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HomeMy WebLinkAboutItem 4.10 Digital Infrastructure & Video CITY CLERK File # D~[k][Q]-~[Q] AGENDA STATEMENT CITY COUNCIL MEETING DATE: March 4, 2008 SUBJECT: Ordinance Implementing the Digital Infrastructure and Video Competition Act of2006 by Adding Chapter 3.22 [Video Service Provided by State Franchise Holders] to the Municipal Code Report Prepared by: Roger Bradley, Administrative Analyst and John Bakker, City Attorney ATTACHMENTS: 1. Proposed Ordinance 2. Proposed Resolution Adopting a Schedule of Penalties for Violations by State Franchise Holders 3. December 5, 2006 Staff Report on Project Lightspeed and the Digital Infrastructure and Video Competition Act of2006. RECOMMENDATION~ FINANCIAL STATEMENT: fM{. 2. Waive reading and ADOPT the ordinance; and Adopt the Resolution. Adoption of the proposed ordinance would result in the City collecting the maximum amount of revenue to support public, education and government channels permitted by law. BACKGROUND: Local entities within the State of California have traditionally had the authority to regulate, in accordance with federal, state and local law, certain aspects of the provision of video service, including the authority to award franchises. In 2006, the State Legislature adopted the Digital Infrastructure and Video Competition Act of2006 ("DIVCA"), which became effective January I, 2007. The purpose ofDIVCA was to streamline the franchising process for video service providers and to provide for the convergence of technologies. For instance, telephone companies-such as AT&T-have developed integrated products that use existing telephone networks to provide cable-like services, and cable companies-like Comcast-are using 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 integrated services, the Legislature enacted DIVCA. DIVCA substantially changed California law by establishing a statewide franchising procedure for video service providers to be administered by the California Public Utilities Commission ("CPUC"). DIVCA establishes that the CPUC is the sole authority to award franchises for the provision of video services, and preempts local franchising authority. Further, DIVCA establishes limited authority oflocal entities to exercise control over state franchise holders. Consequently, the City is now prohibited by DIVCA from awarding new local franchises or regulating state franchise holders, except to the extent permitted by ------------------------------------------------------------------------------------------------------------- COPY TO: Page I of3 ITEM No.1. /0 c DIVCA, which heretofore the City could have done pursuant to the terms of the Chapter 3.20 of the Municipal Code ("Cable Television and Communication Systems"). While DIVCA constitutes a sea change relative to the local involvement in the regulation of video programming, it does contain a number of provisions designed to make franchising agencies, like Dublin, more or less whole. Thus, the City will receive the equivalent 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 discriminated against on the basis of household income. For more details about DIVCA, see the Staff Report from the December 5, 2006 Council Meeting (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 offering its so-called U- Verse service pursuant to that state franchise sometime after March 30, 2007. The City's incumbent 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 beginning as of January 2,2008 due to AT&T's entry into the video programming market in Dublin. Comcast's state franchise became effective in Dublin, and the franchise agreement between the City and Comcast was terminated, when Comcast notified the City "that it will begin providing video service" in Dublin under the state franchise. The City received such a notice from Comcast on January 14, 2008. DISCUSSION: The attached proposed ordinance (Attachment 1) would allow the City to exercise the limited authority granted to it by DIVCA. The following outlines the regulations included in the ordinance: 1. Public, Educational, and Government Channel Facilities The proposed ordinance 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 existing $0.50 per subscriber fee that is in the Comcast franchise. Further, to ensure that the City has adequate information to determine whether the appropriate calculation ofthe 1 % fee has been performed, the proposed ordinance requires that a statement be provided with the payment setting forth the manner in which the calculation was made. Additionally, it allows the City Manager to issue directives requiring additional reporting to ensure that the basis for the calculation is adequately explained and documented. Finally, under DIVCA, the ordinance enacting the I %Jee "automatically expires" upon the expiration ofa state franchise, the terms of which are 10 years. This creates the potential for