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HomeMy WebLinkAboutItem 6.2 Muni Code Digital & Video C~TY CLERK F~le # D~[I][QJ.,[~]QJ AGENDA SlAllEMENT C~1Y COUNCil MEE1~NG DA11E FebnJ]alrry 19, 2008 SUBJEC'f Ordmance ImplementIng the DIgital Infrastructure and Video Competition Act of2006 by AddIng Chapter 322 [Video Service Provided by State FranchIse Holders 1 to the MUnIcIpal Code Report Prepared by Roger Bradley, Administrative Analys.( and John Bakker As.slstant CIty Attorney A 'f'f ACHMEN'fS I 2 Proposed Ordmance Proposed ResolutIon Adoptmg a Schedule of Penalties for V iOlatiOns by State Franchise Holders December 5, 2006 Staff Report on Project Lightspeed and the DigItal Infrastructure and Video CompetItIOn Act of 2006 3 RJECOMMlENDATION rJ(i 1 WaIve readmg and INTRODUCE ordInance FINANCIAl. ST A 'fEMENT Adoption of the proposed ordmance would result In the CIty collectmg the maXUflum amount of revenue to support publIc, educatIon and government channels permItted by law BACKGROUND Local entItIes withm the State of Cahforrua have tradItIonally had the authonty to regulate, m accordance with federal, state and local law, certam aspects of the provISion of Video servIce, Includmg the authorIty to award franchIses In 2006, the State LegIslature adopted the DigItal Infrastructure and Video CompetitIon Act of2006 ("DIVCA"), whIch became effectIve January 1,2007 The purpose of DIVCA was to streamlIne the franchIsmg process for VIdeo service proVIders and to proVIde for the convergence of technologies For mstance, telephone compames-such as AT&T-have developed mtegrated products that use eXIstmg telephone networks to proVIde cable-like servIces, and cable companIes-like Comcast-are usmg theIr networks to prOVIde telephone servIces ThIS technology allows telephone, cellular phone, audIO, Internet, and VIdeo servIces to be proVided by one company To faCIlItate the rollout of such mtegrated servIces, the LegIslature enacted DIVCA DIVCA substantially changed Cahforma law by establIshmg a statewide franchismg procedure for VIdeo servIce prOViders to be admmIstered by the Cahforma PublIc UtIlItIes CorrumssiOn ("CPUC") DIVCA establIshes that the CPUC IS the sole authOrIty to award franchises for the proVISIon of vIdeo servIces, and preempts local franchIsmg authonty Further, DIVCA establIshes hmIted authOrIty of local entities to exercise control over state franchIse holders Consequently, the Clty IS now prohibIted by DIVCA from awardmg new local franchlses or regulatmg state franchIse holders, except to the extent permitted by COPY ']['0 Page I of3 H,][,IEM NO 62- ~ DIVCA, which heretofore the CIty could have done pursuant to the terms of the Chapter 320 of the MUnIcIpal Code ("Cable TelevIsion and CommumcdtIon Systems") WhIle DIVCA constItutes a sea change relatIve to the local mvolvement m the regulatIOn of vIdeo programmmg, It does contam a number of proviSIOns desIgned to make franchIsmg agenCies, lIke DublIn, more or less whole Thus, the City will receive the cqUIvalent of franchIse fees from state franchise holders, and state franchise holders WIll be reqUIred to provIde publIc, educatIonal and governmental channel access and support In addItIOn, AB 2987 contaInS proviSIOns deSIgned to ensure that neIghborhoods are not dlscnmmated agaInst on the basIs of household mcome For more detaIls about DIVCA, see the Staff Report from the December 5,2006 CouncIl Meetmg (Attachment 3) Presently, there are two state franchIse holders operatIng In the City of DublIn AT&T receIved a state franchIse on March 30, 2007, and It began offermg ItS so-called U-Verse servIce pursuant to that state franchIse sometIme after March 30, 2007 The CIty'S mcumbent cable prOVIder, Comcast, WhICh operated pursuant to a franchIse agreement WIth the CIty for many years, receIVed a state franchise on January 2, 2008, under DIVCA, Comcast was entItled to seek the state franchise begmnmg as of January 2,2008 due to AT&T's entry Into the VIdeo programmmg market m Dublin Comcast's state franchise became effectIve m DublIn, and the franchIse agreement between the CIty and Comcast was term mated, when Comcast notIfied the City "that It WIll begm provldmg VIdeo servIce" m Dublm under the state franchise The City receIVed such a notIce from Comcast on January 14,2008 DISCUSSION The attached proposed ordmance (Attachment I) would allow the CIty to exercise the lImited authonty granted to It by DrVCA The followmg outlmes the regulatIons mcluded In the ordmance I PublIc, Educational, and Government Channel FaClhtIes The proposed ordmance establIshes a publIc, educational, and government ("PEG") channel faCilitIes fee of one percent (I %) of any state franchise holder's gross revenues to support PEG channel faCIlItIes ThIS fee WIll replace the eXlstmg $050 per subscnber fee that IS In the Comcast franchIse Further, to ensure that the CIty has adequate mformatIOn to detenmne whether the appropnate calculation of the 1 % fee has been performed, the proposed ordmance reqUIres that a statement be provIded WIth the payment settmg forth the manner m which the calculatIon was made AddltIOnally, it allows the