City Council Meeting: March 20,
2007
Agenda Item: 8-C
To: Mayor and City Council
From: Kathryn
Vernez, Assistant to the City Manager for Community & Government Relations
Subject: Request to Direct Staff to Prepare an Emergency
Ordinance Implementing Provisions of the Digital Infrastructure and Video
Competition Act of 2006 Related to State Video Service Franchises Serving Santa
Monica
Recommended
Action
Staff recommends City Council direct staff to
prepare an emergency ordinance implementing provisions of the Digital
Infrastructure and Video Competition Act of 2006 related to State video service
franchises serving
Executive
Summary
Staff requests direction to draft an ordinance as necessitated by
new State law which became effective January 1, 2007, in order to protect and
preserve the interests of the City and its residents. This ordinance would
implement provisions of the state’s Digital Infrastructure and Video
Competition Act of 2006 (DIVCA), as codified in the California Public Utilities
Code, PUC Section 5800 et seq. In order for several
advantageous provisions of DIVCA to become operative locally, local governments
are required to adopt ordinances prescribing their applicability. Adoption of
these provisions will allow the City to:
1)
obtain additional revenue equal to 1% of a State
franchise holder’s gross revenues for public, educational and government (PEG)
purposes;
2)
clarify the City’s role in the collection of
franchise fees;
3)
apply penalties, although limited under DIVCA,
for violations of DIVCA-prescribed customer service standards;
4)
impose time, place and manner restrictions on
the use of City public rights-of-way; and
5)
provide a process for State franchise holders to
appeal encroachment permit denials.
Discussion
Background
Effective January 1, 2007, as a result of the passage of
California Assembly Bill 2987 in 2006, DIVCA provides for a State video
franchising process to be administered by the California Public Utilities
Commission. State franchising will largely supplant future City video
franchising authority. Under DIVCA, new
video service providers have the ability to apply for a State video franchise
beginning March 2, 2007. In contrast, incumbent cable
operators applying for a State franchise must wait until January 2, 2008, at
the earliest, before a State-issued franchise may become effective. State franchise applicants are required to
designate which areas within the State they intend to serve, with local
jurisdictions named to be notified accordingly.
DIVCA affords the City the ability to retain revenue for PEG
purposes, PUC Section 5870; collect franchise fees, PUC Section 5860; assess
penalties for violations of customer service standards, PUC Section 5900; and
impose restrictions on the use of City rights-of-way PUC Section 5885. DIVCA
also requires the City to provide a process for State franchise holders to
appeal encroachment permit denials, CPUC Section 5885(c)(4).
The California Public Utilities Commission (CPUC) can issue a
State franchise at any time within 44 days after it receives an application. The
CPUC approved a franchise for Verizon on March 8, 2007, less than one week
after Verizon submitted its application. This ordinance will apply to any State
video franchise holders. It is therefore in the City’s best interests to ensure
that an ordinance is adopted as soon as possible in order to preserve City
rights as these new State video franchises come into effect. The proposed
ordinance when drafted will mirror ordinances recently adopted by the City of
Impact on Current Services
With the adoption of an ordinance, key City rights and
requirements will be preserved and be applicable to State-franchised video
service providers operating in City unincorporated areas. The full impact of
DIVCA is unknown because it is a new law and the California Public Utilities
Commission has just begun to implement and reconcile various portions of the
law. Staff will continue to monitor and keep the Council updated as
appropriate.
Budget/Financial Impact
There
will be no cost to the City. Adoption of an ordinance will provide the City
with the ability to obtain additional revenue from State video franchise
holders for PEG support in the amount of 1% of gross revenues (PUC Section 5870).
The City will continue to receive franchise fees of 3%of cable operator gross
revenue as well as 3% from the new State franchise holders’ gross revenues, Section
622(b) of the Cable Act of 1984 and PUC Section 5840.
Prepared by:
Kathryn
Vernez, Assistant to the City Manager for Community and Government Relations
Joseph
Lawrence,
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Approved: |
Forwarded to Council: |
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Kathryn Vernez Assistant to the City Manager for
Community & Government Relations |
P. City Manager |