Sec. 8A-4. Grant of authority; franchise required.

*Editor's note--Section 1 of FY 1991 L.M.C., ch. 3, amended ch. 8A to read as set out in §§ 8A-1-8A- 32. The chapter formerly consisted of §§ 8A-1-8A-22 and was derived from the following: 1981 L.M.C., ch. 9, § 1; 1982 L.M.C., ch. 20, §§ 1-6; 1983 L.M.C., ch. 22, § 13, and ch. 47, §§ 1-13; and 1984 L.M.C., ch. 24, § 11, and ch. 27, § 10. Section 2 stated that the act superseded Executive Reg. No. 20-83, with the chairmanship of the former advisory committee determined as of the effective date of this act. Section 3 made the act applicable to existing franchises. Section 4 authorized amendment of the articles of incorporation or bylaws of Montgomery Community Television, Inc., without County approval, subject to § 8A-32.

Sec. 8A-1. Title.

This Chapter is known and may be cited as the "Cable Communications Law." (FY 1991 L.M.C., ch. 3, § 1.)

Sec. 8A-2. Intent and purposes.

It is the intent of the County to promote the public health, safety and general welfare by providing for the grant of one or more franchises for the construction and operation of a cable system; to provide for the regulation of each cable system by the County in accordance with federal and state law; to provide for the payment of fees and other valuable consideration by a franchisee to the County for the privilege of using the public rights-of- way for constructing and operating a cable system; to promote the widespread availability of cable and other communications service to County residents and businesses wherever economically feasible, including to those who reside in multifamily buildings and in rural communities; to encourage the development of cable as a means of communication between and among the members of the public and public institutions; and to encourage the provision of diverse information to the community over cable. (FY 1991 L.M.C., ch. 3, § 1; 2002 L.M.C., ch. 31, § 1; 2005 L.M.C., ch. 14, § 2; 2006 L.M.C., ch. 34, § 1.)

Editor’s note—2006 L.M.C., ch. 34, § 3, repeals 2002 L.M.C., ch. 31, § 4, as amended by 2005 L.M.C., ch. 14, § 2.

2005 L.M.C., ch. 14, § 2, amends 2002 L.M.C., ch. 31, § 4, as follows: Expiration date. This act expires on December 31, 2008.

2002 L.M.C., ch. 31, §§ 2, 3 and 4, state:

Sec. 2. Service-level requirements for cable modem service. The County Executive must issue regulations under method (2) establishing minimum cable modem service levels that a franchisee must provide. The regulations supersede any less-stringent requirements in a franchise or subscriber agreement.

Sec. 3. Transition.

(a) This Act applies to each current or future franchise, franchisee, subscriber, or other person subject to the requirements of the County Cable Communications Act, as amended by this and any future Act, and supersedes any contrary regulation, franchise, franchise agreement, subscriber agreement, or other agreement. The complaint adjudication provisions in Chapter 8A of the Code, as amended by this Act, apply to any complaint pending on, or filed on or after, the date this Act takes effect [March 6, 2003]. Section 8A-31A(i) applies to any subscriber agreement modified or entered into after this Act becomes law [December 5, 2002].

(b) The County Executive must designate the initial term of 2 members of the Cable Compliance Commission as 2 years. Any later term of these 2 members, and the terms of all other members, mut be 3 years.

Sec. 4. Expiration date. This Act expires on December 31, 2005.

Sec. 8A-3. Definitions.

In this Chapter, the following words and phrases have the meanings indicated in this Section. Words defined in Section 602 of the Cable Act have the meaning stated in the Cable Act unless this Section provides a different definition.

Access channel means any channel set aside under the franchise agreement for public use, educational use, or governmental use without a charge by the franchisee for channel usage. An access channel may be scheduled on a professional basis or may be operated so that any member of the general public may cablecast.

Application means a proposal to construct and operate a cable system within the County, transfer a franchise, renew a franchise, or modify a franchise. An application includes the initial proposal plus all subsequent amendments or supplements to the proposal and relevant correspondence.

Cable Act means the Cable Communications Policy Act of 1984, 47 U.S.C. §§ 521 et seq.

Cable system means a facility, consisting of a set of closed transmission paths and associated signal generation, reception, and control equipment that is designated to provide cable service which includes video programming and which is provided to multiple subscribers within the County. This term does not include:

(1) a facility that serves only to retransmit the television signals of one or more television broadcast stations;

(2) a facility that serves subscribers without using any public right-of-way;

(3) a facility of a common carrier that is subject, in whole or in part, to the provisions of Title II of the Communications Act of 1934, except that the facility will be considered a cable system to the extent that it 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;

(4) an open video system that complies with federal law; or

(5) any facilities of any electric utility used solely for operating its electric utility systems.