City Manager to Issue dIrectIves requmng addItIonal reportIng to ensure that the baSIS for the calculatIOn IS adequately explamed and documented FInally, under DIVCA, the ordmance enactmg the 1% fee "automatIcally expires" upon the expIratIon of a state franchIse, the terms of which are 10 years ThiS creates the potential for a number of Issues, smce there are multIple state franchIses WIth dIffenng expIratIon dates and SInce the formalItIes for enactment of ordInances-a first readmg, subsequent adoptIon, and 30-day walhng penod thereafter-necessanly reqUIre substantIal lead tIme To avoid these Issues, the proposed ordmance provides that, notwIthstandIng the provIsIon m DIVCA, the sectIon shall be deemed automatIcally reauthorIzed unless the state franchIse holder provIdes the CIty WIth 60 days' wntten notIce that the 1 % fee WIll expire upon the termInatIOn ofthe state franchIse ThIS WIll prOVide the CIty WIth an opportumty to adopt an ordInance reauthonzmg the fee 2 Customer ServIce PenaltIes Notwlthstandmg the fact the local agenCIes have no real role III the regulatory process, DIVCA provides that the City "shall enforce" certam statutory customer service and protectlOn standards to WhICh statc franchIse holders are subject, when complaInts are receIved from resIdents wlthm the O? ':( .3 Clty'sjunsdlctIon (See Public UtIlItIes Code, 9 5900, subd (c)) It also states that the City shall adopt, eIther by resolutIOn or ordInance, a schedule of pcnaltIes for viOlatlOns of such standards The proposed ordmancc provides that the CIty may adopt a schedule of penaltIes by resolutIOn A proposed resolutIon has been prepared that would adopt a schedule at the maxImum permItted by law for all vIOlatiOns If the CouncIl mtroduces the proposed ordmance at the February 19 meetIng, staff WIll recommend that the Counctl adopt the resolutIOn at the meetmg at which the ordmance IS adopted 3 AuthOrIty to ExamIne and AudIt Busmess Records The proposed ordmance authonzes the City Manager to exerCIse the CIty'S nght under DIVCA to examme and audit the busmess records of any state franchise holder Under DIVCA, whether the CIty or franchIse holder pays for the "reasonable and actual costs" of the audIt depends on the amount of the underpayment, as follows More than 5% underpayment Zero underpayment Between 5% and zero FranchIse holder CIty Each bears own costs RECOMMENDA'fHJlN Staff recommends that the CIty CounCil waIve the readmg and INTRODUCE the proposed ordmance 1056398 1 3i2 I ay)1 ORDINANCE NO AN ORDINANCE OF THE CI'fY OF DUBLIN ADDING CHAPTER 322 TO THE DUBLIN MUNICIPAL CODE, RELATING TO REGULATIONS FOR THE PROVISION OF VIDEO SERVICE BY S'fATE FRANCHISE HOLDERS The CIty CouncIl of the City of Dub 1m ordams as follows SEC'fION 1 The CIty CouncIl finds as follows I CItIes and countIes wIthm the State of Cahforrua have tradItIOnally had the authorIty to Issue franchIses to, and thereby regulate, prOVIders of cable services WIthIn theIr respectIve JunsdictIons, III accordance With federal, state, and local law 2 The DigItal Infrastructure and Video COmpetItIOn Act of2006 (Pubhc UtIlItIes Code sectiOns 5800 et seq ("DIVCA")) became effectIve January 1,2007 3 DIVCA changed CalIfornIa law by estabhshmg a stateWIde franchismg procedure for VIdeo servIce provIders to be admmlstered by the CalIforrua Pubhc UtIlItIes CommisSIOn ("CPUC") 4 Under certam Circumstances descnbed therem, DIVCA preempts the CIty'S authonty to Issue franchIses and provIdes, m those CIrcumstances, that the CPUC IS the sole authonty to award stateWIde franchises for the proVISion of VIdeo services 5 DIVCA authonzes the City to exerCise certam authonty over state franchise holders 6 The CIty of Dublm deSIres to exerCIse that authonty and to faCIlItate the ImplementatIon of DIVCA by settmg forth regulatIOns for the prOVISion of Video servIce by state franchIse holders withm the City SECTION 2 Chapter 3 22 IS hereby added to the Dublm MunICIpal Code to read as follows Chapter 3 22 VJIDEO SERVICE PROVIDED BY S'fA'fE FRANCHISE HOLDERS SectIons 3 22 010 3 22 020 3 22 030 3 22 040 3 22 050 Purpose and ApplIcabIlIty DefinItIOns PublIc, EducatIonal, and Government Channels Customer Service PenaltIes for State FranchIse Holders Authonty to Examme and AudIt Busmess Records "1t~lI ~,;( c:2f}Qf08 ~ A TV A (c fHI M IE 6\!J 1r 11. (J ~~ IT] 322010 Purpose and ApplIcabilIty The purpose of thIS chapter IS to set forth regulatIOns for the provisIon of Video service by state franchise holders, m accordance with the Digital Infrastructure and Video CompetItIon Act, CalIfornia PublIc UtIhties Code sectIOns 5800-5970 ("DIVCA") 3 22 020 DefiDltlOns For the purposes OfthIS chapter, the words set out m this sectIOn shall have the followmg meanmgs A "CIty" means the CIty of Dubhn B "CIty Manager" means the City Manager of the CIty of Dublm, or hIS or her designee C "FranchIse fee" shall have the meanmg gIven that term by subdIVisIOn (g) of Pubhc UtIlItIes Code sectIon 5830 or ItS successor D "Holder" shall have the meanmg gIven that term by subdIVIsIOn (j) ofPubhc UtIhtIes Code sectIon 5830 or ItS successor E "Matenal breach" shall have the meanmg