ci ty without
(c) A franchise shall not convey ghts other than
as specified in this Chapter, or in a franchise agreement; no
rights shall pass by implication.
(d) A franchise shall not
substitute for:
include, or be a
(1) Compliance with requirements for the
privilege of transacting and carrying on a business within
the City, including, but not limited to, compliance with the
conditions that the City may establish before facil ies may
be constructed for, or providing non-cable services;
(2) Any permit, agreement or authorization,
other than the authorization required by Section 2.1Q.020(a),
10
. 000530 syn 0071808
required in connection with operations on or in public
rights-of-way or public property, including, but not limited
to, encroachment permits, pole attachment permits and street
cut permits; and
(3) Any permit, agreement or authorization for
occupying any other property of the City or private entities
to which access is not specifically granted by the franchise.
(e) A franchise shall not relieve a franchisee of
its duty to comply with all laws, including laws of the City,
and every franchisee shall comply with the same. The right:;;
granted under a franchise are subject to the exercise of
police and other powers the City now has or may later obtain,
including, but not limited to, the power of eminent domain.
Every franchise issued by the' City shall be deemed to
incorporate the requirements of the Charter.
(f) A franchise shall not convey title, equitable or
legal, in the public rights-of-way, and the rights granted
therein may not be subdivided or subleased.
shall be exclusive, or prevent the
franchises or authorizations, or
self constructing, operating,
own cable communications system,
(g) No franchise
Ci ty from issuing other
prevent the City from
maintaining or repairing
with or without a franchise.
(h) Every franchise shall be for a term of years,
which term shall be not less than five years, unless a
franchise specifies otherwise.
(i) Unless specifically stated otherwise in a
franchise or required by law, all acts, which a franchisee is
required to perform under a franchise or applicable law,
shall be performed at the franchisee's exrense.
(j) If an operator of a cable communications system
fails to rform work that it is required to perform within
the time provided for performance, the City may perform or
cause the performance of the work and bill the operator
therefor, unless a franchise specifies otherwise. The
operator shall pay the amounts billed wi thin thirty days,
unless a franchise specifies otherwise.
(k) Every franchise
the Council in the form
resolution and a franchise
City and the franchisee, who
11
000530 syn 0071808
shall be issued and adopted by
of a separate ordinance or
agreement entered into by the
shall accept the franchise."
SECTION 4. Section 2. 10. 030 is hereby added to
Chapter 2.10 of Title 2 of the Palo Alto Municipal Code to read,
as follows:
2.10
"Section 2.10.030. Administration and regulations.
(a) The City may from time to time adopt rules and
regulations to implement the provisions of this Chapter.
This Chapter, and any rules and regulations adopted pursuant
thereto, are not contracts with any franchisee, and may be
amended at any time. .
(b) The Cable Coordinator is hereby authorized to
administer this Chapter and any franchise issued pursuant
thereto, and to provide or cause to be provided any notices
(including noncompliance not ) and to take any action on
behalf of the City that may be required under this Chapter
or a franchise, or under applicable law.
(c) The failure of the City, upon one or more
occasions, to exercise a right or to require compliance or
performance under a franchise. or any other applicable law
shall not be deemed to constitute a waiver of such right or
a waiver of compliance or performance, unless such right has
been specifically waived in writing.
(d) The City may designate one or more entities,
including itself, to control and manage the use of public,
educational and governmental access channels, facilities and
equipment owned, 6ontrolled or used by the City or the
designated entity or entit "
SECTION 5.
of Title· 2
Section 2.10. 040 is hereby added to Chapter
of the Palo Alto Municipal Code to read, as
follows:
"Section 2.10.040. Transfers.
(a) Every franchise shall be deemed to be held in
trust, and to be personal to the franchisee. Any transfer
that is made without the prior written approval of the City
shall be deemed to impair that trust. A transfer is any
transaction pursuant to which:
(1) A cable communications system, or any part
thereof, is sold or assigned, directly or indirectly, to any
person other than the franchisee holding a franchise for
that system (except the term does not include the sale of
portions of a cable communications system that are removed);
(2) Any change, acquisition, or trans rof
control of a franchisee or its direct or indirect parents,
12
000530 syn 0071808
whether by merger, consolidation, a sale of assets or
ownership interests, or by any other means, occurs. A
transfer occurs whenever there is a change, acquisition or
transfer of control of more than a ten percent ownership in
the outstanding voting securities or more than a twenty
percent ownership the outstanding non-voting ies
of the franchisee or its direct or indirect parents by any
entity, or a group of ent ies acting in concert. However,
a transfer also occurs whenever there is a change in actual
working control, in whatever manner exercised, over the
affairs of a franchisee or its direct or indirect parents.
Without limiting the above, any change in the general
partners of a franchisee will be presumed a change in
control; or
(3) The rights or
franchisee under its franchise
assigned, or leased, whole
indirectly, to another party.
obligations held by the
are transferred, sold,
or in part, directly or
(b) Notwithstanding any other provision of this
Chapter, pledges in trust, hypothecations, encumbrances,
ases, or mortgages of the assets of a cable communications
system to secure indebtedness may be. made without
application and without the City's prior written consent,
unless a franchise speci es otherwise. However, no such
arrangement may be made if it would in any respect under any
condition: (1) prevent the cable communications system
franchisee or any successor from complying with the
franchise or applicable law; or (2) permit any third party
(including any lender) to succeed to the interest of the
franchisee, or to own or control the system, without the
prior written consent of the City. Any mortgage, pledge,
hypothecation, encumbrance or lease shall be subject to and
subordinate to the rights of the City, as appropriate, under
any franchise, this Chapter, or other applicable law.
(c) The successors and assigns
shall be fully bound by the terms and
franchise."
of the franchisee
condi tions of the
SECTION 6. Section 2.10.050 is hereby added to
Chapter 2.10 of Title 2 of the Palo Alto Municipal Code to read,
as follows:
"Section 2.10.050. Construction, operation, maintenance
and repair.
(a) The construction, operation, maintenance and
r of cable communications systems shall be performed in
compliance with all laws and practices affecting such
system. This shall include, but not be limited to, zoning
13
000530 syn 0071808
and safety codes, construction standards, regulations for
providing notice to persons that may be affected by such
system. construction, and such directives governing the time,
p and manner in which lities may be installed in the
public rights-of-way. Any person engaged in the
construction, operation, maintenance or repair of
communications facilities shall exercise reasonable care in
the performance of all of its activities and shall use
commonly accepted methods and devices for preventing
lures and accidents that are likely to cause damage,
injury, or nuisance to the pub c or to property.
(b) A franchise shall be required before a permit
may be issued for work associated with the construction of a
cable communications system. Any permit issued for such
• work to a person that does not hold a franchise shall vest
no rights in the permittee; the permit may be revoked at
will, and the permittee shall remove all facilities
in led under the permit upon demand of the City.
(c) The construction, operation, maintenance and
repair of a cable communications system shall not commence
until the required permits have been obtained from· the
proper City officials and the, required fees have been paid.
All work will be performed in strict accordance with the
condi tions of the permits. Upon the receipt of written
notice of the Director of Publ Works or the Director
Util s, as applicable, any work and/or construction
undertaken that is not completed in compliance with the
City's requirements and. other applicable laws, or which is
installed .without obtaining necessary permits and approvals,
shall be removed or caused to be removed by the franchisee.
(d) Interference with the use of the public ghts-
of-way by others, including others that may be installing
cable communications systems, must be minimized. The City
may require a person using the public rights-of-way to
cooperate with others through j oint trenching and other
arrangements to minimize adverse impacts on the public
rights-of-way and public property.
(e) Unless it is impracticable, operators of cable
communications systems shall use existing poles and
conduits. Any person in the publ rights-of-way may not
insta additional poles, nor may vertical or horizontal
extenders be used to increase pole capacity, without the
permis on of the Director of Public Works, the Director of
Utilit s and/or any other individual(s) authorized by law
to grant such permission.
utilit
000530 syn 0071808
(f) Whenever the
s are located or
14
facilit s of all
are required to be
existing
relocated
underground in an area in the City, every franchisee and
every operator of a cable communications system the same
area shall locate their respective facil ies underground in
accordance with the requirements of Chapters 12.08, 12.12
and 12.16 of the Palo Alto Municipal Code.
(g) Any and all public rights-of-way, other public
property, or private property that is disturbed or damaged
during the construction, operation, maintenance or repair of
a cable communications system by or on behalf of a
franchisee shall be promptly repaired by the franchisee at
its expense. Public property and public rights-of-way
shall be restored to the satisfaction of the City or to a
condition as good as that which existed before the
disturbance or damage occurred.
(h) A franchisee shall, by a time spe fied by the
Director of Public Works or the Director of Uti lit s, as
applicable, protect, support, temporarily disconnect,
relocate, or remove any of its property when required by the
Ci ty in the exercise of its governmental or proprietary
powers by reason of traffic conditions; public safety;
public rights-of-way construction and repair (including, but
not limited to, regrading, resurfacing or widening); public
rights-of-way vacation; construction, instal ion or repair
of sewers, drains, water pipes, power lines, signal lines,
tracks, or any other type of government-owned system or
utili ty, public work, public facility, or improvement; or
for any other purpose where the work involved would be aided
by the removal or relocation of the cable communications
system. Collectively, such matters are referred to below as
the "public' work".
(1) The Director of Public Works or the
Director of Utilit , as applicable, shall provide written
notice describing where the public work is to be performed
at· least one week prior to the deadline by which a
franchisee must protect, support, temporarily disconnect,
relocate or remove its facilit s.
(2) In an emergency, or where a cable
communications system creates or is contributing to an
imminent danger to health, safety, or property, the City may
protect, support, temporarily disconnect, remove., or
relocate any and all parts of the cable communications
system without prior notice, and charge the franchisee for
costs incurred.
(i) To accommodate the construction, operation,
maintenance or repair of the facil ies of another person
authorized to use the public rights-of-way or public
property, a franchisee shall, by a time specified by such
15
000530 syn 0071808
person, protect, support, temporarily disconnect, relocate
or remove s facilities. The franchisee must be given
written notice describing where the construction, operation,
maintenance or repair is to be performed at least fifteen
days prior to the time by which its work must be completed.