a number of issues, since there are multiple state franchises with differing expiration dates and since the formalities for enactment of ordinances-a first reading, subsequent adoption, and 30-day waiting period thereafter-necessarily require substantial lead time. To avoid these issues, the proposed ordinance provides that, notwithstanding the provision in DIVCA, the section shall be deemed automatically reauthorized unless the state franchise holder provides the City with 60 days' written notice that the 1 % fee will expire upon the termination of the state franchise. This will provide the City with an opportunity to adopt an ordinance reauthorizing the fee. 2. Customer Service Penalties Notwithstanding the fact the local agencies have no real role in the regulatory process, DIVCA provides that the City "shall enforce" certain statutory customer service and protection standards to which state franchise holders are subject, when complaints are received from residents within the ~0:13 ..' City's jurisdiction. (See Public Utilities Code;!i 5900, subd. (c).) It also states that the City shall adopt, either by resolution or ordinance, a schedule of penalties for violations of such standards. The proposed ordinance 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. As the Council introduced the proposed ordinance at the February 19, 2008 meeting, staff recommends that the Council adopt the resolution at the meeting at which the ordinance is adopted 3. Authority to Examine and Audit Business Records The proposed ordinance authorizes the City Manager to exercise the City's right under DIVCA to examine and audit the business 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 RECOMMENDATION: Staffrecommends that the City Council waive the reading and ADOPT the proposed ordinance, and adopt the Resolution. . 1056398.1 2fJ;j3 l6J;fi7 ORDINANCE NO. AN ORDINANCE OF THE CITY OF DUBLIN ADDING CHAPTER 3.22 TO THE DUBLIN MUNICIPAL CODE, RELATING TO REGULATIONS FOR THE PROVISION OF VIDEO SERVICE BY STATE FRANCHISE HOLDERS The City Council of the City of Dublin ordains as follows: SECTION 1. The City Council finds as follows: 1. Cities and counties within the State of California have traditionally had the authority to issue franchises to, and thereby regulate, providers of cable services within their respective jurisdictions, in accordance with federal, state, and local law. 2. The Digital Infrastructure and Video Competition Act of2006 (Public Utilities Code sections 5800 et seq. ("DIVCA")) became effective January 1, 2007. 3. DIVCA changed California law by establishing a statewide franchising procedure for video service providers to be administered by the California Public Utilities Commission ("CPUC"). 4. Under certain circumstances described therein, DIVCA preempts the City's authority to issue franchises and provides, in those circumstances, that the CPUC is the sole authority to award statewide franchises for the provision of video services. 5. DIVCA authorizes the City to exercise certain authority over state franchise holders. 6. The City of Dublin desires to exercise that authority and to facilitate the irnplementation ofDIVCA by setting forth regulations for the provision of video service by state franchise holders within the City. SECTION 2. Chapter 3.22 is hereby added to the Dublin Municipal Code to read as follows: Chapter 3.22 VIDEO SERVICE PROVIDED BY STATE 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. Authority to Examine and Audit Business Records. ;L~.:ii If'' 0 ~/ 4/08 Attachment 1 ~ c?~t7 3.22.010 Purpose and Applicability. The purpose of this chapter is to set forth regulations for the provision of video service by state franchise holders, in accordance with the Digital Infrastructure and Video Competition Act, California Public Utilities Code sections 5800-5970 ("DIVCA"). 3.22.020 Definitions. For the purposes of this chapter, the words set out in this section shall have the following meamngs: A. "City" means the City of Dublin. B. "City Manager" means the City Manager of the City of Dublin, or his or her designee. C. "Franchise fee" shall have the meaning given that term by subdivision (g) of Public Utilities Code section 5830 or its successor. D. "Holder" shall have the meaning given that term by subdivision (j) of Public Utilities Code section 5830 or its successor. E. "Material breach" shall have the meaning given that term by subdivision (j) of Public Utilities Code section 5900 or its successor. F. "Network" shall have the meaning given that term by subdivision (I) of Public Utilities Code section 5830 or its successor. G. "PEG channels" means "public, educational, and governmental access channels" as that term is defined in Public Utilities Code section 5870 or its successor section. H. "State franchise" shall have the meaning given that term by subdivision (p) of Public .Utilities Code section 5830. 