gIVen that term by subdIVIsIOn (j) of PublIc UtIhtIes Code sectIon 5900 or ItS successor F ''Network'' shall have the meanmg gIVen that term by subdIVISIOn (I) ofPubhc UtIhtIes Code sectIon 5830 or ItS successor G "PEG channels" means "pubhc, educatIonal, and governmental access channels" as that term IS defined m PublIc UtIlitIes Code sectIon 5870 or ItS successor sectIon H "State franchIse" shall have the meanmg given that term by subdIVIsIon (p) ofPubhc UtIhtIes Code section 5830 3 22 030 Fee to Support PublIc, lEducatlOnal, and Government Channels A Each state franchIse holder shall remIt to the CIty a fee to support PEG channel facIhtIes m the amount of one percent (1 %) of the gross revenues, as defined In Pubhc UtIhtIes Code sectIOn 5860, of the state franchIse holder The fee shall be remItted on a quarterly baSIS and wlthm 45 days of the close of each calendar quarter Each remIttance shall be accompanIed by a summary explammg the baSIS for the calculatIon of the fee B Each state franchIse holder shall furrush, on an annual baSIS, a statement wlthm 90 days of the close of the calendar year, either audIted and certIfied by an mdependent certified publIc accountant or certified by an officer of the state franchise holder, reflectmg the total amount of gross revenues, as defined m Pubhc UtIlItIes Code sectIOn 5860, for the precedmg calendar year, and all payments, deductIons and computatIons used to 2 3 ~ 1'7 determIne the amount of the remittances reqUired by subdivIsion A ofthis sectIon dunng the precedmg calendar year The CIty Manager may estabhsh, and from tIme to tIme reVIse, such addItIonal reportIng reqUirements as are necessary to ensure that the basIs for the calculatIon ofthe amount of remIttances are adequately explamed and documented, and each state franchIse holder shall comply WIth such addItIonal reportmg reqUIrements prOVIded that each franchIse holder shall have first been prOVIded WrItten notIce of such reqUirements at least 15 days pnor to the begmnIng of the calendar year C Notwithstandmg subdIvISion (n) of PublIc UtIlItIes Code sectIOn 5870, upon the expIratIon of any state franchIse, WIthout any actIon of the City Council, thIs sectIon shall be deemed to have been automatIcally reauthonzed, unless the state franchise holder has gIVen the City Manager and the City CounCIl wrItten notIce 60 days pnor to the eXpIratIOn of itS state franchIse that the sectIOn WIll expIre pursuant to the terms of subdIVISion (n) ofPubhc UtIlItIes Code sectIOn 5870 3 22 040 Penalties for MaterIal Breach by State Franchise Holders A In accordance WIth Public UtIlItIes Code sectIon 5900 or Its successor sectIon, the CIty Council may from tIme to tIme adopt, by resolutIOn, a schedule of penaltIes for any matenal breach, as that term IS defined m subdiVISIon (j) of PublIc UtIhtIes Code sectIOn 5900 or ItS successor sectIon, by a holder of a state franchIse B The CIty Manager shall have the authonty to assess penaltIes for any matenal breach by a holder of a state franchIse Pnor to assessmg penaltIes for a materIal breach, the CIty Manager shall first have proVIded the state franchIse holder WIth wntten notIce of any alleged matenal breach of the customer service proVISIOns set forth In CalIfornia PublIc UtilitIes Code sectIon 5900 and shall allow the state franchise holder at least thirty (30) days from receIpt of the notIce to remedy the speCIfied matenal breach Ifthe materIal breach has not been remedIed upon the expIratIon of thIS 30 day penod, the CIty Manager may commence the assessment of penaltIes In the event that a speCIfied materIal breach has not been remedied followmg the CIty Manager's assessment of penaltIes m the maXimum amount perrrntted per occurrence, the CIty Manager, after provIdmg a subsequent wntten notIce of the alleged matenal breach, may treat the contmumg occurrence as a subsequent matenal breach C The CIty shall submIt one half of any penalty amounts It receIves to the DIgItal DiVIde Account estabhshed by CalIfornIa PublIc UtIhtIes Code sectIOn 2805 D No monetary penaltIes shall be assessed for a materIal breach if It IS out of the reasonable control of the state franchIse holder 3 22 050 AuthOrity to Examme State Franchise Holder's lBusmess Records The CIty Manager IS hereby authonzed to examme, or cause to be exammed, the busmess records of the holder of the state franchIse III accordance WIth subdIVISion (I) of PublIc UtIlItIes Code sectIon 5860 3 4~ 17 SECTION 3 EffectIve Date This Ordmance shall take effect and be enforced thirty (30) days followmg Its adoptIon SEC'fION 4 Postmg The CIty Clerk of the CIty of Dublm shall cause thIS Ordmance to be posted m at least three (3) publIc places m the CIty ofDubhn m accordance With SectIon 36933 of the Government Code of the State ofCahfornla PASSED, APPROVED AND ADOPTED thIS _ day of ,2008 AYES NOES ABSENT ABSTAIN JanetLockhart,~ayor ATTEST Carolyn Parkmson, Intenm CIty Clerk 1048298 1 4 511'7 ""'"" I RESOLUTION NO - 2008 A RESOLU'fION OF THE CITY COUNCIL OF THE CI'fY OF DUBLIN ********* ADOP'fING A SCHEDUl.E OF PENALTIES FOR THE MA'fERIAL BREACH BY THE HOLDElR OF A S'fATE FRANCHISE OF SElRVICE