CC SR 20170502 01 - Video Provider Customer Service Standards OrdinanceRANCHO PALOS VERDES CITY COUNCIL MEETING DATE: 05/02/2017
AGENDA REPORT AGENDA HEADING: Regular Business
AGENDA DESCRIPTION:
Consideration and possible action to direct Staff to prepare a Video Provider Customer
Service Standards ordinance.
RECOMMENDED COUNCIL ACTION:
(1) Discuss the feasibility and desirability of enacting a Video Provider Customer
Service Standards ordinance pursuant to the Digital Infrastructure and Video
Competition Act and Section 13.12.310(C) of the Rancho Palos Verdes Municipal
Code.
FISCAL IMPACT: Enacting a Video Provider Customer Service Standards ordinance
would authorize the City to assess monetary penalties for material breaches of video
providers' customer service standards. Enforcement of such an ordinance may
increase the City's legal costs in the event that litigation is pursued against video
providers. Penalty revenues and legal costs are too speculative to realistically estimate
at this time.
Amount Budgeted: N/A
Additional Appropriation: N/A
Account Number(s): N/A
ORIGINATED BY: Kit Fox, AICP, Senior Administrative Analyst
REVIEWED BY: Gabriella Yap, Deputy City Manager.J�-
APPROVED BY: Doug Willmore, City Manager fes'
ATTACHED SUPPORTING DOCUMENTS:
A. RPVMC 13.12.310 (page A-1)
B. Cable Television and Video Customer Service and Information Act (page
B-1)
C. Video Customer Service Act (page C-1)
D. Digital Infrastructure and Video Competition Act (page D-1)
E. California Public Utilities Commission FAQs about DIVCA (page E-1)
BACKGROUND AND DISCUSSION:
In 1998, the City Council adopted Ordinance No. 339, the City's Telecommunications
Regulatory Ordinance, which was codified as Chapter 13.12 of the Rancho Palos
Verdes Municipal Code (RPVMC). The ordinance established regulations for cable
television systems, open video systems, and other telecommunications services and
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systems, including the procedures for granting local franchise agreements. RPVMC
Section 13.12.310(C) (Attachment A) provided the authority for the City to enact an
ordinance to establish monetary penalties for a video provider's material breach of
customer service standards set forth in the Cable Television and Video Customer
Service and Information Act (Attachment B) and the Video Customer Service Act
(Attachment C), although this authority has been superseded by recent legislation
discussed below. Under the terms of the City's previous local franchise agreement with
Cox Communications (Cox), however, the City Council did not previously feel the need
to enact such an ordinance since the franchise agreement generally provided the City
with the necessary leverage to ensure that residents' customer service issues were
dealt with appropriately by Cox.
In 2006, this all began to change with the enactment of the Digital Infrastructure and
Video Competition Act (DIVCA) (Attachment D). DIVCA shifted franchise agreement
authority from local agencies to the California Public Utilities Commission (CPUC), but
obliged local agencies to retain the responsibility for enforcing customer service
standards (Attachment E). Since the City's franchise agreement with Cox expired in
October 2015, Staff has received anecdotal reports that residents' customer service
complaints have not been addressed timely by Cox. Staff reached out to Cox's
Government Affairs Division and was advised that the City retains the option to adopt an
ordinance to impose monetary penalties for material breaches of Cox's customer
service standards under DIVCA.
Staff has researched the municipal codes of other California cities that have adopted
ordinances to establish monetary penalties for violations of customer service standards
by video providers. Most of these ordinances appear to be modeled directly after
DIVCA Section 5900 (p. D-12 of Attachment D), which states that:
• Video providers must comply with specified provisions of the Cable Television
and Video Customer Service and Information Act and the Video Customer
Service Act.
• Local jurisdictions may impose penalties of $500 per day ($1,500 maximum per
occurrence) for a material breach of these provisions, with the ability to increase
these penalties to $1,000 per day/$3,000 per occurrence and $2,500 per
day/$7,500 per occurrence in the event of second and third material breaches,
respectively, within a 12 -month period.
• Local jurisdictions must notify video providers of a material breach in writing, and
video providers have thirty (30) days from receipt to remedy the breach;
monetary penalties may be imposed if the breach is not timely remedied.
• "Material breach" is defined as any substantial and repeated failure of a video
service provider to comply with specified service quality and other standards.
Enacting a Video Provider Customer Service Standards ordinance would authorize the
City to assess monetary penalties for material breaches of video providers' customer
service standards. Hopefully, this would provide an incentive for Cox to respond to
resident complaints more fully and timely than has been the case recently.