Cable service means the one-way transmission of video or other programming service to subscribers and any subscriber interaction provided in connection with that service.

Commission means the Cable Compliance Commission.

Community media organization means a nonprofit corporation that provides services to:

(1) support the production of local programming or the operation of local access channels, or both;

(2) serve viewers as well as program producers; and

(3) promote high quality productions, responsible and diverse points of view, and balance in subject matters.

Complaint means a complaint related to the provision of cable service.

Control of a franchisee or applicant means the legal or practical ability to exert actual working control over the affairs of the franchisee or applicant either directly or indirectly, whether by contractual agreement, majority ownership of an interest, any lesser ownership interest, or in any other manner.

County means Montgomery County, Maryland, except for the territory located in the municipalities of Barnesville, Brookville, Chevy Chase Village, Chevy Chase Section 3, The Town of Chevy Chase, Chevy Chase Section 5, Gaithersburg, Garrett Park, Glen Echo, Kensington, Laytonsville, Poolesville, Rockville, Somerset, Takoma Park, and Washington Grove.

Council means the County Council.

County Executive means the chief executive officer of the County or designee.

Fair market value means the price that a willing buyer would pay to a willing seller for a going concern based on the system valuation prevailing in the industry at the time but with no value allocated to the franchise itself.

FCC means the Federal Communications Commission.

Franchise means the right granted by the County to a franchisee to construct, maintain and operate a cable system over, on, or under streets, roads and all other public ways, easements and rights-of-way within all or specified areas of the County. The term does not include any license or permit that may be required by this Chapter or other laws, ordinances, or regulations of the County for the privilege of transacting and carrying on a business within the County or for disturbing the surface of any street or public thoroughfare.

Franchise agreement means an agreement entered into in accordance with the provisions of this Chapter between the County and a franchisee that sets forth the terms and conditions under which the franchise will be exercised.

Franchisee means any person granted a franchise under this Chapter.

Gross revenues means all of a cable operator’s revenues derived from the operation of the cable system to provide cable services.

Leased access channel means a channel designated in accordance with Section 612 of the Cable Act, for commercial use by persons unaffiliated with the franchisee.

Overbuild means a cable system constructed to serve any subscribers served by an existing cable system, including those parts of an existing system that will be constructed and activated by December 31, 1989 pursuant to a staging map filed with the County.

Participating municipality is a municipality that enters into an agreement with the County under which the County will administer a cable franchise granted by the municipality.

Person means any individual, corporation, partnership, association, joint venture, or organization of any kind and the lawful trustee, successor, assignee, transferee, or personal representative thereof.

Subscriber means the County or any person who is lawfully receiving, for any purpose or reason, any cable service, whether or not a fee is paid for that service.

System malfunction means an equipment or facility failure that results in the loss of satisfactory service on one or more channels. A malfunction is a major malfunction if it affects 11 or more subscribers.

Transfer of a franchise means any transaction in which:

(1) an ownership or other interest in a franchisee is transferred, directly or indirectly, from one person or group of persons to another person or group of persons so that control of the franchisee is transferred; or

(2) the rights held by the franchisee under a franchise agreement are transferred or assigned to another person or group of persons.

(3) The following transactions do not constitute a transfer of a franchise:

(A) A transaction among or between affiliates if:

(i) the initial franchisee provides an unconditional guarantee of performance by the new franchisee in a form acceptable to the County before the transaction closes;

(ii) the transferee agrees, in writing, before the transaction closes, that it will abide by and accept all terms of the franchise agreement and this Chapter, and that it will assume the obligations, liabilities, and responsibility for all acts and omissions, known and unknown, of the previous franchisee under the franchise agreement and this Chapter for all purposes, including renewal;

(iii) the initial franchisee has no uncured defaults from the time of the notice through the date of closing of the transaction; and,

(iv) the initial franchisee has provided the County at least 90 days notice and has responded completely to all information requests from the County;

(B) A sale of ownership or other interest in an entity controlling a franchisee, either directly or indirectly, if the successor controlling entity commits in writing that it will not take any action to impede the franchisee from satisfying all obligations under the franchise agreement, including but not limited to completing a system build-out;

(C) A transfer in trust, by mortgage, by other hypothecation, or by assignment, of any right, title, or interest of a franchisee in the franchise or cable system in order to secure indebtedness.