STANDARIDS AND OTHElR S'fANDARDS SPEC[FIED IN PUBLIC UTILITIES CODE SEC'fION 5900 WHEREAS, a recently enacted state law, the DIgital Infrastructure and VIdeo Competttton Act of2006 (Pubhc UtIlittes Code sectIOns 5800 through 5970) ("DIVCA"), now authonzes new prOViders of vIdeo programmmg services (and mcumbent cable compames under certam clfcumstances) to obtalll state francruses that authonze them to prOVIde such services USlllg City rIghts of way m the unIncorporated areas of the CIty, rather than obtamIng a cable franchise from the CIty, and WHEREAS, DIVCA reqUires the CIty to adopt a schedule of penaltIes for any matenal breach by a holder of a state franchIse of servIce standards and other standards establIshed by subdiVIsIOn (a) of PublIc UtthtIes Code sectIon 5900, and sectIon 42074 of the Dublm MUnICipal Code llldIcates that the Board of SupervIsors may adopt such a schedule of penaltIes from tIme to ttme by resolutIon, and WHEREAS, the City mitIally mtends to satIsfy thIS state law reqUirement by adoptlllg a schedule of penaltIes that sets the amount of the penalty for all "matenal breaches" at the maXimum amount authonzed by DIVCA NOW, THElRlEFOlRJE, BE I'f RESOLVED by the CIty CouncIl of the CIty ofDubhn as follows 1 Unless the context reqUires otherwIse, all words and phrases used herem shall have the same meanlllgs as ascnbed to those words and phrases m Chapter 322 of the Dublm MUnICIpal Code 2 The penalty for any matenal breach, as that term IS defined m sectIOn 322040 of the Dubhn MUnICIpal Code, by the holder of a state franchise shall be as follows a FIve hundred dollars ($500 00) for each day of each matenal breach, not to exceed one thousand five hundred dollars ($1,50000) for an occurrence of a matenal breach b In the event that a matenal breach has occurred, the CIty has prOVided nottce to the holder and assessed a penalty ansmg from such matenal breach, and a subsequent matenal breach ofthe same nature occurs wltrun 12 months ofthe InItIal occurrence, the penalty shall be as follows A 1r1r A (C [H] IjVi][E 1i\!l1r 2 b~ If One thousand dollars ($1,000 00) for each day of each matenal breach, not to exceed three thousand dollars ($3,000 00) for the first such occurrence of a matenal breach 11 Two thousand five hundred dollars ($2,500 00) for each day of each matenal breach, not to exceed seven thousand five hundred dollars ($7,50000) for the second and further such occurrence of a matenal breach PASSED, APPROVED AND ADOP'fED thIS 19th day of February, 2008 AYES NOES ABSEN'f ABSTAIN Mayor ATTEST City Clerk 1056579 I 7 o-f!- ) '7 CITY ClERrt< Fnle # D[][l][L]-@}[{] \ /\ (( {f ( - II r AGENDA STATEMENT CITY COUNCil MEETING DATE December 5, 2006 SUBJECT ATTACHMENTS RECOMMENDATION 1\ ~ ^\tA~ 2 FINANCIAL STATEMENT None Status of AT&T Project Llghtspeed and Summary of DIgItal Infrastructure and VIdeo CompetItIon Act of2006 (AB 2987) ~ ! ( Iii Report Prepared by Melissa Morton Public Works Director John D Bakker Assistant City Attorney and Leah Peae-hey Cay A//orney oS Office 1 2 3 Summary of Key ProvIsIOns of AB 2987 Photo of SAI box along Wmebeny Way Draft TypIcal Condittons for AT&T Project LIghtspeed Cabmet Permrts ReceIve Staff presentatIOn, and ProvIde dIrectIon to Staff regardmg (a) the Issuance of encroachment pernuts and SIte work permIts for Project LIghtspeed faCIlItIes pnor to AT&T's receIpt of a state franchIse, and (b) the adequacy of Staffs proposed condItIons and standards for such permIts DESCRIPTION ThIS Staff Report IS mtended to proVide a descnptIOn of and update on AT&T's Project LIghtspeed Project LIghtspeed IS AT&f's ImtIatlve to upgrade Its eXIstmg telephone network to allow It to prOVIde ItS customers WIth hIgher speed mternet access and Video programmmg servIces, much lIke cable teleVISIOn ThIS Report also summanzes Project Lightspeed m lIght of the recently enacted "DIgItal Infrastructure and V Ideo CompetItIOn Act of 2006" (AB 2987), WhICh AT&T and other telecommUnIcatIons companIes shepherded through the legIslature thts summer Th~s legIslatIOn prOVIdes AT&T the opportumty to seek a state franchIse that allows It to prOVIde VIdeo programmmg servIces WIthout a cable franchIse agreement WIth the CIty State franchIses WIll not be aVaIlable untIl early next year, but ^ T &T has mdIcated to Staff that It would lIke to move forward WIth COpy TO ShIyama Clurue, AT&T ------------------------------------------------------------------------------------------------------------- Page I of 4 G \PERMITS\ENCROACH\ProJect Llghtspeedlagst Status A IT PrOject Llglnspeed & AB 2987 (2) DOC ITEM NO A TT ACHMENT 3 81' 11 upgradIng the telcphone network In antlclpatIon of provIdIng such servIces To date, AT&T has submitted seven cncroachment pcrrmt applIcatIons for Project LIghtspeed-related work Staff IS seelang dIrectIon on how these requests should be handled AT&T Project Ltghtspeed Telephone corporatIons such as AT&T (formerly SBC) are developIng products that use the eXIstIng telephone nctwork to proVIde cable teleVISIOn-lIke servIces, along WIth other broadband mternet servIces Project LIghtspeed consIsts of a fiber-optlc based, Internet