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CONCLUSION:
As a result of the enactment of DIVCA, the City retains the responsibility for responding
to customer service complaints regarding Cox. Adopting an ordinance to allow the City
to assess monetary penalties against Cox is authorized by both DIVCA. Since the City
no longer has a local franchise agreement with Cox to use a leverage to ensure that
customer service complaints are dealt with appropriately and timely, Staff believes that
it would be appropriate to amend RPVMC Chapter 13.12 to enact a Video Provider
Customer Service Standards ordinance. In addition, since the enactment of DIVCA has
made fundamental changes in the nature of franchises for video providers, it may be
appropriate to completely overhaul Chapter 13.12 to be consistent with the provisions of
DIVCA.
ALTERNATIVES:
In addition to the Staff recommendation, the following alternative action is available for
the City Council's consideration:
Discuss and provide direction to Staff regarding the City's role in
addressing video provider customer service complaints by some means
other than a Video Provider Customer Service Standards ordinance.
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13.12.310 - Video providers—Registration—Customer service standards.
A. Unless the customer protection and customer service obligations of a video provider, as that term is
defined in Article V, are specified in a franchise, license, lease, or similar written agreement with the city,
a video provider must comply with all applicable provisions of the following state statutes:
The Cable Television and Video Customer Service and Information Act (Government Code Sections
53054, et seq.)
2. The Video Customer Service Act (Government Code Sections 53088, et seq.)
B. All video providers that are operating in the city on the effective date of the ordinance codified in this
chapter, or that intend to operate in the city after the effective date of said ordinance, must register
with the city. The registration form must include or be accompanied by the following:
1. The video provider's name, address, and local telephone numbers.
2. The names of the officers of the video provider.
3. A copy of the video provider's written policies and procedures relating to customer service
standards and the handling of customer complaints, as required by Government Code Sections
53054, et seq. These customer service standards must include, without limitation, standards
regarding the following:
Installation, disconnection, service and repair obligations, employee identification, and service
call response time and scheduling.
b. Customer telephone and office hours.
c. Procedures for billing, charges, refunds, and credits.
d. Procedures for termination of service.
e. Notice of the deletion of a programming service, the changing of channel assignments, or an
increase in rates.
Complaint procedures and procedures for bill dispute resolution.
g. The video provider's written commitment to distribute annually to the city, and to its
employees and customers, a notice describing the customer service standards specified above
in subsections (13)(3)(a) through (f) of this section. This annual notice must include the report of
the video provider on its performance in meeting its customer service standards, as required
by Government Code Section 53055.2.
4. Unless a video provider is exempt under federal law from its payment, a registration fee in an
amount established by resolution of the city council to cover the reasonable costs incurred by the
city in reviewing and processing the registration form.
5. In addition to the registration fee specified above in subsection (13)(4) of this section, the written
commitment of the video provider to pay to the city, when due, all costs and expenses reasonably
incurred by the city in resolving any disputes between the video provider and its subscribers, which
dispute resolution is mandated by Government Code Section 53088.2(o).
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C. The city council may establish by ordinance a schedule of monetary penalties for the material breach by
a video provider of its obligations under subparagraphs (a) through (n) of Government Code Section
53088.2. As used herein, the term "material breach" means any substantial and repeated failure to
comply with the consumer service standards set forth in Government Code Section 53088.2. The
provisions of that ordinance must be consistent with the provisions of Government Code Section
53088.2. The schedule of monetary penalties may also impose a penalty, as authorized by Government
Code Section 53056(x), for the failure of a video provider to distribute the annual notice required by
Government Code Section 53055.1, which penalty may not exceed $500 for each year in which the
notice is not distributed as required by state statute.
(Ord. 339 § 2 (part), 1998)
A-2
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GOVERNMENT CODE - GOV
TITLE 5. LOCAL AGENCIES [50001 - 57550] ( Title 5 added by Stats. 1949, Ch. 81. )
DIVISION 2. CITIES, COUNTIES, AND OTHER AGENCIES [53000 - 55821] ( Division 2 added by Stats. 1949, Ch. 81
PART 1. POWERS AND DUTIES COMMON TO CITIES, COUNTIES, AND OTHER AGENCIES [53000 - 54999.7]
Part 1 added by Stats. 1949, Ch. 81. )
CHAPTER 1. General [53000 - 53166] ( Chapter 1 added by Stats. 1949, Ch. 81. )
ARTICLE 3.5. Cable Television and Video Provider Customer Service and Information Act [53054 - 53056] ( Article 3.5
added by Stats. 1992, Ch. 262, Sec. 1. )
53054. This act shall be known and may be cited as the Cable Television and Video Provider Customer Service and
Information Act.