The Director of Public Works and/or the Director of
Utilities, as applicable, may resolve disputes as to
responsibility for costs associated with removal, relaying,
or relocation of facilities among entities authori zed to
install facilities in the public rights-of-way or on public
property if such entities are unable to do so themselves.
(j) A franchisee shall, on the request of any
person holding a valid permit issued by a governmental
. authority, temporarily raise or lower its wires by a time
specified to permit the moving of buildings or other
obj ects. A franchisee shall be given not less than seven
days' advance written notice to arrange for such temporary
wire changes. The expense of such temporary removal or the
raising or lowering of wires shall be paid by the rson
requesting the same.
(k) A franchisee shall remove its property in the
public rights-of-way that it intends to abandon within
ninety days a er it gives written notice to the City of its
intention to abandon. However, if, wi thin ninety days of
the receipt of written notice of abandonment, the City
determines that the safety, appearance, function or use of
public rights-of-way and facilities in public rights-of-way
will be adversely affected, the franchisee may abandon its
property after receipt of appropriate notice from the City.
A franchisee that abandons its property must, upon request,
transfer ownership of the property to the City at no cost,
and execute necessary quitclaim deeds and indemnify the City
against future costs associated with the mitigation or
elimination of any -environmental hazard associated with the
abandoned property.
(1) Every cable communications system shall be
subject to inspection and testing by the City. Each
franchisee shall respond to requests for information
regarding its system and plans for the system as the City
may from time to time issue, including, but not limited to,
a request for information regarding its plans for the
construction, operation, maintenance and repair and the
purposes for which the system is being constructed,
operated, maintained or repaired.
(m) Each franchisee that places facilities
underground shall be a member of the regional notification
center for subsurface installations (Underground Services
Alert) as may be required by California Government Code
16
000530 syn 0071808
§§ 4216 et seq., and shall field mark the locations of its
underground communications facilities upon request. A
franchisee shall locate its facilities for the City at no
charge.
(n) Each franchisee shall provide to the City a plan
for any initial system construction, or for any substantial
rebuild, upgrade or extension of its facility, which shall
show its timetable for construction of each phase of the
project, and the areas of the City that will be affected."
SECTION 7. Section 2.10.060 is hereby added to
Chapter 2.10 of Title 2 of the Palo Alto Municipal Code to read,
as follows:
\\Section 2.10.060. Indemnity,
security fund.
insurance, bonds and
(a) No franchise shall be valid or effective until
and unless the City obtains an adequate indemnity from the
franchisee. The indemnity shall:
(1) Re ase the City from and against any and
all liability and responsibil y in or arising out of the
construction, operation, maintenance or repair of the cable
communications system. Each franchisee must further agree
not to sue or seek any money or damages from the City in
connection with the grant of that franchisee's franch
and also agree to abide by the City's laws.
(2) Indemnify and hold harmless the City, its
elected and appointed officers, agents, and employees, from
and against any and all claims, demands, or causes of action
of any kind or nature, and the resulting losses, costs,
expenses, reasonable attorneys' fees, liabilities, da~ages,
orders, judgments, or decrees sustained by the City or any
third party arising out of, or by reason of, or resulting
from or of the acts, errors, or omissions of the franchisee,
or its agents, contractors, subcontractors or employees
related to or in any way arising out of the construction,
operation, maintenance or repair of the system.
(b) A franchisee (or those acting on its behalf)
shall not commence or cause the commencement of the
construction, operation, maintenance or repair of the system
without obtaining and maintaining insurance in amounts and
of a type satisfactory to the City. The required insurance
must be obtained and maintained for the entire period the
franchisee owns~ controls or manages facilities in the
public rights-of-way. If the franchisee, its agents,
contractors, and subcontractors do not have the required
insurance, the Cable Coordinator may order such entities to
17
000530 syn 0071808
stop operations
approved ..
until the insurance is obtained and
(c) Certificates of insurance, reflecting evidence
of the required insurance and naming the City as an
addi tional insured, and other proofs as the City may find
necessary, shall be filed with the City Clerk. For any
person issued a franchise after the effective date of this
Chapter,. the certificates and other required proofs shall be
filed wi thin thirty days of the issuance of a franchise,
once a year thereafter, and whenever there is any change in
coverage. For entities that have facilities in the public
rights-of-way as of the effective date of this Chapter, the
certificates shall be filed within sixty days of the
effecti ve date of this Chapter, annually thereafter, and
whenever there is any change in coverage, unless a pre-
existing franchise provides for the filing of certificates
in a different manner.
(d) Certificates shall contain a provision that
coverage afforded under these policies will not be canceled
until at least thirty days' prior written notice has been
gi ven to the City. Only companies authorized to provide
insurance coverage under the laws of the state of California
must issue policies. Financial ratings must be no less than
"A: VII" in the latest edition of "Best's Key Rating Guide",
published by A.M. Best Guide.
(e) A franchisee (and those acting on its behalf to
construct or operate the system) shall obtain and maintain
the following minimum insurance. The City shall be named as
an additional insured on the general liability and
automotive policies. Those insurance policies shall be
primary and contain a cross-liability clause.
(1) COMMERCIAL GENERAL LIABILITY insurance to
cover liability bodily injury and property damage. Exposures
to be covered are premises, operations, products/completed
operations, and certain contracts. Coverage must be written
on an occurrence basis, with the following limits of
liability:
Bodily Injury
1. Each Occurrence
2. Annual Aggregate
Property Damage
1. Each Occurrence
2. Annual Aggregate
Personal Injury
1. Annual Aggregate
18
000530 syn 0071808
$1,000,.000
$3,000,000
$1,000,000
$3,000,000
$3,000,000
Completed Operations and Products ability shall be
maintained for two years after the termination of the
franchise or completion of the work for the cable
communications system owner or operator (in the case of a
contractor or subcontractor).
Property Damage Liabil Insurance shall include
Coverage for the following hazards: X explosion, C
Collapse, U -underground.
(2) WORKERS' COMPENSATION insurance shall be obtained
and maintained during the life of the franchise to comply
with statutory limits for all employees, and in the case any
work is sublet, each franchisee shall require its contractors
and subcontractors similarly to provide workers' compensation
insurance for all of the latter's employees unless such
employees are covered by the protection afforded by the
franchisee. Each franchisee and s agents, contractors and
subcontractors shall obtain and maintain during the life of
this policy employers liability insurance. The following
minimum limits must be maintained:
Workers' Compensation
Employer's Liability
(3) COMPREHENSIVE AUTO LIABILITY
Bodily Injury
1. Each Occurrence
2. Annual Aggregate
Property Damage
1. Each Occurrence
2. Annual Aggregate
Statutory
$500,000 per
Occurrence
$ 1,000,000
$ 3,000,000
$ 1,000,000
$ 3,000,000
Coverage shall include owned, hired, and non-owned
vehicles.
(f) Every franchisee shall obtain and maintain a
performance bond to ensure the faithful performance of its
responsibilities under this Chapter and any franchise. The
amount of the performance and payment bonds shall be set by
the Cable Coordinator or may be set in a franchise ordinance
in light of the nature of the work to be performed, but shall
not be ss than ten percent of the estimated cost of
constructing or (in .the case of existing systems) upgrading
the system. The bonds are not in lieu of any additional
bonds that may be required through the permitting process.
The bond shall be in a form acceptable to the City Attorney.
Bonds must be obtained prior to the effective date of any
19
000530 syn 0071808
franchise, transfer or. franchise renewal, unless a franchise
specifically provides otherwise.
(g) Every franchisee shall establish and maintain a
securi ty fund in cash or provide the City an irrevocable
letter of credit in the amount of $100,000 to secure the
payment of fees owed, to secure any other performance
promised in a franchise, and to pay any taxes, fees or liens
owed to the City. The letter of credit shall be in a form
and with an institution acceptable to the Director of
Administrative Services and in a form acceptable to the City
Attorney. If the. City should draw upon the security fund or
the letter of credit, the franchisee shall, within fourteen
days, restore the security fund or the letter of credit to
the required full amount. This security fund or letter of
credit may be waived or reduced by the City for a franchisee
where the City determines in its discretion that a particular
franchisee's operations are sufficiently limited that· a
security fund or a letter of credit is not necessary to
secure the required performance. The City may from time to
time require a franchisee to change the amount of the
required security fund and letter of credit to reflect
changed risks to the City and to the public, including
delinquencies in taxes pr other payments to the City. The
security· fund or the letter of credit must be obtained prior
to the effective date of any franchise, transfer or franchise
renewal, unless a franchise specifically provides otherwise."
SECTION 8. Section 2.10.070 is hereby added to
Chapter Title 2 of the Palo Alto Municipal Code to read,
as follows:
"Section 2.10.070. Enforcement and remedies.
(a) The City Council may revoke a franchise or
reduce the term of a franchise if it finds, after notice of
proposed revocation and an opportunity for a hearing, that a
Jranchisee has violated its franchise or this Chapter i has
defrauded or attempted to defraud the City or subscribersi or
has attempted to evade the requirements of its franchise or
this Chapter. Except as to violations that are impossible to
cure, and as provided in Sections 2.10.070(b) and
2.10.070(c), the franchise may be revoked only if the
franchisee is given written notice of the default and thirty
days to cure the default, and the franchisee fails to cure
the defaul~, or to propose a written schedule for curing the
de·fault acceptable to the City, where it is impracticable to
cure the default within thirty days.
(b) No opportunity to cure is required for willful
violations or where repeated violations demonstrate a pattern
of non-compliance, and fraud and attempted fraud shall be
20
000530 syn 0071808
deemed incurable. The City may declare a franchise forfeited
without an opportunity to cure where a franchisee voluntarily
ceases providing service that is required to provide or
transfers the franchise without the prior written consent of
the City.
(c) A franchise will terminate automatically by
operation of law 120 days after an assignment for the benefit
of creditors or the appointment of a receiver or trustee to
take over the business of the franchisee, whether in a
receivership, reorganization, bankruptcy, assignment the
benefit of creditors, or other action or proceeding; However,
the franchise may be reinstated within that 120-day period,
if: (1) such assignment, receivership or trusteeship has
been vacated; or (2) such assignee, receiver or trustee has
fully complied with the terms and conditions of this Chapter
and the franchise, and has executed an agreement, approved by
any court of competent jurisdiction, assuming and agreeing to
be bound by the terms and conditions of this Chapter and the
franchise. In the event of foreclosure or other judicial
sale of any of the facilities, equipment or property of a
franchisee, the City may revoke the franchise following a
publ hearing before the Council. The City shall serve
notice upon the franchisee and the successful bidder at the
sale, in which event the franchise and all rights and
privileges thereunder will be revoked and will terminate
thirty days after serving such notice, unless the City has
approved the transfer of the franchise to the success
bidder, and the successful bidder has promised and agreed
wi th the City to assume and be bound by the . terms and
conditions of the franchise and this Chapter.