Protocol (IP) network that WIll be capable of provIdmg Integrated data, vOIce and VIdeo servIces AT&T antlcIpates USIng the system to prOVIde cable teleVISIon-lIke servIces to ItS customers, as well as telephone, audIO and mtemet services AT&T IS m the mIdst of rollmg out Project LIghtspeed m select areas of CalIfornIa and has mformed Staff that It would lIke to prOVIde these servIces throughout Dublm Project LIghtspeed's basiC network upgrades (at the local level) Involve bnngmg illgh-capaclty fiber-optIc cables to servIce area Interface (SA!) cabmets that eXIst throughout AT&T's telephone network Each SA! box serves between 200 and 600 homes and bUSInesses AT&T has IndIcated that there are at least 26 SA! cabmets In Dublm From each SA! cabInet, copper telephone lInes are routed to each customer s prermses The eXIstIng copper telephone hnes from the SA! cabInets to the customer premises WIll contInuc to be used for Project Llghtspeed, by contrast, Venzon IS completmg a SImIlar upgrade project m other parts of CalIforma where It IS the local telephone provIder bnngmg 'fiber to the premIses" In order to prOVIde Project Lightspeed servIces to the customers served by a partIcular SA! box, AT&T WIll mstall a new cabmet (the so-called VRAD) near the eXIstmg SA! cabmet There are three such VRAD cabmets of varymg SIzes, the most prevalent is the 52B cabmet whIch can prOVIde servIce to approxImately 400 customers The 52B cabmet stands approxImately 63 mches hIgh and 43 mches WIde The depth IS about 20 Inches The larger cabmet IS approxImately the same heIght but IS approxImately tWIce as deep The length and condItIOn of the copper hnes located between the VRAD and the customer prermses IS the key constramt m provldmg the illgh speed data servIce that IS necessary to prOVide PrOject Llghtspeed servIces It IS the CIty'S understandmg that when the length of these copper hnes from the VRAD to the customer premIses IS longer than 4,000 feet Project LIghtspeed services cannot be relIably prOVIded In practice, tills may mean that even If AT&T mstalls VRADs at each of the SA! cabmets m Dubhn, some premIses may not receIve Project LIghtspeed servIces due to tills techmcal constramt EXlstmg Legal Framework (Pre-AB 2987) Under state and federal law, cable teleVlslOn operators are reqUITed to obtam a local franchIse from the franchIsmg authonty, generally the local government served by the cable operator, pnor to constructmg a cable system (47 US C ~ 541(b), Gov Code, ~ 53066) The baSIS of the federal law franchIse reqUIrement IS that the cable operator is usmg the publIc streets for ItS faCIlItIes Thus, the CIty has a current cable franchIse agreement WIth Comcast, whIch IS effectIve untIl June 1,2011 By contrast, under state law, telephone corporatIons are not reqUIred to obtam a local franchIse to proVIde telephone and mformatIon servIces State law gIves these entItIes the authonty to construct telephone hnes m and along any publIc nght-of-way (the so-called "statewIde francillse ), subject to certam tIme, place and manner regulatIOns, willch are dIscussed on page 3 of thIS report (pub UtII Code S 7901, 7901 1) Page 2 of4 New State FranchIsc Procedure for VIdeo ServIce ProvIders CAB 2987) 0111 The legal framework relatmg to cable franchIsmg WIll change sIgmficantly when AB 2987 becomes effectIve on January 1, 2007 AB 2987 estabhshes a statewIde franchIsmg procedure for VIdeo servIce proVIders to be admmistered by the Cahforllla Pubhc UtIhtIes COmrTIlSSIOn (CPUC) When It IS Issued a state franchise under AB 2987, AT&T Will have the nght to Install facllttIes to be used for the prOVIsIOn of VIdeo programnung servIces m the publtc nghts of way WIthout a local franchise m the same manner that telephone lInes and facIlttIes can be mstalled Attachment 1 contams a more detaIled descnptIon of the key prOVISIOns of AB 2987 In bnef, AB 2987 contams a number of prOVISIons deSigned to make franchlSlng agencIes, hke Dublm, more or less whole Thus, CItIes and countIes m the area m whIch a state franchIse IS issued WIll receIve the eqUlvalent of franchIse fees from state franchIse holders and state franchIse holders WIll be reqUIred to proVIde publIc, educatIonal and governmental channel access and capItal support In addItlon, AB 2987 contams proVISIons deSIgned to ensure that neIghborhoods are not dIscnmmated agamst on the baSIS of household mcome It should also be noted that AB 2987 proVIdes that mcumbent cable operators, such as Com cast may opt out of eXlstmg franchIses once a new state franchIse holder enters the JunsdlctIon, however, the mcumbcnt s new state franchIse would not be operahve unttl January 2, 2008 AT&T's Request to Begm Network Upgrades Before RecelVmg State FranchIse In antICIpatIon of obtammg a state franchise, AT&T has approached Staff to request Issuance of a total of seven encroachment permit applIcations for VRAD cabInets The requests mclude the four SItes for constructIon of VRAD cabmets, and three more recently-submItted applIcations to place VRAD cabmets m eXIstIng underground envIronmental vaults AT &T does not yet have a state franchIse, and therefore Staff belIeves that