3.22.030 Fee to Support Public, Educatioual, and Government Channels. A. Each state franchise holder shall remit to the City a fee to support PEG channel facilities in the amount of one percent (1 %) ofthe gross revenues, as defined in Public Utilities Code section 5860, of the state franchise holder. The fee shall be remitted ona quarterly basis and within 45 days ofthe close of each calendar quarter. Each remittance shall be . accompanied by a summary explaining the basis for the calculation of the fee. B. Each state franchise holder shall furnish, on an annual basis, a statement within 90 days of the close of the calendar year, either audited and certified by an independent certified public accountant or certified by an officer of the state franchise holder, reflecting the total amount of gross revenues, as defined in Public Utilities Code section 5860, for the preceding calendar year, and all payments, deductions and computations used to 2 3~}7 determine the amount of the remittances required by subdivision A of this section during the preceding calendar year. The City Manager may establish, and from time to time revise, such additional reporting requirements as are necessary to ensure that the basis for the calculation of the amount of remittances are adequately explained and documented, and each state franchise holder shall comply with such additional reporting requirements provided that each franchise holder shall have first been provided written notice of such requirements at least 15 days prior to the beginning of the calendar year. C. Notwithstanding 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 reauthorized, unless the state franchise holder has given the City Manager and the City Council written notice 60 days prior to the expiration of its state franchise that the section will expire pursuant to the terms of subdivision (n) of Public 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 material breach, as that term is defined in subdivision (j) of Public Utilities Code section 5900 or its successor section, by a holder of a state franchise. B. The City Manager shall have the authority to assess penalties for any material breach bya holder of a state franchise. Prior to assessing penalties for a material breach, the City Manager shall first have provided the state franchise holder with written notice of any alleged material 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 ofthe notice to remedy the specified material breach. Ifthe material breach has not been remedied upon the expiration of this 30 day period, the City Manager may commence the assessment of penalties. In the event that a specified material breach has not been remedied following the City Manager's assessment of penalties in the maximum amount permitted per occurrence, the City Manager, after providing a subsequent written notice of the alleged material breach, may treat the continuing occurrence as a subsequent material breach. C. The City shall submit one half of any penalty amounts it receives to the Digital Divide Account established by California Public Utilities Code section 280.5. D. No monetary penalties shall be assessed for a material breach ifit is out of the reasonable control of the state franchise holder. 3.22.050 Authority to Examine State Franchise Holder's Business Records. The City Manager is hereby authorized to examine, or cause to be examined, the business records of the holder of the state franchise in accordance with subdivision (i) of Public Utilities Code section 5860. 3 ~1-IJ SECTION 3. Effective Date. This Ordinance shall take effect and be enforced thirty (30) days following its adoption. SECTION 4. Posting. The City Clerk of the City of Dublin shall cause this Ordinance to be posted in at least three (3) public places in the City of Dublin in accordance with Section 36933 of the Government Code of the State of California. PASSED, APPROVED AND ADOPTED this _ day of ,2008. AYES: NOES: ABSENT: ABSTAIN: Janet Lockhart, Mayor ATTEST: Carolyn Parkinson, Interim City Clerk 1048298.1 4 6 "{II RESOLUTION NO. - 2008 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN ********* ADOPTING A SCHEDULE OF PENALTIES FOR THE MATERIAL BREACH BY THE HOLDER OF A STATE FRANCHISE OF SERVICE STANDARDS AND OTHER STANDARDS SPECIFIED IN PUBLIC UTILITIES CODE SECTION 5900 WHEREAS, a recently enacted state law, the Digital Infrastructure and Video Competition Act of2006 (Public Utilities Code sections 5800 through 5970) ("DIVCA"), now authorizes new providers of video programming services (and incumbent cable companies under certain circumstances) to obtain state franchises that authorize them to provide such services using City rights of way in the unincorporated areas of the City, rather than obtaining a cable franchise from the City; and WHEREAS, DIVCA requires the City to adopt a schedule of penalties for any material breach by a holder of a state franchise of service standards and other standards established by subdivision (a) of Public Utilities Code section 5900, and section 42.074 of the Dublin Municipal Code indicates that the Board of Supervisors may adopt such a schedule of penalties from time to time by resolution; and WHEREAS, the City initially intends to satisfy this state law requirement by adopting a schedule of penalties that sets the amount of the penalty for all "material breaches" at the maximum amount authorized by DIVCA. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Dublin as follows: 1. Unless the context requires otherwise, all words and phrases used herein shall have the same meanings as ascribed to those words and phrases in Chapter 3.22 of the Dublin Municipal Code. 2. The penalty for any material breach, as that term is defined in section 3.22.040 of the Dublin Municipal Code, by the holder of a state franchise shall be as follows: a. Five hundred dollars ($500.00) for each day of each material breach, not to exceed one thousand five hundred dollars ($1,500.00) for an occurrence of a material breach. b. In the event that a material breach has occurred, the City has provided notice to the holder and assessed a penalty arising from such material breach, and a subsequent material breach of the same nature occurs within 12 months of the initial occurrence, the penalty shall be as follows: ATTACHMENT 2 ~~11 1. One thousand dollars ($1,000.00) for each day of each material breach, not to exceed three thousand dollars ($3,000.00) for the first such occurrence of a material breach. n. Two thousand five hundred dollars ($2,500.00) for each day of each material breach, not to exceed seven thousand five hundred dollars ($7,500.00) for the second and further such occurrence of a material breach. PASSED, APPROVED AND ADOPTED this 19th day of February, 2008. AYES: NOES: ABSENT: ABSTAIN: Mayor ATTEST: City Clerk 1056579.1 -y afl1 CITY CLERK File # [J[{]UJ[{J-8:fiJ X' (, {, t .. 'II AGENDA STATEMENT CITY COUNCIL MEETING DATE: December 5,2006 SUBJECT: Status of AT&T Project Lightspeed and Summary of Digital Infrastructure and Video Competition Act of 2006 (AB 2987) C i '" . if 1/ Ii Report Prepared by: Melissa Morton, Public Works Director, !' '" John D. Bakker, Assistant City Attorney, and Leah Peachey, City Attorney's Office ATTACHMENTS: I. 2. 3. RECOMMENDATION: ,,~. . ~L;\~ 2. FINANCIAL STATEMENT: None. Summary of Key Provisions of AB 2987 Photo of SAI box along Wineberry Way Draft Typical Conditions for AT&T Project Lightspeed Cabinet Penmts Receive Staff presentation, and Provide direction to Staff regarding (a) the issuance of encroachment permits and site work permits for Project Lightspeed facilities prior to AT&T's receipt of a state franchise, and (b) the adequacy of Staff s proposed conditions and standards for such permits. DESCRIPTION: This Staff Report is intended to provide a description of and update on AT&T's Project Lightspeed. Project Lightspeed is AT&T's initiative to upgrade its existing telephone network to allow it to provide its customers with higher speed internet access and video programming services, much like cable television. This Report also summarizes Project Lightspeed in light of the recently enacted "Digital Infrastructure and Video Competition Act of 2006" (AB 2987), which AT&T and other telecommunications companies shepherded through the Legislature this summer. This legislation provides AT&T the opportunity to seck a state franchise that allows it to provide video programming services without a cable franchise agreement with the City. State franchises will not be available until early next year, but AT&T has indicated to Staff that it would like to move forward with COPY TO: Shiyama Clunie, AT&T ------------------------------------------------------------------------------------------------------------- Page I of4 ITEM NO. ~. 3 G:\PERMITS\ENCROACH\Project Lightspeed\agst Status ATT Project Lightspeed & AB 2987 (2).DOC Attachment 3 ~ o;f /1 upgrading the telephone network in anl1Clpation of providing such services. To date, AT&T has submitted seven encroachment permit applications for Project Lightspeed-related work. Staff is seeking direction on how these requests should be handled. AT&T Proiect Lightspeed Telephone corporations such as AT&T (formerly SBC) are developing products that use the existing telephone network to provide cable television-like services, along with other broadband internet services. Project Lightspeed consists of a fiber-optic based, Internet Protocol (IP) network that will be capable of provicling integrated data, voice and video services. AT&T anticipates using the system to provide cable television-like services to its customers, as well as telephone, audio and internet services. AT&T is in the midst of rolling out Project Lightspeed in select areas of California and has informed Staff that it would like to provide these services