(d) Upon the termination or forfeiture of a
franchise, whether by action of the City as provided above,
or by passage of time, a franchisee must stop using its cable
communications system for the purposes authorized by the
franchise. The City may take possession of some or all of
franchisee's facilities consistent with 47 U.S.C. § 547, or
require the franchisee or its bonding company to remove some
or all of the franchisee's facil ies from the areas of the
City, and restore the affected property and the public
rights-of-way to their same or better condition. This
provision shall not permit the City to remove facilit that
are used to provide another service for which the franchisee
holds a valid franchise or other authorization issued by the
City or other governmental authority, as applicable.
(e) The remedies provided for under this Chapter, or
under a franchise, shall be cumulative. The recovery by the
City of any amounts under insurance, the performance bond,
the security fund or the er of credit, shall not limit a
franchisee's duty to indemnify the City, or relieve a
21
000530 syn 0071808
franchisee of s franchise obligations or limit the amounts
owed to the City.H
SECTION 9. Section 2.10.080 is hereby added to
Chapter 2.10 of Title 2 of the Palo Alto Municipal Code to read,
as follows:
"Section 2.10.080. Books and records.
(a) Each franchisee shall provide the City access
to books and records related, in whole or in part, to the
construction, operation, maintenance or repair of the cable
communications system, or a group of systems of which the
system is a part, so that the City may inspect and copy
those books and records, including those that relate to the
monitoring or enforcement of a franchisee's compliance with
this Chapter or a franchisee's franchise. The records shall
include, but are not limited to, revenue records, and other
records related to compliance with any provision of this
Chapter or a franchise. A franchisee shall be responsible
for obtaining and maintaining the necessary possession or
control of all such books and records, so that it can
produce the documents upon request. Books and records shall
be maintained for a period of five years, except that a
franchise may specify a shorter period for certain
categories of voluminous books and records where the
information contained therein can be derived simply from
other materials. The phrase "books and records" shall be
read expansively to include information in whatever formats
the same may be stored.
(b) Books and records requested shall be produced
to the City by a time and at a location in the City
designated by the Cable Coordinator. However, if the
requested books and. records are too voluminous, or for
security reasons cannot be copied and moved, then the
franchisee may request that the inspection take place at
some other location mutually agreed to by the City and the
fra'ilchisee, provided that (1) the franchisee shall make
necessary arrangements for copying documents selected by the
City after its review; and (2) the franchisee shall pay all
travel and additional copying expenses incurred by the City
(above those that would have b~en incurred had the documents
been produced in the City) in inspecting those documents or
having those documents inspected by its designee.H
SECTION 10. Section 2.10.090 is hereby added to Chapter
2.10 of Title 2 of the Palo Alto Municipal Code to read, as
follows:
22
000530 syn 0071808
"Section 2.10.090. Reports.
(a) The Cable Coordinator may from time to time
direct a franchisee to prepare reports related to monitoring
or enforcing a franchisee's compliance with this Chapter or a
franchisee's franchise and to submit those reports by a date
certain, in a format prescribed by the City Manager, in
addition to those required by this Chapter.
(b) Uriless the Cable Coordinator grants an
exemption, within forty-five days of the end of each quarter,
a franchisee shall submit a report to the City containing the
following information:
(1) The number of service calls (calls requi ng a
truck roll) received during the prior quarter and the
percentage of service calls compared to the subscriber base;
and
(2) The total estimated hours of known outages as a
percentage of total hours of operation. The term "outage"
means a loss of sound or video on any signal, or a
significant deterioration of any signal affecting two or more
subscribers.
(c) Unless the Cable Coordinator grants an exemption,
no later than ninety days after the end of its fiscal year, a
franchisee shall submit the following information:
(1) A fully audited or certified revenue report
from the preceding calendar year for the cable communications
system, and· a certified statement setting forth the
computation of gross revenues used to calculate the franchise
fee for the preceding year and a detailed explanation of the
method of computation showing: (i) gross revenues by category
(including, but not limited to, basic, pay, pay-per-view,
advertising, installation, equipment, late charges,
miscellaneous, other); and (ii) the deductions, if any, that
were made from gross revenues in calculating the franchise
fee (including, but not limited to, bad debt, credits and
refunds), and the amount of each deduction;
(2) A report showing, for each applicable
customer service standard, the franchisee's performance with
respect to that standard for each quarter of the preceding
year. In each case where the franchisee or the Cable
Coordinator concludes that the franchisee did not comply
fully, the franchisee will describe the corrective actions it
is taking to assure future compliance. In addition, the
report should identify the number and nature of the customer
23
000530 syn 0071808
service complaints received and an explana on of their
dispositions;
(3) A report showing the number of linear feet
of public rights-of-way occupied by the franchisee's system,
the total number of the franchisee's subscribers, and the
total number of the franchisee's basic service subscribers
and subscribers for each tier of cable programming service
offered; and
(4) An ownership report, indicating the number
and names of all persons whom at the time of filing control
or own an interest in the franchisee of ten percent or more
of the outstanding voting securities of the franchisee.
(d) Within ten days of their receipt or (in the case
of documents created by the franchisee or its a liate)
filing, a franchisee shall provide the City:
(1) Any notices of de ciency or forfeiture
related to the operation of the system; and
(2) Any requests for protection under
bankruptcy laws, or any judgment related to a declaration of
bankruptcy by the franchisee or by any partnership or
corporation that owns or controls, directly or· indirectly,
the franchisee."
SECTION 11. Section 2.10.100 is hereby added to Chapter
2.10 of Title 2 of the Palo Alto Municipal Code to read, as
follows:
. "Section 2.10.100. Maps and improvement plans.
Each franchisee shall maintain accurate maps and
improvement plans which show the location, size, and a
general description of all facilities installed in the public
rights-of-way and any power supply sources (including
voltages and connections). Maps and improvement plans shall
be based upon post-construction inspection to verify
location. Each franchisee shall provide a map to the
Director of Public Works and/or the Director of Utilities, as
applicable, showing the location of its facilities, in such
detail and scale as may be directed by ·the Director of Public
Works and/or the Director of Utilities, as applicable, and
shall update the map at least annually, and whenever the
facility expands or is relocated. Copies of maps and
improvement plans shall be provided in 3 mil Mylar format and
on disk, in a Commercially available electronic format
specified by the Director of Public Works and/or the Director
of Utilities, as applicable."
24
000530 syn 0071808
2.10
SECTION 12.
of Title 2 of
Section 2.10.110 is hereby added to Chapter
the Palo Alto Municipal Code to read, as
follows:
"Section 2.10.110. Other records.
(a) Unless the
requirement, a franchisee
years at all times maintain:
Cable
shall
Coordinator waives
for a period of five
the
( 5)
(1) Records of all complaints received, their
nature and resolution. The term II complaints II refers to
complaints about any aspect of the franchisee's operations;
(2) Records of outages known to the franchisee,
their cause and duration;
(3) Records of service calls for repa and
maintenance indicating the date and time service was
requested, the date of acknowledgment and date and time
service was scheduled (if it was scheduled), and the date and
time service was provided (whether or not a resolution of the
complaint was achieved), and (if different) the date and time
the problem was solved;
(4) Records of installation and reconnectioh
and requests for service extension, indicating the date of
request, the date of acknowledgment,' and the date and time
that service was extended; and
(5) Records sufficient to show whether the
franchisee has complied with each customer service standard
that applies to it."
SECTION 13. Section 2.10.120 is hereby added to Chapter
2.10 of Title 2 of the Palo Alto Municipal Code to read, as
follows:
"Section 2.10.120. Exemptions.
The Cable Coordinator may temporarily exempt any
franchisee from its obligations under Sections 2.10.080,
2.10.090, 2.10.100, and, 2.10.110 if the City Manager
determines that, the requirement would be unduly burdensome or
unnecessary, and that the City and subscriber interests may
be adequately protected in some other manner."
SECTION 14. Section 2.10.130 is hereby added to Chapter
2.10 of Title 2 of the Palo Alto Municipal Code to read, as
follows:
25
000530 syn 0071808
"Section 2.10.130. Privacy.
A franchisee shall take all reasonable steps required
so that it is able to provide reports, books and records to
the Cable Coordinator, including by ·providing appropriate
subscriber privacy .notices. Each franchisee shall be
responsible for redacting data that applicable law prevents
it from providing to the City. Nothing in this Section shall
be read to require a franchisee to violate California or
federal subscriber privacy laws."
SECTION 15. Section 2.10.140 is hereby added to Chapter
2.10 of Title 2 of the Palo Alto Municipal Code to read, as
follows:
"Section 2.10.140. Procedures for payment.
(a) The franchise fee paid pursuant to Section
2.10.250, or fee in lieu of franchise fee paid pursuant to
Section 2.10.350, shall be paid quarterly unless specified
otherwise in a franchise. Payment for each quarter shall be
made to the City not later than forty-five days after the end
of each calendar quarter.
(b) Unless a franchise provides otherwise, a
franchisee or other entity subj ect to a fee under Section
2.10.250 or Section 2.10.350 shall fi with the Cable
Coordinator wi thin forty-five days of th.e end of each
calendar quarter a statement showing gross revenues during
the preceding quarter and the number of subscribers served.
(c) No acceptance by the City of any payment shall
be construed as an accord and satisfaction that the amount
paid is fact the correct amount, nor shall such acceptance
of such payment be construed as a waiver or release of any
claim the City may have for additional sums payable.
(d) Neither the franchise fee under Section
2.10.250, nor the fee paid in lieu of the franchise fee under
Section 2.10.350, is a payment in lieu of any tax, fee or
other assessment of general applicability (including any such
tax,. fee or assessment imposed on utilities, cable and OVS
operators or their services, but not including a tax, fee, or
assessment which is unduly discriminatory against cable and
OVS system operators or cable subscribers).
