(A) Permit fee.
(1) (a) During the term of this permit, the cable operator shall pay to the City a fee equal to five percent (5%) of:
1. The gross revenues that the cable operator and its affiliates collected from each subscriber for the cable operator’s cable services during the applicable calendar quarter; and
2. The advertising revenues collected by the cable operator as further described in subsection (A)(2)(g) below (collectively, the “permit fee”).
(b) The portion of the permit fee described in subsection (A)(1)(a)1. above may be identified and passed through on any subscriber bill by the cable operator, and all such fees collected will be forwarded to the City quarterly and shall be due 45 days after the end of each calendar quarter. The cable operator and the City agree that the permit fee shall be in lieu of all other concessions, charges, excises, franchise, license, privilege, permit fees, taxes or assessments except sales taxes, personal or real property taxes and ad valorem taxes.
(2) For purposes of this permit, gross revenues are limited to the following:
(a) Recurring charges for cable services;
(b) Event-based charges for cable services, including, but not limited to, pay-per-view and video-on-demand charges;
(c) Rental of set top boxes and other cable services equipment;
(d) Service charges related to the provision of cable services, including, but not limited to, activation, installation and repair;
(e) Administrative charges related to the provision of cable services, including, but not limited to, service order and service termination charges;
(f) Amounts billed to cable services subscribers to recover the permit fee authorized by this section; and
(g) A pro rata portion of all revenue collected by the cable operator pursuant to compensation arrangements for advertising (less any commissions the cable operator receives from any third parties for advertising) and home-shopping sales derived from the operation of the cable operator’s cable system within the service area. Advertising commissions paid to third parties (excluding any refunds, rebates or discounts the cable operator may make to advertisers) shall not be deducted from advertising revenue included in gross revenue. The allocation of advertising and home-shopping revenue referred to above shall be based on the number of subscribers in the City divided by the total number of subscribers in relation to the relevant regional or national compensation arrangement.
(3) For purposes of this permit, gross revenues do not include:
(a) Uncollectible fees; provided that all or part of uncollectible fees which is written off as bad debt but subsequently collected, less expenses of collection, shall be included in gross revenues in the period collected;
(b) Late payment fees;
(c) Revenues from contracts for in-home maintenance service unless they relate solely to maintenance on equipment used only for the provisioning of cable services and not for the provisioning of any other service provided by the cable operator or its affiliates;
(d) Amounts billed to cable services subscribers to recover taxes, fees or surcharges imposed upon cable services subscribers in connection with the provision of cable services, other than the permit fee authorized by this section;
(e) Revenue from the sale of capital assets or surplus equipment; or
(f) Charges, other than those described in subsection (A)(1) above, that are aggregated or bundled with amounts billed to cable services subscribers.
(4) In the event that any other video services provider, including, but not limited to, a cable operator or open video service provider, enters into any agreement or makes any arrangement with the City during the term of this permit whereby it is required or allowed to pay a fee to the City that is similar to the permit fee described herein, this permit shall be amended to allow the cable operator to substitute the definition of “gross revenue” set forth in that agreement or arrangement for the definition of “gross revenue” set forth in this permit immediately upon request of the cable operator.
(B) Bundling discount. Bundling discounts shall be apportioned fairly among video and other services. The cable operator shall not apportion revenue in such a manner as to avoid the permit fee.
(C) Exclusion. The permit fee shall not apply to Internet access or Internet-based telephone services offered by the cable operator. If the FCC or any other federal or state governmental authority with jurisdiction to do so authorizes the collection of such a fee during the term of this permit, then the cable operator shall, upon reasonable notice of the imposition of such a fee by the City that applies equally to all Internet access or Internet-based telephone service providers within the service area, commence remittance of a fee in the amount of not more than five percent (5%) of the gross revenues collected from the sale of such Internet access or Internet-based telephone services during the remaining term of this permit; provided that the City and the cable operator agree to the specific amount in a permit amendment. This exclusion shall not apply to the payment of statutory “911” fees; such fees shall be collected and remitted by the cable operator beginning the effective date of this permit as required by applicable law.
(Ord. 2023-12, passed 9-19-2023)