(Added by Stats. 1992, Ch. 262, Sec. 1. Effective January 1, 1993.)
53054.1. The Legislature finds and declares all of the following:
(a) In an unregulated environment, customers of cable and video providers should get their money's worth for the
service they subscribe to, and one way to ensure this is to encourage that customer service standards be
established and that customers be informed to those standards.
(b) Cable television and video providers have made efforts to provide high-quality service to their customers. Cable
television and video providers should continue to establish standards for customer service so as to further the
development of high-quality customer service.
(c) It is not the intent of this article to establish standards for customer service, but to encourage cable television
and video providers to inform their customers about the standards they have established and to work to achieve
these customer service goals.
(Added by Stats. 1992, Ch. 262, Sec. 1. Effective January 1, 1993.)
53054.2. As used in this article:
(a) "Cable television operator" means the person or entity providing cable television services through the cable
television system.
(b) "Cable television system" means a community antenna television system, under common ownership and
control, serving a franchise area or two or more contiguous or electronically connected franchise areas.
(c) "Video provider" means any person, company, or service which provides one or more channels of video
programming to a residence, including a home, condominium, apartment, or mobilehome, where some fee is paid,
whether directly or as included in dues or rental charges, for that service, whether or not public rights-of-way are
utilized in the delivery of the video programming. A "video provider" shall include, but not be limited to, providers of
cable television, master antenna television, satellite master antenna television, direct broadcast satellite,
multipoint distribution service, and other providers of video programming, whatever their technology.
(Added by Stats. 1992, Ch. 262, Sec. 1. Effective January 1, 1993.)
53055. Each cable television operator or video provider in the state shall establish customer service standards.
These customer service standards shall include, but not be limited to, standards regarding the following:
(a) Installation, disconnection, service and repair obligations, employee identification and service call response
time and scheduling.
(b) Customer telephone and office hours; procedures for billing, charges, refunds, and credits.
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(c) Procedures for termination of service.
(d) Notice of the deletion of a programming service, the changing of channel assignments, or an increase in rates.
(e) Complaint procedures and procedures for bill dispute resolution.
(Added by Stats. 1992, Ch. 262, Sec. 1. Effective January 1, 1993.)
53055.1. (a) Each cable television operator or video provider shall annually distribute to employees, to each
customer, and to the city, county, or city and county in which the cable television operator or video provider
furnishes service to customers, a notice describing these customer service standards. New customers shall also be
provided with this notice when service is initiated.
(b) The notice given to new customers pursuant to this section shall include, in addition to all of the information
described in subdivisions (a) to (e), inclusive, of Section 53055, all of the following:
(1) A listing of the services offered by the cable television operator or video provider which clearly describes all
levels of service, and including the rates for each level of service, provided that, if the information concerning levels
of service and rates is otherwise distributed to new customers upon installation by the cable television operator or
video provider, the information need not be included in the notice to new customers required by this section.
(2) The telephone number or numbers through which customers may subscribe to, change, or terminate service,
request customer service, or seek general or billing information.
(3) A description of the rights and remedies which the cable television operator or video provider may make
available to its customers if the cable television operator or video provider does not materially meet its customer
service standards.
(Added by Stats. 1992, Ch. 262, Sec. 1. Effective January 1, 1993.)
53055.2. After the customer service standards established pursuant to Section 53055 have been in effect for one
year, each cable television operator and video provider shall report annually on the performance of that cable
television operator or video provider with regard to meeting its customer service standards. This report shall be
included in the annual notice required by Section 53055.1.
(Added by Stats. 1992, Ch. 262, Sec. 1. Effective January 1, 1993.)
53055.3. No provision of this article shall be construed to preempt the prerogative of a city, county, or city and
county to enforce customer protection standards that are contained in a franchise or license granted to a cable
television operator or video provider pursuant to Section 53066.1 or that are otherwise authorized by law for other
cable television operators or video providers.
(Added by Stats. 1992, Ch. 262, Sec. 1. Effective January 1, 1993.)