(e) In the event that a fee payment is not received
by the City on or before the due date set forth in this
Section or in a franchise, or the fee owed is not fully paid,
the person subject to the fee will be charged interest from
the due date at the highest interest rate allowed by
California law.
26
000530 syn 0071808
(f) Within ninety days of the date a franchisee
ceases operations under a franchise (whether because of
franchise termination, transfer, bankruptcy or for any other
reason), the franchisee shall Ie a final statement of
revenues covering the period from the beginning of the
calendar year in which' the operations ceased to the date
operations ceased. The statement shall contain the
info~mation and shall be certified as required by
Section 2.10.090(c) (1)."
. SECTION 16. Section 2~10.200 is hereby added to Chapter
2.10 of Title 2 of the Palo Alto Municipal Code to read, as
follows:
"Section 2.10.200. Cable system franchise application.
(a) A written application must be filed for an
initial and a renewal cable system franchise, or for approval
of a transfer with the City. A request for renewal led
under 47 U. S. C. § 546 (h) need not contain the information
required by Section 2.10.200(b).
(b) The Cable Coordinator may specify the
information that must be provided in connection with an
application, and the form in which the information is to be
provided.
(1) At a minimum each application must identify
the applicant, show that the applicant is financially,
technically and legally qualified to construct, operate,
maintain and repair the cable system, contain a pro forma
showing capital expenditures and expected income and expenses
for the first five years the applicant is to hold the
franchise, and show that the applicant is ready, willing and
able to comply unconditionally with this Chapter and its
franchise obligations.
(2) Any application for an initial franchise
must describe in detail the cable system that the applicant
proposes to build, show where it will be located, set out the
system construction schedule, and show that the applicant
will provide adequate channels, facilit s and other support
for public, educational and governmental' use (including
institutional network use) of the cable system.
(3) To be accepted for ling, not less than one
original and two copies of an application must be submitted.
All applications shall include the names and addresses of
individuals authorized to act on behalf of the applicant with
respect to the application.
27
000530 syn 0071808
(4) An applicant (and the transf~ror and
transferee, in the case of a transfer) shall respond to any
request for information from the City, by the time specified
by the City.
(c) If the City finds that it is in the public
interest to issue a franchise considering the factors above,
and such other matters as is required or entitled to
consider, and subject to the applicant's entry into an
appropriate franchise agreement, it shall issue a franchise.
Prior to deciding whether or not to issue a franchise, the
City may hold one or more public hearings or implement other
procedures under which comments from the public on an
application may be received.
(d) An application may be rejected if it is
incomplete, or if the response to requests for information is
not timely and complete. An app cant shall not be precluded
from filing ,another application."
2.10 of
follows:
section 2.10.210 is hereby added to Chapter
of the Palo Alto Municipal Code to read, as
"Section 2.10.210. Initial
applications.
and renewal franchise
(a) This section establishes additional provisions
that apply to an application for an init 1 franchise, or a
renewal franchise application that is not governed by 47
U.S.C. § 546(a)-(g}.
(b) Any person may apply for an init 1 or a renewal
franchise by submitting an application therefor on that
person's own initiative, or in response to a request for
proposals issued by the City. If the City receives an
unsolicited application, may choose to issue a request for
additional proposals, and require the applicant to amend its
proposal to respond thereto. The City snall promptly conduct
such investigations as are necessary to act on an
application.
(c) In 'determining whether to grant a franchise, the
City may consider:
(1) The extent to which an applicant for a
renewal franchise has substantially complied with applicable
law and the material terms of any existing cable franchise;
(2) Whether an applicant for a renewal
franchise's quality of service under its existing franchise,
including, but not limited to, signal quality, response to
28
000530 syn 0071808
customer complaints, billing practices, and the like has been
reasonable in light of the needs of the community;
(3) Where the
a cable system franchise in
applicant has not previously held
the City, whether the applicant's
indicates that it can be relied record in other commun
upon to provide high-qua
term;
throughout any franchise
legal, and
facilit s,
satisfy any
(4) Whether the applicant has the financial,
technical ability to provide the services,
and equipment set forth in an application, and to
minimum requirements established by the City;
(5) Whether the applicant's application is
reasonable to meet the future cable-related needs and
interests of the City, taking into account the cost of
meeting such needs and interests;
(6) Whether the issuance of a franchise is
warranted in the public interest considering the immediate
and future effect on publ rights-of-way, public property,
and private property that will be used by the applicant's
cable system;
(7) Whether the issuance of the franchise would
reduce competition in the provision of cable service in the
City; and
(8) Such other matters as the City is
authorized or required to consider.
(d) If the City determines that the issuance of a
franchise would be in the public interest considering the
factors described above, it may proffer a franchise agreement
to the applicant. No franchise shall become effective until
the franchise is unconditionally accepted by the applicant,
and the franchise agreement is signed."
SECTION 18. Section 2.10.220 is hereby added to Chapter
2.10 of Title 2 of the Palo Alto Municipal Code to read, as
llows:
"Section 2.10.220. Renewal franchise under 47 U.S.C. §
546.
(a) This section establishes additional provisions
that apply to renewal franchise applications governed by 47
U.S.C. § 546(a)-(g).
(b) A franchisee which intends to exercise rights
under 47 U.S.C. § 546(a)-(g) shall submit a notice in writing
29
000530 syn 0071808
to the City Manager in a timely manner clearly stating that
it is activating the procedures set forth in those sections.
The City shall thereafter commence any proceedings that may
be required under federal law, and upon completion of those
proceedings, the City may sue a request for proposals and
an application may be submitted for renewal. The City may
preliminarily deny the application by ordinance or
resolution, and if the application is preliminarily denied,
the City may conduct such proceedings and by ordinance or
resolution establish such procedures and appoint such
individuals as may be necessary to conduct any proceedings to
review the application, consistent with 47 U.S.C. § 546{a)-
(g)."
SECTION 19. Section 2.10.230 is hereby added to Chapter
2.10 of of the. Palo Alto Municipal Code to read, as
follows:
"Section 2.10.230. Cable system transfer application.
(a) This section establishes additional provisions
that~pply to applications for transfer approval.
(b) An application for transfer must contain all the
information required by the Cable Coordinator, by Section
2.10.200 et seq., and all information required by any FCC
transfer form, including Form 394.
(c) In determining whether a transfer application
should be granted, denied, or granted subject to conditions,
the City may consider to the extent permitted by law the
legal, financial, and technical qualifications . of the
transferee to operate the cable system; any potential impact
of the transfer on subscriber rates or' services; whether the
incumbent cable operator is. in compliance with its franchise
and, if not, whether the incumbent or the transferee
furnishes adequate cure or assurance of cure; whether the
transferee owns or controls any other cable communications
system in the City, whether operation by the transferee may
eliminate or reduce competition in the delivery of cable
service in the City; and whether transfer of the system to
the transferee or approval of the transfer would otherwise
adversely affect subscribers, the public, or the City's
interests under this Chapter, the franchise, or other
applicable law. The proposed transferee shall pay all actual
and reasonable costs incurred by the City in reviewing and
evaluating an application for a transfer.
(d) In order to obta,in approval of a transfer, an
applicant must show, at a minimum that: the transferee is
qualified; the transfer will not adversely affect the
interests of subscribers, the public, or the City; and that
30
000530 syn 0071808
franchise and Chapter non-compliance issues have been
resolved. No application shall be granted unless the
transferee agrees in writing that it will abide by and accept
all terms of this Chapter and the franchise, and that it will
assume the obligations , liabilities, and responsibility for
all acts and omissions, known and unknown, of the previous
franchisee for all purposes."
SECTION 20. Section 2.10.240 is hereby added to Chapter
. 2.10 of t of the Palo Alto Municipal Code to read, as
follows:
"Section 2.10.240. Legal qualifications.
(a) The applicant. for an initial franchise or for
the transfer of a franchise shall comply with the provisions
of this Chapter and applicable laws, and it shall comply with
the requirements of a franchise as the City may lawfully
require.
(1) The applicant must not have had any cable
system or OVS franchise validly revoked, and the revocation
is no longer subj ect to appeal, by the ty wi thin three
years preceding the submission of the application.
(2) The applicant may ·not have had an
application to the City for an initial or a renewal cable
system franchise denied on the ground that the applicant
failed to propose a cable system meeting the cable-related
needs and interests of the community (or, in the case of a
franchise renewal, denied on the ground that the franchisee
failed substantially to comply with the material terms of its
franchise), or as to which any challenges to such franchising
decision were finally resolved (including any appeals)
adversely to the applicant, within three years preceding the
submission of the application; and may not have had an
application for an initial or a renewal OVS franchise denied
by the City on any ground within three years of the
application.
(3) The applicant shall not be issued a
franchise if, at any time during the ten years preceding the
submission of the application, the applicant or any of its
officers or directors was convicted of fraud, racketeering,
anticompetitive actions, unfair trade practices or other
conduct of such character that the applicant cannot be relied
upon to deal truthfully with the City and the subscribers, or
to substantially comply with its obligations.
(4) The applicant must hav~ the necessary
authority under California and federal law to operate a cable
system and to conduct business in the state of California and
31
000530 syn 0071808
the City, or show that it is in a position to obtain that
authority.
(5) The applicant shall not be issued a
franchise if it files materially misleading information in
its application or intentionally withholds information that
the applicant lawfully is required to provide.
For the purposes of Section 2.10.240(a) (1)-(3),
the term "applicant" includes any affiliate of the applicant.
(b) Notwithstanding Section 2.10.240(a), an
applicant shall be provided a reasonable opportunity to show
that a franchise should issue even if the requirements of
Section 2.10.240(a) (1)-(3) are not satisfied, by virtue of
the circumstances surrounding the matter and the steps taken
by the applicant to cure all harms flowing therefrom and
prevent their recurrence, the lack of involvement of the
applicant's principals, or the'remoteness of the matter from
the operation of a cable system."
SECTION 21. Section 2.10.250 is hereby added to Chapter
2.10 of Title 2 of the Palo Al to Municipal Code to, read, as
follows:
"Section 2.10.250. Franchise fee.
An operator of a cable system shall pay to the City a
franchise fee in an amount equal to five percent of gross
revenues, or such other amount as may be specified in the
franchise; provided, however, that if the franchise specifies
an amount, that amount shall be subj ect to increase should
federal limits on fee payments be eliminated or changed and
other operators are subject to the same modified fee."