throughout Dublin. Project Lightspeed's basic network upgrades (at the local level) involve bringing high-capacity fiber-optic cables to service area interface (SA!) cabinets that exist throughout AT&T's telephone network. Each SAI box serves between 200 and 600 homes and businesses. AT&T has indicated that there are at least 26 SAI cabinets in Dublin. From each SAI cabinet, copper telephone lines are routed to each customer's premises. The existing copper telephone lines from the SAI cabinets to the customer premises will continuc to be used for Project Lightspeed; by contrast, Verizon is completing a similar upgrade project in other parts of California where it is the local telephone provider bringing "fiber to the premises." In order to provide Project Lightspeed services to the customers served by a particular SA! box, AT&T will install a new cabinet (the so-called VRAD) near thc existing SAI cabinet. There are three such VRAD cabinets of varying sizes; the most prevalent is the 52B cabinet which can provide service to approximately 400 customers. The 52B cabinet stands approximately 63 inches high and 43 inches wide. The depth is about 20 inches. The largcr cabinet is approximately the same height but is approximately twice as deep. The length and condition of the copper lines located between the VRAD and the customer premises is the key constraint in providing the high speed data service that is necessary to provide Project Lightspeed services. It is the City's understanding that when the length of these copper lines from the VRAD to the customer premises is longer than 4,000 feet Project Lightspeed services cannot be reliably provided. In practice, this may mean that even if AT&T installs VRADs at each of the SA! cabinets in Dublin, some premises may not receive Project Lightspeed services due to this technical constraint. Existing Legal Framework (Pre AB 2987) Under state and federal law, cable television operators are required to obtain a local franchise from the franchising authority, generally the local government served by the cable operator, prior to constructing a cable system (47 U.S.C. ~ 541(b); Gov. Code, ~ 53066). The basis of the federal law franchise requirement is that the cable operator is using the public streets for its facilities. Thus, the City has a current cable franchise agreement with Comcast, which is effective until June 1,201]. By contrast, under state law, telephone corporations are not required to obtain a local franchise to provide telephone and information services. State law gives these entities the authority to construct telephone lines in and along any public right-of-way (the so-called "statewide franchise"), subject to certain time, place and manner regulations, which are discussed on page 3 of this report (Pub. Uti!. Code ~ 7901, 7901.1). Page 2 of4 q 1-' 17 New State Franchise Procedure for Video Service Providers CAB 2987) The legal framework relating to cable franchising will change significantly when AB 2987 becomes. effective on January 1, 2007. AB 2987 establishes a statewide franchising procedure for video service providers to be administered by the California Public Utilities Commission (CPUC). When it is issued a state franchise under AB 2987, AT&T will have the right to install facilities to be used for the provision of video programming services in the public rights of way without a local franchise in the same manner that telephone lines and facilities can be installed. Attachment 1 contains a more detailed description of the key provisions of AB 2987. In brief, AB 2987 contains a number of provisions designed to make franchising agencies, like Dublin, more or less whole. Thus, cities and counties in the area in which a state franchise is issued will receive the equivalent 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 addition, AB 2987 contains provisions designed to ensure that neighborhoods are not discriminated against on the basis of household income. It should also be noted that AB 2987 provides that incumbent cable operators, such as Comcast, may opt out of existing franchises once a new state franchise holder enters the jurisdiction; however, the incumbent's new state franchise would not be operative until January 2,2008. AT&T's Request to Begin Network Upgrades Before Receiving State Franchise In anticipation of obtaining a state franchise, AT&T has approached Staff to request issuance of a total of seven encroachment permit applications for VRAD cabinets. The requests include the four sites for construction ofVRAD cabinets, and three more recently-submitted applications to place VRAD cabinets in existing underground environmental vaults. AT&T does not yet have a state franchise, and therefore Staff believes that AT&T has no legal right to install facilities that will be used to provide cable services. Accordingly, the City could condition the issuance of permits on AT&T agreeing