AT&T has no legal nght to mstall faCIlItIes that wIll be used to prOVIde cable services Accordmgly, the CIty could condItIon the Issuance of permIts on AT&T agreemg to obtam a local franchIse or a state franchise pnor to provIdmg VIdeo servIce AT&T has Ihdlcated that It IS unWIllIng to accept such a condItion, but pomts out that Issumg the permIts now WIll result m the servIces bemg avatlable sooner than otherwIse mIght be the casc If the Issues WIth the sItmg and deSIgn of Project LIghtspeed cabmets descnbed m the sectIon below can be resolved, Staff could Issue the permIts WIth a "reservatIOn of nghts" condItIon suggested by AT&T This condItIon would baSIcally prOVIde that the pernut m no way affects AT&T and the CIty'S pOSItIons With respect to whether a local franchise IS reqUlred by federal or state law GIven that Staff antiCIpates AT&T bemg Issued a state franchise soon after AB 2987 becomes effectIve on January 1, 2007, thiS seems lIke a reasonable approach (The permits would also be subject to a condItIon reqwnng the factlItIes to be removed If they are ever abandoned or unused for a penod tIme that has yet to be determmed ) Staff IS askmg for dIrectIon on whether It would be appropnate to Issue permIts now or whether permIt Issuance should be Withheld until AT&T has a state franchIse SItmg and DeSIgn ofProlect LIghtspeed Cabmets Smce the VRAD eabmets must be located near the eXlstmg SA! cabmets, Staff IS concerned that m some eascs, AT&T may WIsh to locate the boxes m unSIghtly locations or m locatIOns that substantially Impact nearby reSIdents As an example, Attachment 2 shows the locatIOn of an SA! cab met m a constramed Page 3 of4 10 ~ 17 location AT&T has mdIcated that It has some fleXIbilIty m placmg the VRAD cabmets, but constramed sItes such as the sIte depIcted m Attachment 2 may nonetheless result m the placement of cabmets m undeSIrable 10catlOns AddItionally, to the extent that the VRADs are moved, It may reduce the number of customers that can receIve Project LIghtspeed services The typIcal process that AT&T and the CIty follow when AT&T performs constructlOn on ItS telephone system IS for AT&T to obtaIn an encroachment or SIte work permIt from the Publtc Works Department, and bUIldmg and electncal permIts If necessary In some 10catlOns, It appears that SIte development reVIew may addttIonally be reqUIred Encroachment permits and SIte work permits do not mvolve publtc heanngs and are Issued by Staff To date, AT&T has expressed a wlllmgness to work WIth CIty Staff to locate the SItes ill acceptable locatIons Although AT&T has not made any formal commItments as to a process for locatmg the boxes and seekmg publtc mput before subll1lttmg permits that could be controversial, AT&T has committed to such processes m other CItIes and would lIkely commIt to a SImIlar process m Dublm Staff belteves that these questions could be dealt WIth m the encroachment and SIte work permIt process, and that it IS possible to work WIth AT&T to SIte the cabmets m the most unobtrusIve locatIon gIven the vanous constramts at each mdIvIdual Site City Staff has prepared a set of draft conditlons that would be rmposed on such permits (Attachment 3) Staff IS seekmg dIrection from the CIty CouncIl on whether the proposed condittons are adequate to protect the mterests ofthe CIty !RECOMMENDATION Staff recommends that the CIty CounCIl 1) ReceIve Staff presentation, and 2) PrOVIde drrectlOn to Staff regardmg (a) the Issuance of encroachment permIts and SIte work permIts for Project LIghtspeed facIlttIes pnor to AT&T's receIpt of a state franchIse and (b) the adequacy of Staff's proposed condItions and standards for such permits Page 4 of 4 (1'1/7 Summary of Key ProvlslolllS IDIgltalllnfrastructure and Video CompetItnon Act of 2006 (AB 2987) The legal framework relatmg to cable franchlSlng wIll change sIgmficantly when AB 2987 becomes effective as of January 1,2007 AB 2987 estabhshes a statewIde franchlsmg procedure for video servIce providers to be admmistered by the CalI forma Pubhc UtilIties COtnmISSIOn (CPUC) and preempts local government franchlsmg authonty under both federal and state law (pub Utt! Code S 5840(a)) Thus, phone companies that are pursumg mItIatIves to provIde VIdeo programrmng servIces, hke AT&T, may seek a state franchIse from the CPUC, and the CIty may not reqUIre a separate franchIse for the provlSlon of VIdeo servIces In addItIon, AB 2987 provIdes that mcumbent cable operators, such as Comcast, may opt out of eXIstmg franchIses once a new state franchIse holder enters the JunsdICtIon, however, the mcumbent's new state franchIse would not be operatIve untIl January 2,2008 (9 5930(b) ) AB 2987 provIdes that the CPUC must begm acceptIng applIcatIons for a state franchIse by Apnll, 2007 Based on recent pronouncements from the CPUC and AT&T, It IS antICIpated that AT&T WIll apply for a state franchIse as soon as the CPUC begms acceptIng apphcattons In early 2007 and WIll be Issued a state franchIse shortly thereafter The followmg subsectIons hIghhght the mam prOViSIOns of AB 2987 Franchzse Fees AB 2987 establIshes a franchise fee of five percent of gross