SECTION 22. Section 2.10.260 is hereby added to Chapter
2.10 of Title 2 of the Palo Alto Municipal Code to read, as
follows:
"Section 2.10.260. No exclusivity.
A franchisee may not require a subscriber or a
building owner or manager to enter into an exclusive contract
as a condition of providing or continuing service. However,
nothing herein prevents a franchisee from entering into an
otherwise lawful, mutually desired exclusive arrangement with
a building owner or manager of a multiple dwelling unit or
commercial subscriber."
SECTION 23. Section 2.10.270 is hereby added to Chapter
2.10 of Title 2 of the Palo Al to Municipal Code to read, as
follows:
32
000530 syn 0071808
"Section 2.10.270. Minimum franchise conditions.
(a) In addition to satisfying such additional or
stricter conditions as the City finds necessary based on its
investigations, the following elements shall be required,
subject to the requirements of 47 U.S.C. § 546, in the case
of every franchisee serving more than 1000 subscribers:
(1) Each franchisee shall provide a cable
system that uses at least two-way 750MHz equipment of high
quality and reliability.
(2) Each franchisee shall install and activate
the return portion of the cable system in the sub-low
transmission frequency (split) spectrum of 5 MHz to 30 or 40
MHz.
(b) A franchisee shall provide a minimum of five
channels for PEG access to each subscriber.
(1) Each franchisee shall install, maintain,
and replace as necessary, a dedicated, bi-directional fiber
optic link between its headend and a location designated by
the City as the primary access center. Each franchisee shall
install, maintain, and replace activated two-way cable plant'
and all headend, cable plant, and node equipment required to
make it operable so that the City, schools, and all
designated PEG access centers and access facili t located
within the franchise area will be able to· send and receive
signals (video, audio, and data) using the activated two-way
cable plant. Each franchisee shall ensure that technically
adequate signal quality, routing systems, and switching
and/or processing equipment are initially and continuously
provided all access interconnections both within the
franchisee's cable system and with other cable communications
systems throughout the duration of its franchise.
(2) In the event a franchisee makes any change
in the cable system and related equipment and facilities or
in the franchisee's signal delivery technology which directly
or indirectly substantially affects the signal quality or
transmission of access programming, the franchisee shall at
its expense take necessary steps or provide necessary
technical assistance, including, but not limited to, the
acquisition of all necessary equipment, to ensure that the
capabilities of access programmers are not diminished or
adversely affected by such change.
(3) A franchisee shall maintain all access
channels (both upstream channels and downstream channels) and
all interconnections of access channels at the same level of
33
000530 syn 0071808
technical quality and reliability as the best commercial
channels carried on the system.
(c) Every franchisee shall provide service in its
franchise area upon request to any son or any government
building. Each franchisee shall extend service upon request
wi thin its franchise area, provided that, a franchise may
permi t a franchisee· to require a potential subscriber to
c6ntribute a fair share the capital costs of installation
or extension as a condition of extension or installation in
cases where such extension or installation may be unduly
expensive. Service shall be provided within the time limits
specified in Section 2.10.270(d).
(d) Except asa franchise provides otherwise,
service must be extended upon request to any person or to any
government building in a franchisee's franchise area:
(i) wi thin seven days of the request, where service can be
provided by activating or installing a drop of 125 feet or
less; (ii) within thirty days of the request, where service
can be provided by activating a drop of a length in excess of
125 feet, but not exceeding one-quarter mile; (iii) within
ninety days of the request, where an extension of one-quarter
mile to one-half mile is required; or (iii) within six months
where an extension of more than one-half mi is required.
(e) A cable system wi thin the City shall meet or
exceed the technical standards set forth in 47 C.F.R.
§ 76.601 and any other applicable technical standards.
(f) Each franchisee shall perform at its expense
such. tests as may be necessary to show whether or not the
franchisee is in compliance with its obligations under
applicable FCC standards, this Chapter or a franchise.
(g) Upon request of the City, every cable system
shall be required to interconnect with every other cable
communications system within the City on fair and reasonab
terms for purposes of providing PEG and institutional network
services.
(h) Each franchisee shall, during the term of the
f~anchise, ensure that subscribers are able to rece
continuous service. In the event the franchise is revoked or
terminated, the franchisee may be required to continue to
provide s~rvice for a reasonable period of time to assure an
orderly transition of service from the franchisee to another
enti ty. A franchise may establish more particular
requirements under which these obligations will be
satisfied."
34
000530 syn 0071808
2.10 of
follows:
Section 2.10.275 is hereby added to Chapter
of the Palo Al to Municipal Code to read, as
"Section 2.10.275. Penalties
standards violations.
for customer service
(a) Each franchisee must satisfy FCC, California and
City cable customer service standards or consumer protection
standards. In the case of a conflict among standards, the
st cter standard shall apply.
(b) For ~iolaiion of cable customer service
standards, penalties will be imposed in accordance with the
administrati ve penalties provisions of the Palo Alto
Municipal Code, or, if none, as follows:
(1) $200 for each day of each material breach,
not to exceed $600 for each occurrence of material breach;
(2) If there is a subsequent material breach of
the same provision within twelve months, $400 for each day of
each material breach, not to exceed $1,200 for each
occurrence of the material breach; and
breach
first,
exceed
(3) If there is a third or additional material
of the same provision wi thin twelve months of the
$1,000 for each day of each material breach, not to
$3000 for each occurrence of the material breach.
(c) Any penalty assessed under this Section 2.10.275
will be reduced dollar-for-dollar to the extent any
liquidated damage provision of a franchisee's franchise
imposes a monetary obligation on that franchisee for the same
customer service failures, and no other monetary damages may
be assessed. The City will provide notice, and impose
penalties, under this section pursuant to the procedures
established by California Government Code § 53088.2(r)."
SECTION 25. Section 2.10.280 is hereby added to Chapter
2. 10 of Title 2 of the Palo Alto Municipal Code to read, as
follows:
"Section 2.10.280. Rate regulation.
(a) The City may regulate any of a franchisee's
rates and charges to the full extent permitted by law. The
City will regulate rates in accordance with FCC rules and
regulations, where applicable. Except to the extent FCC rules
provide otherwise, all rates and charges that are subject to
regulation, and changes in those rates or charges must be
approved in advance. The Cable Coordinator may take any
35
000530 syn 0071808
required steps to file complaints, toll rates, issue
accounting orders or take any other steps required to comply
with FCC regulations. The Council shall be responsible
issuing rate orders that establish rates or order refunds.
(b) Except to the extent the City may not enforce
such a requirement, a franchisee is prohibited from
discriminating in its rates, charges, services, or terms of
services, and from granting undue preferences to any
subscriber, potential subscriber, group of subscribers or
potential group of subscribers i provided, however, that a
franchisee may 0 temporary, bona fide promotional
discounts in order to attract or maintain subscribers, so
long as such discounts are offered on a non-discriminatory
basis to similar classes of subscribers throughout the
franchise areai and a franchisee may 0 discounts for the
elderly, the disabled, or the economically disadvantaged, and
such other discounts as it is expressly entitled to provide
under federal law, if such discounts are applied in a uniform
and consistent manner.
(c) A franchisee shall not deny access or charge
different rates to any group of subscribers or potential
subscribers because of the income of the residents of the
local area in which such group resides."
SECTION 26. Section 2.10.300 is hereby added to Chapter
2.10 of Title 20f the Palo Alto Municipal Code to read, as
follows:
"Section 2.10.300. Initial and renewal OVS applications.
(a) A written application for grant of an initial or
a renewal OVS franchise shall be filed with the City. To be
acceptable for filing, not less than an original of the
application shall be submitted together with two copies. The
application must conform to any applicable request for
proposals, and contain all information required under
Section 2.10.300(b). All applications shall include the
names and addresses individuals authorized to act on
behalf of the applicant with respect to the application.
(b) The Cable Coordinator may specify the
information that must be provided in connection with a
request for proposals or an application for an initial or a
renewal OVS franchise. At a minimum, each application must:
identify the applicant; show where it plans to construct s
system, and the system construction schedule; show that the
applicant will provide adequate channels, facilities and
other support for public, educational and governmental use
(including institutional network use) of the OVS; and show
36
000530 syn 0071808
that the applicant is financially, technically and legally
qualified to construct, operate, maintain and repair the OVS.
(c) A person may apply for an initial or a renewal
OVS franchise on its own initiative or in response to a
request for proposals.
(1) Upon receipt of an application the City
shall proffer the applicant a proposed OVS franchise, which
shall be mailed to the individual requesting s issuance and
made available to any other interested party. The City may
request such other information, as it deems appropriate.
(2) An applicant shall respond to requests for
information completely, and within the time directed by the
Cable Coordinator, and must strictly comply with procedures,
instructions, and requirements the City may establish.
(3) An application may be rej ected if it is
incomplete, if the response to requests for information is
not timely and complete, or the applicant fails to follow
procedures or respond fully to information requests.
(d) In evaluating an OVS franchise application, the
City may consider the following:
(1) The extent to which the applicant has
substantially complied with the applicable law and, in the
case of a renewal franchise application, the material terms
of any existing City OVS franchise;
(2) Whether the applicant has the financial,
technical, and legal qualifications to hold an OVS franchise;
(3) Whether the application satisfies any
minimum requirements estab shed by the City for, or will
provide otherwise, adequate public, educational, and
governmental use capacity, facil ies, or financial support
(including with respect to institutional networks);
(4) Whether the issuance of a franchise would
require replacement of property or involve disruption of
property, public services, or use of the public rights-of-
way; and
(5) Whether the approval of the application may
eliminate or reduce competition in the delivery of cable
service in the City.
(e) If the City finds that it is in the public
interest to issue. an OVS franchise considering the factors
above, and such other matters as it is required or entitled
37
. 000530 syn 0071808
to consider, and subj ect to the applicant's entry into an
appropriate OVS agreement, it shall issue a franchise. Prior
to deciding whether or not to issue a franchise, the City may
hold one or more public hearings or implement other
procedures under which comments from the public on an
application may be received.