Transfer of interest in a franchisee means the sale or transfer, directly or indirectly, of an existing or newly created equity interest in the franchisee that does not result in a transfer of control of the franchisee. The following transactions do not constitute a transfer of an interest if the Executive or a designee finds that the franchisee has responded completely to all information requests from the County:

(1) A transaction among or between affiliates;

(2) A sale of ownership, or other interest, in an entity controlling the franchisee, either directly or indirectly; or,

(3) A transfer in trust, by mortgage, by other hypothecation, or by assignment, of any right, title, or interest of the franchisee in the franchise or cable system in order to secure indebtedness.

User means a person utilizing a cable system's facilities for purposes of transmission of material or information to subscribers or others. (FY 1991 L.M.C., ch. 3, § 1; 1998 L.M.C., ch. 10, § 1; 2002 L.M.C., ch. 31, § 1; 2005 L.M.C., ch. 14, § 2; 2006 L.M.C., ch. 34, § 1; 2014 L.M.C., ch. 23, § 1.)

Editor’s note—2006 L.M.C., ch. 34, § 3, repeals 2002 L.M.C., ch. 31, § 4, as amended by 2005 L.M.C., ch. 14, § 2.

2005 L.M.C., ch. 14, § 2, amends 2002 L.M.C., ch. 31, § 4, as follows: Expiration date. This act expires on December 31, 2008.

2002 L.M.C., ch. 31, §§ 2, 3 and 4, state:

Sec. 3. Transition.

Sec. 4. Expiration date. This Act expires on December 31, 2005.

Sec. 8A-4. Grant of authority; franchise required.

The County may grant one or more franchises in accordance with this Chapter. A person must not construct or operate a cable system in the County without a franchise granted by the County. (FY 1991 L.M.C., ch. 3, § 1.)

Sec. 8A-5. Franchise characteristics.

(a) A franchise authorizes use of the public rights-of-way for installing cables, wires, lines, and other facilities to operate a cable system, but does not expressly or implicitly authorize the franchisee to provide service to, or install cables, wires, lines, or any other equipment or facilities private property without owner consent (except for use of compatible easements or rights-of-way under the Cable Act), or to use publicly or privately owned utility poles or conduits without a separate agreement with the owners.

(b) A franchise is subject to the paramount right of use by the County and the public for public purposes. The County reserves the right to authorize use of public rights-of-way to other persons as it determines appropriate.

(c) A franchise is nonexclusive and does not expressly or implicitly preclude the issuance of other franchises to operate cable systems within the County.

(d) A franchise does not convey a property right to the franchisee or a right to renewal other than as may be required by state or federal law.

(e) A franchise agreement constitutes a contract between the franchisee and the County once it is accepted by the franchisee. A franchisee contractually commits itself to comply with the terms, conditions and provisions of the franchise agreement and with all applicable laws, ordinances, codes, rules, regulations, and orders. (FY 1991 L.M.C., ch. 3, § 1.)

Sec. 8A-6. Franchisee subject to other laws, police power.

(a) A franchisee is subject to and must comply with all applicable local, municipal, County, state and federal laws, ordinances, codes, rules, regulations, and orders including those pertaining to nondiscrimination.

(b) A franchisee is expressly subject to the County's police power under Article 25A, Section 5(S) to the Annotated Code of Maryland.

(c) Any other provision in this Code concerning the grant of franchises does not apply to the grant of franchises for the construction and operation of cable systems. The County, in granting a franchise under this Chapter, is exempt from the provisions of Chapter 11B.

(d) A franchisee or other person is not excused from complying with any of the terms and conditions of this Chapter or a franchise agreement by any failure of the County, one or more occasions, to require compliance or performance. (FY 1991 L.M.C., ch. 3, § 1.)

Sec. 8A-7. Interpretation of franchise terms.

(a) This Chapter applies to a franchise agreement as if fully set forth in the franchise agreement. The express terms of this Chapter prevail over conflicting or inconsistent provisions in a franchise agreement.

(b) The provisions of a franchise agreement must be liberally construed in order to effectuate its objectives consistent with this Chapter and the public interest.

(c) A franchise agreement is governed by, and construed in accordance with, the laws of Maryland. (FY 1991 L.M.C., ch. 3, § 1.)

Sec. 8A-8. Application to grant, renew, modify, or transfer a franchise.

(a) A person seeking a franchise or a current franchisee must apply to the County for a new franchise, renewal of a franchise under the formal or informal procedures in Section 626 of the Cable Act, modification of a franchise agreement, transfer of a franchise, or a transfer of an interest in a franchisee if the transfer is subject to County approval. An applicant has the burden to demonstrate compliance with all application requirements of this Chapter.

(b) An applicant must:

(1) submit the number of copies of the application required by the County;

(2) pay the application filing fee specified in regulations;

(3) meet the requirements of any applicable request for proposals;

(4) identify in writing the name and address of any person authorized to act on behalf of the applicant with respect to the application; and

(5) certify to the County that the application includes all information required by this Chapter for the appropriate type of application.