to obtain a local franchise or a state franchise prior to providing video service. AT&T has indicated that it is unwilling to accept such a condition, but points out that issuing the permits now will result in the services being available sooner than otherwise might be the case. If the issues with the siting and design of Project Lightspeed cabinets described in the section below can be resolved, Staff could issue the permits with a "reservation of rights" condition suggested by AT&T. This condition would basically provide that the pennit in no way affects AT&T and the City's positions with rcspect to whether a local franchise is required by federal or state law. Given that Staff anticipates AT&T bcing 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 requiring the facilities to bc removed if they are ever abandoned or unused for a period time that has yet to be determined.) Staff is asking for direction on whether it would be appropriate to issue permits now or whether permit issuance should be withheld until AT&T has a state franchise. Siting and Design ofProiect Lightspeed Cabinets Since the VRAD cabinets must be located near the existing SA! cabinets, Staffis concerned that in some cascs, AT&T may wish to locate the boxes in unsightly locations or in locations that substantially impact nearby residents. As an example, Attachment 2 shows the location of an SAI cabinet in a constrained Page 3 of4 10 '117 location. AT&T has indicated that it has some flexibility in placing the VRAD cabinets, but constrained sites such as the site depicted in Attachment 2 may nonetheless result in the placement of cabinets in undesirable locations. 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 construction on its telephone system is for AT&T to obtain an encroaclunent or site work pennit from the Public Works Department, and building and electrical permits if necessary. In some locations, it appears that site development review may additionally be required. Encroaclunent permits and site work permits do not involve public hearings and are issued by Staff. To date, AT&T has expressed a willingness to work with City Staff to locate the sites in acceptable locations. Although AT&T has not made any formal commitments as to a process for locating the boxes and seeking public input before submitting permits that could be controversial, AT&T has committed to such processes in other cities and would likely commit to a similar process in Dublin. Staff believes that these questions could be dealt with in the encroaclunent and site work permit process, and that it is possible to work with AT&T to site the cabinets in the most unobtrusive location given the various constraints at each individual site. City Staff has prepared a set of draft conditions that would be imposed on such permits (Attaclunent 3). Staff is seeking direction from the City Council on whether the proposed conditions are adequate to protect the interests of the City. RECOMMENDATION Staff recommends that the City Council: I) Receive Staff presentation, and 2) Provide direction to Staff regarding (a) the issuance of encroaclunent permits and site work permits for Project Lightspeed facilities prior 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 II ~J7 Summary of Key Provisions Digital Infrastructure and Video Competition Act of 2006 (AB 2987) The legal framework relating to cable franchising will change significantly when AB 2987 becomes effective as of January 1,2007. AB 2987 establishes a statewide franchising procedure for video service providers to be administered by the California Public Utilities Cornmission (CPUC) and preempts local government franchising authority under both federal and state law. (pub. Uti!. Code S 5840(a).) Thus, phone companies that are pursuing initiatives to provide video programming services, like AT&T, may seek a state franchise from the CPUC, and the City may not require a separate franchise for the provision of video services. In addition, AB 2987 provides that incumbent cable operators, such as Comcast, may opt out of existing franchises once a new state franchise holder enters the jurisdiction; however, the incumbent's new state franchise would not be operative until January 2,2008. (95930(b).) AB 2987 provides that the CPUC must begin accepting applications for a state franchise by April 1, 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 begins accepting applications in early 2007 and will be issued a state franchise shortly thereafter. The following subsections highlight the main provisions of AB 2987. Franchise Fees AB 2987 establishes a franchise fee oCfive percent of gross revenues, which the state franchise holder must calculate and remit directly to the City. (s 5840(c).) "Gross revenues" include: I) charges billed to the subscriber for cable or video service; 2) franchise fees passed on to subscribers; 3) commissions paid to the state