(a) Considering the concept of the "wired city" to be valid and believing that it will not only become a reality in the foreseeable future but will require a combination of cable and off-the-air transmission for the ultimate in services, the philosophy of Council is as follows:
(1) In setting forth the guidelines for the operation of CATV, this, for all practical purposes, being the beginning of a "wired city", insofar as Council may do so without being in conflict with rules and regulations of the Federal Communications Commission, it is the intent to make possible the offering of a variety of services, while at the same time affording the City and its citizens maximum protection.
(2) In these guidelines is recognition of the right of the operator, or operators, to have a profitable enterprise and to return invested capital to stockholders with a gain.
(3) In summation, the philosophy might be stated as one based on mutual good faith, as involving the City, its citizens and the operator.
(b) Underscoring certain pertinent facts having to do with communication ventures, primarily radio and television type services, which are considered relevant to the enabling legislation for CATV and which are detailed below in subparagraphs (1), (2), (3) and (4), it is the stated intention of Council not to impose unreasonable ceilings on rates to subscribers, which in the final analysis, under the free enterprise system, will be dictated by the subscriber, and not by the operator of some regulatory body, nor to specify unrealistic fees to be paid by the operator to the City.
(1) The speculative nature of a CATV system required to compete in and to meet the demands of a "wired city" without the benefits, or protection, of an exclusive operator's permit, is noted, together with a need for substantial risk capital on a long term basis.
(2) Restricted broadcast competition for radio and television stations, a monopolistic condition created by FCC allocation tables or spectrum limitations, is noted.
(3) That broadcast stations pay no fees to anyone for using the public's air space for the transmission of their signals is noted.
(4) And that broadcast stations are subject to no rules or regulations of the Federal government, where the right of regulation is solely vested, establishing maximum charges for advertising nor imposing a predetermined rate of return on investment, are also noted.
(c) Conversely, but as another facet of the mutual good faith philosophy introduced in part in subsections (a) and (b) hereof, it is the stated intention of this chapter to require maximum value service for subscribers in the City; therefore, Council retains the option, to be exercised upon recommendation of the Service Director, for a thorough annual review to ascertain:
(1) The fairness of the operator's rates; and
(2) Whether the fees paid to the City in previous years by the operator were adequate and/or justifiable, each as measured against the service or services being rendered subscribers; and
(3) whether the operations authorized hereunder continue to be in the public interest.
(d) In order for the operator to meet the prerequisites of "maximum value service" to subscribers, his system necessarily must be viable, and a worthwhile investment for ownership, otherwise, operating funds for optimum service and sufficient additional capital for expansion and extension of service in the future, as both anticipated and desired by Council, will not be available
It is to be emphasized that Council, with such an understanding as expressed in subsection (d) hereof, will never act capriciously or arbitrarily with its right of review as set forth in subsection (c) hereof, and no review will be undertaken and no action detrimental to the operator proposed as a result of such a review, which has been motivated by the operator's profit and loss record alone, the overwhelming issue in any and all reviews being the propriety of charges for service versus the service itself, this being of far greater import to Council than payments to the City.
(e) Additionally, as initially set forth in Section 791.07(b), no action with respect to rates and/or fees paid to the City will be taken without the operator being given opportunity to be heard by Council.
(Ord. 77-75. Passed 6-9-75.)