(f) In order to be legally qualified:
(1) The applicant shall comply with the
provisions of this Chapter and applicable laws, and to comply
with such requirements of an OVS franchise as the City may.
lawfully require;
franchise,
franchise;
(2) The applicant must not hold a cable system
or have pending an application for a cable system
(3) The applicant must not have had any cable
system or OVS franchise validly revoked, (including any
appeals) by the City within three years preceding the
submission of the application;
(4) The applicant may not have had an
application . for an initial or a renewal cable system
franchise to the City denied on the ground that the applicant
failed to propose a cable system meeting the cable-related
needs and interests of the community (or, in the case of a
renewal franchise, denied on the ground that the franchisee
failed substantially to comply with the material terms of its
franchise), or as to which any challenges to such franchising
decision were finally resolved (including any appeals)
adversely to the applicant, within three years preceding the
submission of the application;
(5) The applicant may not have had an
application for an initial or a renewal OVS franchise denied
by the City on any grounds within three years of the filing
of the application;
(6) The applicant shall not be issued a
franchise if, at any time during the ten years preceding the
submission of the application, the applicant or any of s
officers or directors was convicted of. fraud, racketeering,
anticompetitive actions, unfair trade practices or other
conduct of such character that the applicant cannot be relied
upon to deal truthfully with the City and the subscribers, or
to substantially comply with its obligations;
(7) The applicant must have the necessary
authority under California and federal law to operate an OVS,
and must be certified by the FCC under 47 U.S.C. § 573; and
38
000530 syn 0071808
(8) The applicant shall not be issued a
franchise if files materially misleading information in
its application or intentionally withholds information that
the applicant lawfully is required to provide.
For purposes of Section 2.10.300(a) (2)-(5), the
term "applicant" includes any affiliate of the applicant.
(g) Notwithstanding Section 2.10.300(f), an
applicant shall be provided a reasonable opportunity to show
that a franchise should issue, even if the requirements of·
Section 2.10.300(a) (4)-(5) are not satisfied, by virtue of
the circumstances surrounding the matter and the steps taken
by the applicant to cure all harms flowing therefrom and
prevent their recurrence, the lack of involvement of the
applicant's principals, or the remoteness of the matter from
the operation of a cable s¥stem."
2.10 of
follows:
Section 2.10.310 is hereby added to Chapter
of the Palo Al to Municipal Code to read, as
"Section 2.10.310. OVS transfer application.
(a) No OVS trans shall occur without prior
written notice to and the approval of the Council.
(b) An OVS franchisee shall promptly notify the City
of any proposed transfer, and submit an application for its
approval.
(1) The Cable Coordinator may specify
information that must be provided in connection with a
transfer application. At a minimum, an application must:
describe the entities involved in the transaction and the
enti ty that will hold the franchise; describe the chain of
ownership before and after the proposed transaction; show
that the entity that will hold the franchise will be legally,
financially, and technically qualified to do· so; attach
complete information on the proposed transaction, including,
but not limited to, the contracts or other documents that
relate to .the proposed transaction, and all documents,
schedules, exhibits, or the Ii ke referred to therein; and
attach any shareholder reports or filings with the SEC that
discuss the transaction.
(2) For the purposes of determining whether it
shall consent to a transfer, the City or its agents may
inquire into all qualifications of the prospective transferee
and such other matters as the City may deem necessary to
determine whether the trans is in the public interest and
39
000530 syn 0071808
2.10
should be approved, denied, or conditioned. If the
transferee or OVS franchisee refuses to provide information,
or provides incomplete information, the request for transfer
may be denied.
(c) In deciding whether a transfer application
should be granted, denied or granted subject to conditions,
t.he City may consider: the legal, financial, and technical
qualifications of the transferee to operate theOVS; whether
the incumbent OVS franchisee is in compliance with its OVS
franchise and this Chapter and, if not, the proposed
transferee's commitment to cure such noncompliance within the
time required by applicable law; whether the transferee owns
or controls any other OVS or cable system in the City, and
whether operation by the transferee may eliminate or reduce
competition in the delivery of cable service in the City; and
whether operation by the transferee or approval of the
transfer would adversely affect the interests of subscribers,
the public, or the City under this Chapter, the OVS
franchise, or other applicable law.
(d) In order to obtain approval of a transfer, an
applicant must show, at a minimum, that: the transferee is
qualified; the transfer will not adversely affect the
interests of subscribers, the public, or the City; and
Chapter and franchise non-compliance issues have been
resolved. No application shall be granted unless the
trans ree agrees in writing that it will abide by and accept
all terms of this Chapter and the OVS franchise, and that. it
will assume the obligations, liabilities, and responsibility
for all acts and omissions, known and unknown, of the
previous franchisee for all purposes. The proposed
transferee shall pay 1 reasonable costs incurred by the
City in reviewing and evaluating the applications."
SECTION 28.
of T of
Section 2.10.320 is hereby added to Chapter
the Palo Alto Municipal Code to read, as
follows:
"Section '2.10.320. Minimum requirements.
(a) No OVS operator shall be issued a franchise, and
an OVS operator may not commence providing video services,
including video programming services, until it: (A) agrees to
match in all respects the highest PEG obligations borne by
any cable system franchisee in the City; or (B) agrees to PEG
obligations of a monetary value that is equivalent to the
highest PEG obligations borne by any cable system operator or
franchisee.
(b) Any OVS operator that constructs an
institutional network must match in all respects the highest
40
000530 syn 0071808
institutional network obligations borne by any cable system
operator or franchisee in the City, unless the OVS franchisee
agrees to an alternative institutional network equivalent to
the obligations ofa cable system operator or franchisee in
the City.
(c) Every OVS agreement shall specify the
construction schedule that will apply to any required
construction, upgrade, or rebuild of the OVS. The schedule
shall provide for prompt completion of the proj ect,
considering the amount and type of construction required.
(d) Each OVS franchisee shall perform at
such tests as may be necessary to show whether
franchisee is in compliance with its obligations
Chapter or an OVS franchise.
expense
or not the
under this
(e) Every OVS franchisee must satisfy FCC,
California and City ovs customer service standards or
consumer protection standards. In the case of a conflict
among standards, the stricter standard shall apply."
SECTION 29. Section 2.10.330 is hereby added to Chapter
2.10 of T·itle 2 of the Palo Alto Municipal Code to read, as
follows:
"Section 2.10.330. Special termination rules.
(a) If an OVS franchisee's FCC certification is
revoked or terminates otherwise as a result of the passage of
time or as a matter of law, the City may revoke the OVS
franchise after a hearing. The OVS franchise also may be
revoked if federal regulations or statutory provisions
governing OVS are declared invalid or unenforceable, or are
repealed. II
SECTION 30. Section 2.10.340 is hereby added to Chapter
2.10 of Title 2 of the Palo Al to Municipal Code to read, as
follows:
"Section 2.10.340. Rate regulation.
The City may regulate an OVS franchisee's rates and
charges to the full extent permitted by law, and may do so by
amendment to this Chapter, separate ordinance, by amendment
to an OVS franchise, or in any other lawful manner."
SECTION 31. Section 2.10.350 is hereby added to Chapter
2.10 of Title 2 of the Palo Alto Municipal Code to read, as
follows:
"Section 2.10.350. Fee in lieu of franchise fee.
41
000530 syn 0071808
(a) In lieu of the franchise fee required by Section
2.10.250, an OVS franchisee shall pay to the City a fee in an
amount equal to five percent of the gross revenues of the OVS
franchisee or its af liates, or such other amount as may be
specified in the franchise; provided, however, that if the
franchise specifies an amount, that amount shall be subject
to modification in the event federal limits on fee payments
are modified and other operators are subj ect to the same
modified fee.
(b) A person leasing capacity from an OVS operator
other than a person whose revenues are included in the
payment made under Section 2.10.350(a) shall pay the City a
fee in lieu of the franchise fee required by Section 2.10.250
of five percent of the gross revenues of such person.
(c) Notwithstanding the foregoing, where the OVS
franchisee charges a person other than an a liate, to use
its OVS (the "use payments"); and that person recovers those
use payments through charges to its subscribers that are
included in that person's gross revenues and that person
fu~ly recovers the use payments through the charges to its
subscribers and pays a fee on those charges pursuant to
Section 2.10.350(b) i then the OVSfranchisee may deduct fTom
its gross revenues the use payments it receives from that
person."
SECTION 32. Section 2.10.360 is hereby added to Chapter
2.10 of Title 2 of the Palo Al to Municipal Code to read, as
follows:
"Section 2.10.360. Exclusive contracts.
An OVS franchisee may not require a subscriber or a
building owner or manager to enter into an exclusive contract
as a condition of providing or continuing service, nor mayan
OVS franchisee enter into any arrangement that would
effectively prevent other persons from using the OVS to
compete in the delivery of cable services with a franchisee
or s affiliates."
SECTION 33. Section 2.10.400 is hereby added to Chapter
2.10 of Title 2 of the Palo Alto Municipal Code to read, as
follows:
"Section 2.10.400 Miscellaneous provisions.
(a) The captions to sections throughout this Chapter
are intended solely to facilitate reading and reference to
the sections and provisions of this Chapter. Such captions
42
000530 syn 0071808
shall not affect the meaning or interpretation of this
Chapter.
(b) Unless otherwise indicated, when the performance
or doing of any act, duty, matter, or payment is required
under this Chapter or any franchise, and a period of time or
duration for the fulfillment of doing thereof is prescribed
and is fixed herein, the time shall be computed so as to
exclude the rst and include the last day of the prescribed
or fixed period of time.
(c) If any term, condition, or provision of this
Chapter shall, to any extent, be held to be invalid or
unenforceable· by a valid order of any court or regulatory
agency of competent jurisdiction, the remainder hereof shall
be valid in all other respects and continue to be effective.
In the event of a subsequent change in applicable law that
renders valid the provision that had been held invalid, that
provision shall thereupon return to· full force and effect
w:i thout further action by the City and shall thereafter be
binding on the franchisee and the City.
(d) To the extent consistent with federal law,
subscribers shall have the right to attach videocassette
recorders, receivers, and other terminal equipment to a
franchisee I s cable system. Subscribers also shall have the
right to use their own remote control devices and converters,
and other similar equipment. A franchisee shall not, as a
condition of providing service, require a subscriber or
potential subscriber to remove any existing antenna, or
disconnect any antenna except at the express direction of the
subscrib~r or potential subscriber, or prohibit installation
of a new antenna, provided that such antenna is connected
with an appropriate device and complies with applicable law.
