A. Franchise purposes. A franchise granted by the city under the provisions of this Article II may authorize the grantee to do the following:
1. To engage in the business of providing cable television services that are authorized by law and that the grantee elects to provide to its subscribers within the designated franchise service area;
2. To erect, install, construct, repair, rebuild, reconstruct, replace, maintain and retain cable lines, related electronic equipment, supporting structures, appurtenances, and other property in connection with the operation of the cable system in, on, over, under, upon, along and across streets and public rights-of-way within the designated franchise service area; and
3. To maintain and operate the franchise properties for the origination, reception, transmission, amplification, and distribution of television and radio signals, and for the delivery of cable services and such other services as may be authorized by law.
B. Franchise required. It is unlawful for any person to construct, install, or operate a cable television system within any street or public way in the city without first obtaining a franchise under the provisions of this Article II.
C. Term of the franchise.
1. A franchise granted under this Article II will be for the term specified in the franchise agreement, commencing upon the effective date of the resolution adopted by the City Council that authorizes the franchise.
2. A franchise granted under this Article II may be renewed upon application by the grantee in accordance with the then-applicable provisions of state and federal law and this Article II.
D. Franchise service area. A franchise is effective within the territorial limits of the city, and within any area added to the city during the term of the franchise, unless otherwise specified in the resolution granting the franchise or in the franchise agreement.
E. Federal or state jurisdiction. This Article II will be construed in a manner consistent with all applicable federal and state laws, and it applies to all franchises granted or renewed after the effective date of this chapter, to the extent authorized by applicable law.
F. Franchise non-transferable.
1. Grantee may not sell, transfer, lease, assign, sublet, or dispose of, in whole or in part, either by forced or involuntary sale, or by ordinary sale, contract, consolidation, or otherwise, the franchise or any of the rights or privileges therein granted, without the prior written consent of the City Council, which consent may not be unreasonably denied or delayed. Any attempt to sell, transfer, lease, assign, or otherwise dispose of the franchise without the written consent of the City Council is null and void. The granting of a security interest in any assets of the grantee, or any mortgage or other hypothecation, will not be deemed a transfer for the purposes of this paragraph F. A transfer to a person or entity owned or controlled by or under common ownership or control of grantee shall not be deemed a transfer for the purposes of this subparagraph F.1.
2. The requirements of subparagraph F.1. apply to any change in control of grantee. The word “control” as used herein is not limited to the ownership of major stockholder or partnership interests, but includes actual working control in whatever manner exercised. If grantee is a partnership or a corporation, prior authorization of the City Council is required where ownership or control of twenty-five percent (25%) or more of the partnership interests or of the voting stock of grantee, or any company in the tier of companies controlling the grantee, whether directly or indirectly, is acquired by a person or a group of persons acting in concert, none of whom, individually or collectively, owns or controls those partnership interests or that voting stock of the grantee, or grantee’s upper tier of controlling companies, as of the effective date of the franchise.
3. Unless precluded by federal law, grantee must give prior written notice to the city of any proposed foreclosure or judicial sale of all or a substantial part of the grantee’s franchise property. That notification will be considered by the city as notice that a change in control of ownership of the franchise will take place, and the provisions of this paragraph that require the prior written consent of the City Council to that change in control of ownership will apply.
4. For the purpose of determining whether it will consent to an acquisition, transfer, or change in control, the city may inquire about the qualifications of the prospective transferee or controlling party, and grantee must assist the city in that inquiry. In seeking the city’s consent to any change of ownership or control, grantee or the proposed transferee, or both, must complete Federal Communications Commission Form 394 or its equivalent. This application must be submitted to the city not less than one hundred twenty (120) days prior to the proposed date of transfer. The transferee must establish that it possesses the legal, financial, and technical capability to remedy all then-existing defaults and deficiencies, and, during the remaining term of the franchise, to operate and maintain the cable system and to comply with all franchise requirements. If the legal, financial, and technical qualifications of the proposed transferee are determined to be satisfactory, then the city will consent to the transfer of the franchise.
5. Any financial institution holding a pledge of the grantee’s assets to secure the advance of money for the construction or operation of the franchise property has the right to notify the city that it, or a designee satisfactory to the city, will take control of and operate the cable television system upon grantee’s default in its financial obligations. Further, that financial institution must also submit a plan for such operation within ninety (90) days after assuming control. The plan must ensure continued service and compliance with all franchise requirements during the period that the financial institution will exercise control over the system. The financial institution may not exercise control over the system for a period exceeding one (1) year unless authorized by the city, in its sole discretion, and during that period of time it will have the right to petition the city to transfer the franchise to another grantee.
6. Unless prohibited by applicable law, grantee must reimburse the city for the city’s reasonable review and processing expenses incurred in connection with any transfer or change in control of the franchise. These expenses may include, without limitation, costs of administrative review, financial, legal, and technical evaluation of the proposed transferee, consultants (including technical and legal experts and all costs incurred by these experts), notice and publication costs, and document preparation expenses. The total amount of these reimbursable expenses may be subject to maximum limits that are specified in the franchise agreement between the city and the grantee. No reimbursement may be offset against any franchise fee payable to the city during the term of the franchise.
G. Geographical coverage.
1. Unless otherwise provided in the franchise agreement, grantee must design, construct, and maintain the cable television system to have the capability to pass every dwelling unit and commercial building in the franchise service area, subject to any service-area line extension requirements or territorial restrictions set forth in the franchise agreement.
2. After service has been established by activating trunk or distribution cables for any service area, grantee must provide standard installations to any requesting subscriber within that activated part of the service area within seven (7) days from the date of request, or such longer time as may be requested by the subscriber, provided that the grantee is able to secure on reasonable terms and conditions all rights- of-way and permits necessary to extend service to that subscriber within that period. Standard installations are defined as installations that are located up to one hundred twenty-five (125) feet from the existing distribution system and do not require trenching to serve.
H. Nonexclusive franchise. Every franchise granted is nonexclusive. The city specifically reserves the right to grant, at any time, such additional franchises for a cable television system that it deems appropriate, subject to applicable state and federal law. If an additional franchise is proposed to be granted to a subsequent grantee, a noticed public hearing must first be held if required by the provisions of Cal. Gov’t Code § 53066.3.
I. Multiple franchises.
1. The city may grant any number of franchises, subject to applicable state and federal law. The city may limit the number of franchises granted, based upon, but not necessarily limited to, the requirements of applicable law and the following specific local considerations:
a. The capacity of the public rights- of-way to accommodate multiple cables in addition to the cables, conduits, and pipes of the existing utility systems, such as electrical power, telephone, gas, and sewerage.
b. The benefits that may accrue to subscribers as a result of cable system competition, such as lower rates and improved service.
c. The disadvantages that may result from cable system competition, such as the requirement for multiple pedestals on residents’ property, and the disruption arising from numerous excavations within the public rights-of-way.
2. The city may require that any new grantee be responsible for its own underground trenching and the associated costs if, in the city’s opinion, the rights-of-way in any particular area cannot reasonably accommodate additional cables.
(Ord. 1082, passed 11-16-04)