franchise holder for product promotion (i.e. "home shopping" channels); and 4) a pro rata portion of all revenue derived from compensation arrangements for advertising. (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 attributable to video service. (9 5860(f).) Public, Educational and Governmental Channels and Facilities AB 2987 requires a state franchise holder to provide the same number of public, educational, and governmental (PEG) channels as the incumbent cable operator has activated. (s5870(a).) AB 2987 also preserves all obligations in existing franchises to provide and support PEG channel facilities and institutional networks (I-Net) and to provide cable service to community buildings, until the franchise expires. (S5870(k).) After January I, 2007, any existing unsatisfied PEG facilities or I-Net obligations will be divided among all cable or video providers on a pro rata per subscriber basis. (S5870(l).) Discrimination and Build-Out Requirements The federal Cable Act contains provisions that prohibit cable operators from discriminating on the basis of a particular residcntial neighborhood's income. AB 2987 contains provisions designed to r.nmnlu ",ith this mandate and some additional build out requircmcnts. ATTAumNT I. 0{.';f /7 AB 2987 sets forth non-discrimination requirements for all video service providers, as well as ad<1itional build-out requirements for large telephone corporations. Cs5890(a).) To comply with the non- discrimination provisions of AB 2987, state franchise holders or their affiliates with more than one million telephone customers must meet the following conditions: 1) within three years of beginning service, 25 percent of the households with access to the holder's video service are low-income households; 2) within five years of beginning service, 30 percent of the households with access to the holder's video service are low-income households; and 3) state franchise holder provides service to one community center for every 10,000 video customers. (3 5890(b).) Low-income households are those households where the average annual household income is less than $35,000. (S 58900)(2).) In contrast, state franchise holders or their affiliates with fewer than one million telephone customers must offer video service to all customers in the telephone service area within a reasonable time, as determined by the CPUC. (S 5890(c).) In addition, AB 2987 provides build-out requirements unrelated to household income for state franchise holders or their affiliates with more than one million telephone customers in California. (3 5890(e).) If a state franchise holder is predominately deploying fiber-optic facilities to the customer's premise, the holder is required to provide vidco service to between 25 percent of the customer households in the franchise holder's telephone service area within two years after it begins provicling service, and to 40 percent of those households within five years. (35890(e)(I)&(2).) AT&T's "telephone service area" is the territory in which it is the provider oflocal telephone service. G:\PERMITS\ENCROACH\Project Lightspeed\AB 2987 Sununary Key Provisions.doc 2 ATTACHMENT z. 151 11 Sample Conditions Conditions for AT&T. Permit #: Location: Permit Fee: $*** These conditions are in addition to the standard permit conditions printed on the reverse of the permit form. 1. Working hours shall be 7:30 a.m. to 5:30 p.m. Monday through Friday. Spccific hours that lane closures will be allowed for your work location are: o o o Dublin Boulevard from San Ramon Road to Dougherty Road: Lane closures, other than those of brief duration, shall not be allowed during daytime hours unless otherwise approved in writing by the City. Working hours on this portion of Dublin Boulevard shall be 8:00 p.m. to 6:00 a.m. Closure of more than one lane at a time may be allowed from 10:00 p.m. to 5:00 a.m. at the City's discretion. Other Arterial Roadways: Lane closures shall not bc allowcd prior to 9:00 a.m. or after 3:30 p.m. unless otherwise approved in writing by the City. As follows: Work outside the designated hours, as well as weekend and holiday work, will not be allowed except with prior written permission 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 prior to the beginning of work. 3. A prcconstruction meeting with the City's inspector is required prior to beginning work. 4. Trench and concrete construction shall conform to current City of Dublin standard details, which are available through the City's website at www.ci.dublin.ca.us. or for purchase at the Civic Center, 100 Civic Plaza, Dublin CA. All restoration shall conform to current City of Dublin standards. If thc paved area includes striping or marking, such shall be replaced along with final pavement. 5. Adjacent businesses or residences shall be notified in writing at least 72 hours prior to the bcginning of construction. The notice shall include the name and telephone number of at least one contact person who is able to answer public inquirics rcgarding thc work. A copy of the notice shall be provided to the City. . 