(e) A franchisee shall not discriminate among
persons or the City or take any retaliatory action against a
person or the ty because of that person's or the City's
exercise of any right it may have under federal, California,
or City law, nor may a franchisee require a person or the
City to waive such rights as a condition of taking service.
(f) A franchisee shall not refuse to employ,
discharge from employment, or discriminate against any person
in compensation or in terms, conditions, or privileges of
employment because of race, color, creed, national origin,
sex, age, disability, religion, ethnic background, or marital
status. A franchisee shall comply with all federal,
California, and local laws governing equal employment
opportunities, and hiring practices.
43
000530 syn 0071808
(g) The operator any system installed as of the
effecti ve date of this Chapter, for which a franchise is
required under this Chapter, shall have three months from the
effective date of this Chapter to file one or more
applications for a franchise. Any operator timely filing
such an application under this Section 2.10.400(g) shall not
be subject to a penalty i to have such a franchise
so long as such application remains pending; provided,
however, nothing herein shall any operator of a cable
communications system of any liability its failure to
obtain any permit or other authorization required under other
provisions of the Palo Alto Municipal Code, and nothing
herein shall prevent the City from requiring removal of any
facilities installed in violation of tne Palo Alto Municipal
Code.
(h) Any person holding an sting franchise for a
cable communications system as of the date this Chapter is
adopted may continue to operate under the sting franchise
to the conclusion of its present term (but not any renewal or
extension thereof) with respect to those activities expressly
authorized by the franchise; provided that, such person shall
be subject to the other provisions of this Chapter to the
full extent permitted by law.
(i) To the maximum extent permitted by law, pending
applications shall be subject to this Chapter. A person with
a pending" application shall have thirty days from the
effecti ve date of this Chapter to submit additional
information to comply with the requirements of this Chapter
governing applications.H
SECTION 34. Section 2.10.500 is hereby added to Chapter
2.10 of Title 2 of the Palo Alto Municipal Code to read, as
follows:
"Section 2.10.500. Customer service standards.
(a) The customer service standards applicable to
franchisees of cable communications systems are established
in Appendix A to this Chapter and are incorporated herein by
reference.
(b) The City Manager may modify by relaxing or
strengthening the customer service standards, or any part
thereof, and the modified customer service standards shall
take effect fourteen days after written not the same is
given by the City Manager to the Council.u
SECTION 35. If any section of this ordinance, or part
hereof, is held by a court of competent jurisdiction in a final
judicial action to be VGid, voidable or enforceable, such
44
000530 syn 0071808
section, or part hereof, sha be deemed severable from the
remaining sections of this ordinance and shall in no way affect
the validity of the remaining sections hereof.
SECTION 36. The City Council hereby finds that this
ordinance s exempt from the provisions of the California
Environmental Quality Act pursuant to Section 15061(b) (3) of the
California Environmental Quality Act Guidelines, because it can
be seen with certainty that there is no possibility of
significant environmental effects occurring as a result of the
adoption of this ordinance.
SECTION 37. This ordinance shall become effective upon
the commencement of the thirty-rst day after the date of its
adoption.
INTRODUCED: May 8, 2000
PASSED: May 22, 2000
AYES: BERN BEECHAM, JIM BURCH, SANDY EAKINS, GARY FAZZINO,
NANCY LYTLE, VICTOR OJAKIAN
NOES:
ABSTENTIONS:
NOT PARTICIPATING: DENA MOSSAR
ABSENT: JUDY KLEINBERG, LIZ KNISS
ATTEST:
;(d£.~
~.City Clerk
APPROVED AS TO FORM:
~
Senior Asst. City Attorney
TH IS DOCUMENT IS CERTIFIED TO BE AN
ORDINANCE DULY PASSED BY THE COUNCIL
Of 1'HE CITY OF PALO ALTO AND
n'f'::p~r~{-fFR POSTED IhlJHE COUNCIL CHM;~;:'RS ON Q;.:J. -00 (WITHIN 15
DAYS C( ITS PASSAGE)
"I GC'rtilv (or dec~crc) under penalty
0: pcrpy ,:lat ,he foregoing is true
and(~orrect" ~ c1;:lsiL-::~ ~ Dat~ 8. Place ature
45
0050530 syn 0071808
City Manager
~---
SECTION 1.
APPENDIX A TO CHAPTER 2.10 OF TITLE 2
OF THE PALO ALTO MUNICIPAL CODE
CUSTOMER SERVICE STANDARDS FOR
CABLE COMMUNICATIONS SYSTEMS FRANCHISEES
PROVIDING SERVICES TO PALO ALTO CUSTOMERS
Definitions
1.1 The definitions established under Chapter 2.10 of
T Ie 2 of the Palo Alto Municipal Code are incorporated herein
by reference and made a part of these customer service standards.
SECTION 2. Office Availability
2.1 Each franchisee will maintain an office at a
convenient location Palo Alto or, if outside of Palo Alto,
within a radius of five miles of the jurisdictional boundaries of
Palo Alto that will be open for walk-in traffic at least ten
hours per day (except legal holidays) Monday through Friday, with
some evening hours, and at least hours on Saturday to allow
subscribers to pay bills, drop equipment and to pick up
equipment, and interact otherwise with the franchisee on matters
related to service provided by the franchisee.
2.2 Each franchisee will perform service calls,
installations, and disconnections at least ten hours per day,
Monday through Saturday, except legal holidays. In addition, a
. franchisee will respond to service outages on a twenty-four hours
a day, seven days a week ("24/7 ") basis.
SECTION 3. Telephones
3.1 Each franchisee will establish a publicly listed
local toll-free telephone number. Customer service
representatives of a franchisee must answer the telephone at
least ten hours per day, Monday through Saturday, except legal
holidays, for the purpose of receiving requests for service,
inqu s, and complaints from subscribers. After regular
business hours, the telephone will be answered so those
subscribers can register complaints and report service problems
on a 24/7 basis, and so that the operator can respond to service
outages as required herein.
3.2 Telephone answering time will not exceed thirty
seconds or four consecutive rings, and the time to trans r the
46
000530 syn 0071808
call to a customer service representative (including hold time)
will not exceed an additional thirty (30) seconds.
3.3 Under normal operating conditions, subscribers
will receive a busy signal less than three percent of the time.
3.4 Under normal operating conditions, the standards
set out in Sections 3.2 -3.3 will be met ninety percent of the
time, measured on a quarterly basis.
SECTION 4. Scheduling Work
4.1 All appointments for service, installation, or
disconnection will be specified by date and time of day. Each
franchisee will specify a specific time at which the work will be
done, or offer a choice of time blocks, which will not exceed
four hours in length. A franchisee, upon request, may schedule
service installation calls outside of regular business hours, for
the express convenience of the subscriber.
4.2 If at any time an installer or technician is late
for an appointment and believes a scheduled appointment time will
be missed, an attempt to contact the subscriber will be made
before the time of appointment and the appointment shall be
rescheduled at a time convenient to the subscriber, if a
rescheduling is necessary. The franchisee shall bear the burden
of proving that it met the appointment.
4.3 The franchisee will offer and fully describe in
writing to subscribers who have experienced a missed appointment
(where the missed appointment was not the subscriber's fault)
that the subscriber may choose among the following options:
4.3.1 Installation or service call free of
charge, if the appointment was for an installation or service
call for which a fee was to be charged;
4.3.2 One month of the most widely subscribed-
to service tier free of charge for other appointments; and
4.3.3 An opportunity to elect remedies under
California Civil Code § 1722, if applicable.
47
000530 syn 0071808
SECTION 5. Service Standards
5.1 Under normal operating conditions, requests for
service, repair, and maintenance must be acknowledged by a
ned customer service representative within twenty-four hours,
or before the end of the next business day, whichever is ea r.
5.2 A franchisee will respond to all other inquiries
(including billing inquiries), wi thin five business days of the
inquiry or complaint.
5.3 Under normal operating conditions, repairs and
maintenance for outages or service interruptions must be
completed within twenty-four hours after the outage or
interruption becomes known to the franchisee where the franchisee
has adequate access to facilities to which it must have access in
order to remedy the problem.
5.4 Under normal operating conditions, work to correct
service problems must commence by the next business day
r notification of the service problem, and must be completed
within five bus ss days from the date of the initial request.
5.5 When normal operating conditions do not exist, a
franchisee will complete the work in the shortest time possible.
5.6 A franchisee wi not cancel a service or
installation appointment with a subscriber after the close of
business on the business day preceding the scheduled appointment.
5.7 Requests for additional outlets, service upgrades
or other connections (e.g., DMX, VCR, A-B switch) separate from
the initial inst lation will be performed within seven business
days after an order has been placed.
5.8 Under normal operating condi ons, the service
standards s.et out in Sections 5.1 -5. 7 will be met at least
ninety-five percent of the time, measured on a quarterly basis.
5.9 The failure of a franchisee to hire suf cient
staff or to properly train its staff will not excuse or justify a
franchisee's failure to comply with this provision.
SECTION 6. Disabled Services
6.1 With regard to subscribers with disabilities, upon
subscriber request, each franchisee will arrange for pickup
and/or replacement of converters or other operator equipment at
the subscriber's address or by a satisfactory equivalent (such as
the provision of a postage-prepaid mailer) .
SECTION 7. Notice to Subscribers regarding Service
48
000530 syn 0071808
7.1 A franchisee will provide each subscriber at the
time service is installed, and annually thereafter, clear and
accurate written information:
7.1.1 On placing a service call, filing a
complaint, or requesting an adj ustment (including when a
subscriber is entitled to refunds for outages and how to obtain
them) ;
7.1.2 Showing the telephone number of the
Cable Coordinator's of or other individual(s) responsible for
administering the cable television franchise and the open video
system franchise;
7.1.3 Providing a schedule of rates and
charges (which listing must identify any discounts offered),
channel positions, services provided, a copy of the service
contract, delinquent subscriber disconnection and reconnect ion
procedures; notifying subscribers of the availability of parental
control devices, and the conditions under which they will be
provided and the cost (if any) charged;
7.1.4 Describing conditions that must be met
to qualify for discounts;
7.1.5 Describing any other of the franchisee's
policies in connection with s subscribers; and
7.1.6 Describing any discounts, services, or
specialized equipment available to subscribers with disabil ;
explaining how to obtain them; and explaining how to use any
accessibility features.