53056. (a) The legislative body of the city, county, or city and county in which the cable television operator or video
provider furnishes service to customers may, by ordinance, provide a schedule of penalties for the failure of the
cable television operator or video provider to distribute the annual notice required by Section 53055.1, not to
exceed five hundred dollars ($500) for each year in which the notice is not distributed to all customers.
(b) The city, county, or city and county shall give a cable television operator or video provider written notice of any
alleged failure to distribute to all customers the annual notice required by Section 53055.1 before imposing any
penalty pursuant to subdivision (a). If the cable television operator or video provider distributes this notice to all
customers within 60 days after receipt of the notice from the city, county, or city and county pursuant to this
subdivision, no penalty shall be imposed upon the cable television operator or video provider pursuant to
subdivision (a).
(Added by Stats. 1992, Ch. 262, Sec. 1. Effective January 1, 1993.)
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GOVERNMENT CODE - GOV
TITLE 5. LOCAL AGENCIES [50001 - 57550] ( Title 5 added by Stats. 1949, Ch. 81. )
DIVISION 2. CITIES, COUNTIES, AND OTHER AGENCIES [53000 - 55821] ( Division 2 added by Stats. 1949, Ch. 81
PART 1. POWERS AND DUTIES COMMON TO CITIES, COUNTIES, AND OTHER AGENCIES [53000 - 54999.7]
Part 1 added by Stats. 1949, Ch. 81. )
CHAPTER 1. General [53000 - 53166] ( Chapter 1 added by Stats. 1949, Ch. 81. )
ARTICLE 4.5. Video Customer Service Act [53088 - 53088.2] ( Article 4.5 added by Stats. 1992, Ch. 1198, Sec. 1. )
53088. This article shall be known and may be cited as the Video Customer Service Act.
(Added by Stats. 1992, Ch. 1198, Sec. 1. Effective January 1, 1993.)
53088.1. (a) "Video provider" means any person, company, or service which provides one or more channels of video
programming to a residence, including a home, condominium, or apartment where some fee is paid, whether
directly or as included in dues or rental charges, for that service, whether or not public rights-of-way are utilized in
the delivery of the video programming. A "video provider" shall include, but not be limited to, providers of cable
television, master antenna television, satellite master antenna television, direct broadcast satellite, multipoint
distribution services, and other providers of video programming, whatever their technology. A video provider shall
not include a landlord providing only broadcast video programming to a single-family home or other residential
dwelling consisting of four units or less.
(b) "Material breach" means any substantial and repeated failure to comply with the consumer service standards
set forth in Section 53088.2.
(Added by Stats. 1992, Ch. 1198, Sec. 1. Effective January 1, 1993.)
53088.2. (a) Every video provider shall render reasonably efficient service, make repairs promptly, and interrupt
service only as necessary.
(b) All video provider personnel contacting subscribers or potential subscribers outside the office of the provider
shall be clearly identified as associated with the video provider.
(c) At the time of installation, and annually thereafter, all video providers shall provide to all customers a written
notice of the programming offered, the prices for that programming, the provider's installation and customer service
policies, and the name, address, and telephone number of the local franchising authority.
(d) All video providers shall have knowledgeable, qualified company representatives available to respond to
customer telephone inquiries Monday to Friday, inclusive, excluding holidays, during normal business hours.
(e) All video providers shall provide to customers a toll-free or local telephone number for installation, and service,
and complaint calls. These calls shall be answered promptly by the video providers. The city, county, or city and
county may establish standards for what constitutes promptness.
(f) All video providers shall render bills that are accurate and understandable.
(g) All video providers shall respond to a complete outage in a customer's service promptly. The response shall
occur within 24 hours of the reporting of the outage to the provider, except in those situations beyond the
reasonable control of the video provider. A video provider shall be deemed to respond to a complete outage when a
company representative arrives at the outage location within 24 hours and begins to resolve the problem.
(h) All video providers shall provide a minimum of 30 days' written notice before increasing rates or deleting
channels. All video providers shall make every reasonable effort to submit the notice to the city, county, or city and
county in advance of the distribution to customers. The 30 -day notice is waived if the increases in rates or deletion
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of channels were outside the control of the video provider. In those cases the video provider shall make reasonable
efforts to provide customers with as much notice as possible.
(i) Every video provider shall allow every residential customer who pays his or her bill directly to the video provider
at least 15 days from the date the bill for services is mailed to the customer, to pay the listed charges unless
otherwise agreed to pursuant to a residential rental agreement establishing tenancy. Customer payments shall be
posted promptly. No video provider may terminate residential service for nonpayment of a delinquent account
unless the video provider furnishes notice of the delinquency and impending termination at least 15 days prior to
the proposed termination. The notice shall be mailed, postage prepaid, to the customer to whom the service is
billed. Notice shall not be mailed until the 16th day after the date the bill for services was mailed to the customer.