6. Access to businesses or residences must be maintained. If a property has more than one driveway, only onc driveway may be closed or blocked at a time. If only one driveway serves the property, only half the driveway may be closed or blocked at a time. Property owners shall be contacted at lcast 24 hours in advance of any driveway closures or other activities affecting the property. 7. Coordinate with other work in the area. If a conflict occurs, the City of Dublin shall determine the priority. 8. Pedestrian and wheelchair access in sidewalk areas shall be maintained at all times. If a sidewalk must be temporarily closed to pedestrian traffic, an alternate routc shall be providcd and signcd appropriately in conformance with accepted standards. ATTAUlDIENT 3. !fc; ~. /'7 9. Any landscaping that is disturbed as a result of pennittee's work shall be restored to the satisfaction of the City and! or private property owner, as applicable. 10. Marking for City traffic signal, street lighting, and irrigation facilities shall be requested directly from the Public Works Department over and above USA notification. Any damage to traffic signal, street lighting, or irrigation facilities that results from pennittee's work shall be repaired operationally at once and permanently within 48 hours. The pennittee shall be responsible for obtaining an acceptable contractor to perform the work. If pennittee fails to or chooses not to make the repairs within the allotted time, the City shall make the tepairs and charge pennittee for the cost, plus administrative fees. 11. The public right of way shall be kcpt clean and swept daily, at a minimum, or as required by the City's representative. All work, e.g., cleanup, storage, and disposal of material, shall comply with environmental regulations, including the Clean Water Act. 12. Trenches and excavations shall not remain open except when permittee or permittee's contractor is present and performing work. Site security shall be to the satisfaction the City. 13. Pennittee or pennittee's contractor shall obtain a City of Dublin transportation pennit for any extra-legal vehicles or loads. 14. A City of Dublin Building Permit is required for any related electrical work, including meter (service) enclosures. 15. Work outside the public right of way shall occur in an easement that is intended for public utilities or services. Where there are no existing easements, an easement shall be. obtained from the property owner prior to beginning work. Drawings submitted with pennit applications shall include the locations of right of way lines and easement boundaries. Work outside the public right of way may be subject to a City of Dublin sitework pennit and may require installation of landscaping or other screening. Sites will be reviewed on an individual basis in terms of access, grading, drainage, and potcntial impact on adjacent property, and additional conditions may be imposed accordingly. 16. Each cabinet shall be painted with graffiti resistant paint. The existing cabinet shall also be repainted with graffiti resistant paint to match the new cabinet. 17. Each cabinet shall include contact information of the company. The information shall include the agency's address, name and phone number. The City shall also be provided with the name, address, phone number and email address of the person with the agency who is responsible for the maintenance of the exterior of the unit including the repainting of the cabinet or graffiti removal. 18. The cabinet and landscaping shall be maintained in a "like new" condition at all times. The cabinets shall be periodically inspected and repainted or landscaping replanted as necessary or as required by the Community Development Director and! or the Public Works Director. 19. Landscaping shall be installed around the sides and rear of the cabinet to screen the cabinet (s). Drought tolerant evergreen shrubs which have a minimum size of five gallons shall be planted around the cabinet. The shrubs shall be planted so as to completely screen the sides of cabinet within one year. At no time shall the landscaping be removed without the pennission of the 17 of'; J , Community Development Director. Landscaping may only be removed if replaced within two weeks by the same species. 20. In the event of the abandonment or nonuse of the improvements installed pursuant this permit, the City may order the permittee to promptly remove the improvements and restore the site to its prior condition. In the event that the permittee does not remove the improvements within 60 days (or such longer period established by the City) of being so ordered by die City, permittee agrees that the City may remove the improvements and charge the costs thereof to the permittee.