SECTION 8. Notices to City
8.1 Each franchisee will provide the City with copies
of I notices provided to its subscribers as required by these
standards.
SECTION 9. Changes in Noticed Information
9.1 Each franchisee will provide the Cable Coordinator
at least sixty days' advance written notice (and all subscribers
at least thirty days' advance written notice) of any material
changes in the information required to be provided under these
standards, except that, if federal law establishes a shorter
notice period and preempts this requirement, the federal law
requirement will apply.
49
000530 syn 0071808
SECTON 10. Truth in Advertisinq
10.1 Each franchisee will take appropriate steps to
ensure that all . of its written promotional mate Is,
announcements, and advertising of residential cable service and
open video system service, as applicable, to subscribers and the
general public, where price information is listed in any manner,
clearly and accurately disclose price terms. In the case of
telephone orders, a franchisee will take appropriate steps to
ensure that price terms are cl and accurately disclosed to
potent 1 subscribers in advance of the taking of the order.
10.2 Each franchisee will maintain a file open for
public inspection containing all notices provided to subscribers
under these standards, as well as all promotional offers made to
subscribers. The notices and 0 rs will be kept on fi for at
least one year from the date such notice or promotional offer is
announced to the subscribers and the general public.
SECTION 11. Interruptions in Service
11.1 Each franchisee will provide forty-eight hours'
prior notice to subscribers and the Cable Coordinator before
interrupting service for planned maintenance or construction;
provided, however, that planned maintenance that does not require
more than two hours' interruption of service and that occurs
between the hours of 12:00 midnight and 6:00 a.m. will not
require such notice to subscribers, and written notice to the
Cab Coordinator must be given not less than twenty-four hours
before the anticipated service interruption.
SECTION 12. Prorated Billinq
12.1 A franchisee's rst billing statement after a new
tallation or service change will be prorated, as appropriate,
and will reflect a credit any security deposit posted by a
subscriber.
SECTION 13. Billinq Statement
13.1 A franchisee's billing statement must be clear,
concise, and understandable; must itemize each category of
service and equipment provided to the subscriber; and must state
early the charges there
speci
13.2 A franchisee's billing statement
payment due date not earlier than the
must
of:
show a
13.2.1
statement is mailed; or
Fifteen days after the date the
50
000530 syn 0071808
13.2.2 The tenth day of the service period for
which the bill is rendered.
13.3 A late fee or administrative fee (collectively
referred to below as a "late fee") may not be imposed except in
accordance with California Government Code §§ 53088.6, 53088.7
and 53088.8.
13.4 A franchisee's bill must permit a subscriber to
remi t payment by mail or in person at the franchisee's local
office.
SECTION 14. Credit for Service Impair.ment
14.1 Upon a subscriber's request, a subscriber's
account will be credited a prorated share of the monthly charge
for the service if a subscriber is without s~rvice or if service
is substantially impaired for any reason for a period exceeding
four hours during any twenty-four-hour period. A subscriber's
account will be automatically so credited~ without the need for a
subscriber's request, if the loss of service or impairment is for
twen'ty-four hours or longer.
14.2 A franchisee is not required to credit a
subscriber's account where the franchisee establishes that
subscriber's loss of service or impairment was caused by
subscriber or by subscriber-owned equipment (not including,
purposes of this Section, in-home wiring installed by
operator) .
SECTION 15. Billing Complaints
the
the
for
the
15.1 Each franchisee will respond to all written
billing complaints from subscribers within thirty days of their
receipts.
SECTION 16. Billing Refunds
16.1 Refunds to subscribers will be issued no later
than:
16.1.1 The earlier of the subscriber's next
billing cycle following a resolution' of the refund request, or
thirty days; or
16.1.2 The date of return of all equipment to
the franchisee, if cable service or open video system service, as
applicable, has been terminated.
51
000530 syn 0071808
SECTION 17. Credits for Cable Service
j
17.1 Credits for cable se ce or open video system
service, as applicable, will be issued no later than the
subscriber's next billing cycle after t determination that the
credit is warranted.
SECTION 18. Disconnection and Downgrades
18.1 A subscriber may terminate service at any time.
18.2 A franchisee will promptly disconnect from its
cable system or open video system, as applicable, or downgrade
the service of, any subscriber who so requests. No charges for
service may be made a the subscriber requests disconnection.
No period of notice before voluntary termination or downgrade of
service may be required of subscribers by any franchisee. There
will be no charge for disconnection, except for the collection
fee authorized by California law, and any downgrade charges will
conform to applicable law.
SECTION 19. Security Deposit
19.1 Any security deposit and/or other funds due a
subscriber who disconnects or downgrades service will be returned
to the subscriber within thirty days or in the next billing
cycle, whichever is later, from the date that a disconnection or
a downgrade was requested; provided, however, where the
subscriber does not permit the franchisee to recover its
equipment, the amounts owed will be paid to the subscriber within
thirty days of the date the equipment was recovered, or in the
next billing cycle, whichever is later.
SECTION 20. Disconnection due to Nonpayment
20.1 A franchisee may not disconnect
cable service or open video system service, as
non-payment unless:
a subscriber's
applicable, for
20.1.1 The subscriber is delinquent in payment
for cable service or open video system service, as applicable;
20.1.2 A separate, written notice of impending
disconnection, postage prepaid, has been sent to the subscriber
at least twenty days before the date on which service may be
disconnected, at the premises where the subscriber requests
billing, which notice must identify the names and address of the
subscriber whose account is delinquent, state the date by which
disconnection may occur if payment is .not made, and the amount
the subscriber must pay to avoid disconnection, and a telephone
number a representative of the franchisee who can provide
52
000530 syn 0071808
additional information, and handle complaints or initiate an
investigation, concerning the services and charges in question;
20.1.3 The subscriber fails to pay the amounts
owed to avoid disconnection by the date of disconnection; and
20~1.4 No pending inquiry or dispute exists
regarding the bill to which the franchisee has not responded
writing.
20.2 If the subscriber pays all amounts due, including
late charges, before the date scheduled for disconnection, the
franchisee will not disconnect service. Service may only be
terminated on days in which the subscriber can reach a
representative of the franchisee either in person or by
telephone.
20.3 After disconnection (except as noted below), upon
payment by the subscriber in full of all proper fees or charges,
including the payment the reconnect ion fee, if any, the
franchisee will promptly reinstate service.
SECTION 21. Immediate Disconnection
21.1 A
subscriber if:
franchisee may immediately disconnect a
21.1.1 The subscriber is damaging, destroying,
or unlawfully tampering with or has damaged or destroyed or
unlawfully tampered with the franchisee's cable system or open
video system;
21.1.2 The subscriber is not authorized to
receive a service, or is facil ing, aiding or abetting the
unauthorized receipt of service by others; or
21.1.3 Subscriber-installed or attached
equipment is resulting in signal leakage that is in violation of
FCC rules.
21.2 After disconnection, the franchisee will restore
service after the subscriber provides adequate assurance that it
has ceased the practices that led to disconnection, and paid all
proper fees and charges, including any reconnection fees and all
amounts owed the franchisee for damage to its cable
communications system or equipment. No reconnection fee may be
imposed on a subscriber that is disconnected pursuant to these
standards if the leakage was the result of the franchisee's acts
or omissions or, in any case, unless the franchisee notifies the
subscriber of the leakage at least three business days in advance
of disconnection, and the subscriber has failed to correct the
leakage within that time.
53
SECTION 22. Franchisee's Property
22.1 Except as applicable law may ptovide otherwise, a
franchisee may remove its property from a subscriber's premises
within thirty days of the termination of service. If a
franchisee fails to remove its property in that period, the
property will be deemed abandoned, unless the franchisee has been
denied access to the subscriber's premises, or the franchisee has
a continuing right to occupy the premises under applicable law.
SECTION 23. Deposits
23.1 A franchisee may require a reasonable, non-
discriminatory depos on equipment provided. to subscribers.
Deposits will be placed in an interest-bearing account, and the
franchisee will return the deposit, plus interest earned to the
date the deposit is returned to the subscriber, less any amount
the franchisee can demonstrate should be deducted for damage to
such equipment.
SECTION 24. Parental Control Option
24.1 Without limiting a franchisee's obligations under
federal law, after March 1, 1999, a franchisee must provide
parental control devices to all subscribers who request them that
enable the subscriber to block the video and audio portion of any
channel or channels of programming.
SECTION 25. Penalties
25.1 Pursuant to California Government Code §
53088.2(q), as may be amended from time to time, penalties will
be assessed against a franchisee for any breach of these customer
service standardi.
SECTION 26. Internet and. Cable Modem Service Standards
26.1 Any cable system franchisee, OVS franchisee, or
other franchised provider of high-speed Internet access service
shall be subject to the following:
26.1.1 All subscribers. shall be entitled to a
minimum upstream channel transfer rate of at least 128 kilobits
per second at least eighty-five percent of the time, as
practicable, within any hour of operation;
26.1.2 The usage of the system shall be
measured at the hub and nodes, and, as practicable, at the
customers' residences, and written reports of such usage shall be
54
000530 syn 0071808
provided to the Cable Coordinator at least once a month, or as
more or ss often as the Cable Coordinator shall. reasonably
require.
26.1.3 In the event that the average upstream
throughput· between 7: 00 a.m. and 10: 00 p.m. over a seven-day
period, Monday through Sunday, exceeds twenty-five percent of
capacity, or there are five or more instances in a single seven-
day period in which the throughput reaches full capacity, the
franchisee shall install without charge to the subscribers
additional capacity, segment nodes to serve a smaller number of
subscribers, or take such other measures deemed reasonable by the
Cable Coordinator as will ensure that the subscribers receive the
minimum level of service provided under the provisions of this
Section 26.1.
SECTION 27. Miscellaneous
27.1 Notwithstanding the requirements
standards, the Cable Coordinator is authorized to
franchisee of its obligations hereunder if:
of these
relieve a
27.1.1 A franchisee shows that there is an
alternative standard that is substantially similar to that
established by this Appendix A;
27.1.2 The Council determines that there is
sufficient competition among cable communications system
operators, including any franchisee, in Palo Alto that renders
application of these standards unnecessary; or
27.1.3 In light of the number of subscribers
served by a franchisee, the requirements of this Appendix A are,
in the Council's determination, unduly burdensome and there is an
alternative way to serve the same interest.
55
000530 syn 0071808