revenues, whIch the state franchIse holder must calculate and remIt dIrectly to the City (s 5840(c)) 'Gross revenues" mclude 1) charges bIlled to the subscnber for cable or Video servIce, 2) franchIse fees passed on to subscnbers, 3) commISSIOns prod to the state franchIse holder for product promotIon (1 e "home shoppmg" channels), and 4) a pro rata portIon of all revenue denved from compensatIOn arrangements for advertlsmg (9 5860(d)) Where a state franchIse holder provIdes a bundled-service package to subscrIbers, such as AT&T s Project Lightspeed, the franchIse fee Will only apply to the gross revenue attnbutable to Video servIce (9 5860(f) ) Publzc EducatlOnal and Governmental Channels and Faczlztzes AB 2987 reqUires a state franchIse holder to provIde the same number of publIc, educatiOnal, and governmental (PEG) channels as the mcwnbent cable operator has actIvated (s5870(a)) AB 2987 also preserves all oblIgatIons In eXistIng franchIses to prOVIde and support PEG channel faCIlItIes and mstltutlOnal networks (I-Net) and to prOVIde cable servIce to commumty bUlldmgs, untt! the franchIse expIres (S5870(k)) After January 1, 2007, any eXlstmg unsattsfied PEG faCilitIes or I-Net oblIgattons WIll be dIVIded among all cable or VIdeo prOViders on a pro rata per subscnber baSIS (S5870(1)) DlscnmznatlOn and BUild-Out Requzrements The federal Cable Act contams proVISIons that prohIbIt cable operators from dlscnmmatmg on the basIS of a partiCular reSIdentIal neIghborhood's mcome AB 2987 contaInS prOVISions deSIgned to comnlv Wlth thIs mandate and some addItIonal butld out reqUlrcmcnts An~mmRl~ ~Q Jd2ef 11 AB 2987 sets forth non-dlscnmmatlOn requuements for all vIdeo servIce provIders, as well as addIttonal bUild-out reqUIrements for large tclcphone corporatlOns (35890(a)) To comply With the non- dlscnmmatIon prOVlSlons of AB 2987, state franchlse holders or theIr affiltates with more than one mIllton telephone customers must meet the followmg condItions 1) wlthm thrce years of begmnmg servIce, 25 percent of the households With access to the holder s Video servIce are low-mcome households, 2) wlthm five years of begmmng servIce, 30 percent of the households with access to the holder's Video servlce are low-mcome households, and 3) state franchise holder proVIdes service to one cOIDmumty center for every 10,000 VIdeo customers (~5890(b)) Low-mcome households are those households where the average annual household Income IS less than $35,000 (~5890(j)(2)) In contrast, state franchIse holders or theu affibates WIth fewer than one mIllIon telephone customers must offer VIdeo servIce to all customers In the telephone servIce area wIthm a reasonable time, as detennmed by the CPUC (9 5890(c) ) In addItIon, AB 2987 prOVides bUlld-out reqUIrements unrelatcd to household Income for state franchIse ho I ders or theIr affi hates With more than one mIlhon telephone customers III Cahfomm (9 5 890( e)) If a state franchise holder is predommately deploymg fiber-optic faCIlIties to the customer's premIse, the holder IS reqUired to proVIde Vldco servIce to between 25 percent of the customer households m the franchise holder's telephone servIce area wlthm two years after It begms provIdmg servIce, and to 40 percent of those households withm five years (9 5890(e)(1)&(2) ) AT&T's "telephone servIce area" IS the temtory m whIch It is the proVider oflocal telephone service G \PERMITS\ENCRQACH\PrDjoct 11ghlspeed\AB 2987 Sununary Key PrOVISIOns doc 2 ~ .j y k \k"'" ~ ,j oill I ~ ~(! <~-& r -~ rf? 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I, 11/ I "1 ,{ ,J \ ~ ' .1 ) 11 ~ I it I' \ , j ,g ~ I 1.' ~ " r , [,1 '.t , f \ '\ " \ ,)> ;:;VY; -I J\ I . ,'\Il ~ """ -I c 1 J"'r '" , '" ( l., J-) ~ 44 ' 151 )7 Sample Conmuons Condlt1ons for AT&T. Permit # Locat1on Perrmt Fee $*** These condttlons are 10 addttlon to the standard permit condttlons pnnted on the reverse of the pernut form 1 WorkIng hours shall be 730 a m to 530 pm Monday through Fnday Specllic hours that lane closures will be allowed for your work locatIOn are o o o DubllO Boulevard from San Ramon Road to Dougherty Road Lane closures, other than thme of bnef duration, shall not be allowed dunng daytime hours unless otherwise approved ill wnnng by the CIty WorkIng hours on tlus portion of Dubhn Boulevard shall be 800 pm to 600 am Closure of more than one lane at a time may be allo\Ved from 1000 pm to 500 a m at the CIty'S chscretlon Other Artenal Roadways Lane closures shall not be allowed pnor to 9 00 a m or after 3 30 P m unless otherwIse approved ill wnnng by the CIty As follows Work outSIde the deSIgnated hours, as well ac; weekend and hohday work, will not be allowed excl.pt WIth pnor wntten penmssIon of the CIty 2 Traffic control shall conform to current Caltrans or MUTCD standards A location-specIfic traffic control plan shall be approved by the CIty pnor to the begmnmg of work 3 A pre construction meeting Wlth the CIty'S Inspector IS reqmred pnor to begtnnIng work 4 Trench and concrete construction shall conform to current CIty of DublIn standard detalls, wluch are avatlable through the CIty'S websIte at www 0 dubhn ca us, or for