(c) A person may apply for a new franchise in response to the County’s request for proposals or on an unsolicited basis. The County may issue a request for proposals when the County receives an unsolicited application or at any other time. If the County elects to issue a request for proposals after receiving an unsolicited application, the applicant may submit an amended application in response to the request for proposals, may inform the County that its unsolicited application should be considered as its response to the request for proposals, or may withdraw its unsolicited application. The County may reject an application that is unresponsive to a requirement of a request for proposals.

(d) An application for a new franchise must contain the following information:

(1) Identification of the persons who own or control the applicant, including:

(A) the names, addresses, and percentage interest of the 10 largest holders of an ownership interest in the applicant and all persons with an ownership interest of 5 percent or more;

(B) any other persons who control the applicant;

(D) any other business affiliation and cable system ownership interest of each identified person.

(2) A statement addressing whether the applicant, or any other person controlling the applicant, or any officer or majority stockholder of the applicant;

(A) has been adjudged bankrupt;

(B) has had a cable franchise revoked; or

(C) has been found by any court or administrative agency to have violated a security or antitrust law or convicted of a felony or any crime involving moral turpitude.

Any statement under this paragraph must identify each person involved and explain the circumstances.

(3) A demonstration of the applicant's technical, legal, and financial ability, including financing sources and commitments, to construct and operate the proposed cable facility, identifying key personnel.

(4) A detailed description of the geographic area to be served by the cable system.

(5) If the applicant seeks a limited franchise under this Chapter, a description of how the proposal meets the requirements for a limited franchise, including the justification for any waiver of the minimum requirements.

(6) A detailed description of the physical facility proposed, including channel capacity, technical design, performance characteristics, headend, and access facilities and equipment.

(7) A description of the construction of the proposed system, including an estimate of above-ground and below-ground mileage and its location, the proposed construction schedule, a description, where appropriate, of how services will be converted from existing facilities to new facilities, and information on the availability of space on poles and conduits including an estimate of the cost of any necessary rearrangement of facilities.

(8) A demonstration of how the proposal will reasonably meet the future cable- related needs and interests of the community, including a description of how the proposal will meet the needs described in any recent community needs assessment conducted for the County.

(9) Pro forma financial projections for the first 10 years of the franchise term, including a statement of income, a balance sheet, sources and uses of funds, and schedule of capital additions, with all significant assumptions explained in notes or supporting schedules.

(10) An affidavit of the applicant or an authorized officer that:

(A) certifies the truth and accuracy of the information in the application;

(B) acknowledges the enforceability of application commitments; and

(11) If an applicant proposes to construct a cable system which would constitute an overbuild, the identification of the area where the overbuild would occur and the potential subscriber density in the area to be served by competing cable systems.

(12) A certification that the applicant has served a copy of its application on all existing franchisees.

(13) Any other information necessary to demonstrate compliance with this Chapter.

(e) An application to modify a franchise agreement must include the following information:

(1) The specific modification requested.

(2) The justification for the requested modification, including the impact of the requested modification on subscribers and others, and the impact on the applicant if the modification is not approved.

(3) A statement whether the modification is sought pursuant to Section 625 of the Cable Act, and, if so, a demonstration that the requested modification meets the legal standards of the Cable Act.

(4) Any other information necessary for the County to decide whether the modification complies with County law.

(f) An application to renew a franchise must comply with Section 8A-22.

(g) An application to transfer a franchise or an interest in a franchisee must comply with Section 8A-23.

(h) An applicant must certify that the application contains all required information.

(i) Within 10 business days after receiving an application for a new franchise for an overbuild, the County Executive must determine whether the application is complete under subsection (d). If the application is complete, the Executive must accept it for filing. If the application is not complete, the Executive must specify the additional information required under subsection (d) before the application can be accepted for filing.

(1) If the Executive rejects the application for filing, the applicant may resubmit or supplement the application with the additional information, and the Executive must reconsider, within the 10-day deadline starting on the date of resubmission, whether the application is complete under subsection (d).

(2) When the Executive accepts the application for filing, the Executive must make the application available for public inspection and forward the application to the Telecommunications Advisory Committee for review and comment.

Acceptance of an application as complete for filing does not limit the Executive’s authority to request additional information related to the criteria in Section 8A-9(e), or to recommend, after full review of the application, that the Council deny the application based on those criteria. (FY 1991 L.M.C., ch. 3, § 1; 1998 L.M.C., ch. 18, § 2; 2005 L.M.C., ch. 24, § 1; 2006 L.M.C., ch. 34, § 1.)

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