purchase at the CIvIC Center, 100 CIvIC Plaza, Dubhn CA All restoration shall conform to current CIty of DublIn standards If the paved area Includes stnpillg or markIng, such shall be replaced along WIth final pavement 5 Adjacent bUSInesses or rec;Idences shall be notified In wnnng at least 72 hours pnor to the begmrung of construction The notice shall Include the name and telephone nwnber of at least one contact person who IS able to answer pubhc illqmnes regardtng the work A copy of the notice shall be provIded to the CIty 6 Access to bUSInesses or reSIdences must be mamtalned If a property has more than one dnveway only one dnveway ma} be closed or blocked at a time If only one dnveway serves the property only half the dnveway may be closed or blocked at a time Property owners shall be contacted at least 24 hours ill advance of any dnveway cloc;urec; or other activIties affecnng the property 7 Coordtnate Wlth other work 10 the area If a conllict occurs the CIty of DublIn shall dete.tmll1e the pnonty 8 PedestrIan and wheelchmr access 10 SIdewalk areas shall be mamtaIned at all tunes If a Sidewalk must be temporarIly cloSLd to pedestrIan traffic, an alternate route shall be proVided and stgrled appropnately In conformance WIth accepted standards D I" g.~ 17 9 Any landscapIng that IS d.1stutbed as a result of pernuttee s work shall be re~tored to the satlsfactlon of the CIty and/ol pnvate property owner as appltcable 10 Markmg for CIty traffic signal, street hghtmg, and lttlgaoon facilioe<, shall be requested chrecdy from the Pubhc Works Department over and above U<;A oouficahon Any damage to traffic SIgnal, street hghtmg, or lttlgahon faa.hhes that re,;ults from pemuttee's work shall be repa1ted operabonally at once and permanently WIthm 48 hours lue penmttee shall be responsIble for obta.J.lli11g an acceptable contractor to perform the work If penmttee falls to or choose,; not to make the repa1ts Vllthm the allotted tune, the City shall make the repa1ts and charge pemuttee for the co:,t, plus adnulllstrahvc fees 11 The pubhc ught of way shall be kept clean and SWCpt daily, at a Il11111mum, or as reqmred by the CIty s representahve All work, e g, cleanup, :,torage, and d.1sposal of matenal, shall comply wIth cnvlronmental reguIauons, mclud.lng the Clean Water Act 12 Trenches and excavahons shall not remain open except when penmttee or penmttee's contractor IS prescnt and perfornung work SIte secut1ty shall be to the satlsfactlon the CIty 13 Pernuttee or penmttee's contractor shall obtalIl a CIty of Dubhn ttansportatlon pemut for any extra-legal veludes or loads 14 A CIty of Dubhu Bwlchng Perrmt IS reqUlred for any related electncal work, mcludmg meter (se:tVlce) enclo:,ures 15 Work outsIde the pubhc nght of way shall occur ill an casement that 1:, l11tended for pubhc ubhtles or servIces Where there are no CX1Stlng easements, an casement shall be obtamed from the property owner pnor to begmrung work Drawmgs subnutted With pemut apphcanons shall mclude the locatlons of right of way hues and easement boundanes Work outsIde the pubhc nght of way may be subJcct to a CIty of Dubhn :'ltLwork pemut and may requue mstallation of landscapmg or other screerung Sites will be revtewed on an rnd.1vtdual baSIS rn tcrms of acccss, grad.lng, dram age, and potennallffipact on adjacent property, and add.1nonal condinons may bc lffipo<;ed accord.lngly 16 Each cabmet shall be parnted WIth graffiti reSIstant palIlt The eXlstmg cabmet shall also be repamted Wlth graffitI reSIstant pamt to match the new cabmet 17 Each cabrnet shall mclude contact mformanon of the company The mfortnation shalllllclude the agency s address, name and phone number The CIty shall also be provIded WIth the name, address, phonL number and email address of the person WIth the agency who IS responsible for the mamtenance of the extenor of the umt IOcludmg the repamtmg of the cabinet or graffiti removal 18 The cab met and land~capmg shall be mamtamed m a "hke new" cond.1tion at all t:unL~ The cabmcts shall be penodtcally Inspected and repamted or landscapmg replanted as necessary or as requued by the CommUIllty Development Dltector and/or the Pubhc Works Dltector 19 r andscapmg shall be mstalled around the SIdes and rear of the cabmet to screen the cabInet (5) Drought tolerant evergreen shrubs WhlCh have a rrurumum sue of five gallons ,;hall be planted around the cabmc.t The shrub,; shall be planted so as to completely screen the SIdes of cabmet wlthtn one year At no tune shall the landscapmg be removed \Vlthout the pemusslOn of the /7 ~\ )7 Commuruty Development Duector LandscapIng may only be removed If replaced wIthm two weeks by the same specle<; 20 In the event of the abandonment or nonuse of the unprovement:. Installed pursu,mt clus perfilt, the City may order the pernuttee to promptly remove the rmprovements and restore the sIte to Its prtor conilltlon In the event that the pernuttee docs not remove the Improvements wIthm 60 days (or such longer penod estabhshed by the CIty) of bClllg ~o ordered by the City, penruttee agrees that the CIty may remove the rmprovements and charge the costs thereof to the pernuttee