The notice of delinquency and impending termination may be part of a billing statement. No video provider may
assess a late fee any earlier than the 22nd day after the bill for service has been mailed.
(j) Every notice of termination of service pursuant to subdivision (i) shall include all of the following information:
(1) The name and address of the customer whose account is delinquent.
(2) The amount of the delinquency.
(3) The date by which payment is required in order to avoid termination of service.
(4) The telephone number of a representative of the video provider who can provide additional information and
handle complaints or initiate an investigation concerning the service and charges in question.
Service may only be terminated on days in which the customer can reach a representative of the video provider
either in person or by telephone.
(k) Any service terminated without good cause shall be restored without charge for the service restoration. Good
cause includes, but is not limited to, failure to pay, payment by check for which there are insufficient funds, theft of
service, abuse of equipment or system personnel, or other similar subscriber actions.
(1) A video provider shall cease charging a customer for services within seven business days of receiving a request
to terminate service. If the customer requests that service be terminated and provides seven or more business
day's notice before the date for termination of service, the video provider shall cease charging the customer for
additional services as of midnight of the last day of service. Nothing in this subdivision shall prohibit a video
provider from billing for charges incurred by the customer prior to the date for termination of service.
(m) All video providers shall issue requested refund checks promptly, but no later than 45 days following the
resolution of any dispute, and following the return of the equipment supplied by the video provider, if service is
terminated.
(n) All video providers shall issue security or customer deposit refund checks promptly, but no later than 45 days
following the termination of service, less any deductions permitted by law.
(o) Video providers shall not disclose the name and address of a subscriber for commercial gain to be used in
mailing lists or for other commercial purposes not reasonably related to the conduct of the businesses of the video
providers or their affiliates, unless the video providers have provided to the subscriber a notice, separate or
included in any other customer notice, that clearly and conspicuously describes the subscriber's ability to prohibit
the disclosure. Video providers shall provide an address and telephone number for a local subscriber to use without
toll charge to prevent disclosure of the subscriber's name and address.
(p) Disputes concerning the provisions of this article shall be resolved by the city, county, or city and county in
which the customer resides. For video providers under Section 53066, the franchising authority shall resolve
disputes. All other video providers shall register with the city in which they provide service or, where the customers
reside in an unincorporated area, in the county in which they provide service. The registration shall include the
name of the company, its address, its officers, telephone numbers, and customer service and complaint procedures.
Counties and cities may charge these other video providers operating in the state a fee to cover the reasonable
cost of administering this division.
(q) Nothing in this division limits any power of a city, county, or city and county or video provider to adopt and
enforce service standards and consumer protection standards that exceed those established in this division.
(r) The legislative body of the city, county, or city and county, may, by ordinance, provide a schedule of penalties
for the material breach by a video provider of subdivisions (a) to (p), inclusive. No monetary penalties shall be
assessed for a material breach if the breach is out of the reasonable control of the video provider. Further, no
monetary penalties may be imposed prior to the effective date of this section. Any schedule of monetary penalties
adopted pursuant to this section shall in no event exceed two hundred dollars ($200) for each day of each material
breach, not to exceed six hundred dollars ($600) for each occurrence of material breach. However, if a material
breach of any of subdivisions (a) to (p), inclusive, has occurred and the city, county, or city and county has
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provided notice and a fine or penalty has been assessed, in a subsequent material breach of the same nature
occurring within 12 months, the penalties may be increased by the city, county, or city and county to a maximum of
four hundred dollars ($400) for each day of each material breach, not to exceed one thousand two hundred dollars
($1,200) for each occurrence of the material breach. If a third or further material breach of the same nature occurs
within those same 12 months, and the city, county, or city and county has provided notice and a fine or penalty has
been assessed, the penalties may be increased to a maximum of one thousand dollars ($1,000) for each day of
each material breach, not to exceed three thousand dollars ($3,000) for each occurrence of the material breach.
With respect to video providers subject to a franchise or license, any monetary penalties assessed under this
section shall be reduced dollar for dollar to the extent any liquidated damage or penalty provision of a current cable
television ordinance, franchise contract, or license agreement imposes a monetary obligation upon a video provider
for the same customer service failures, and no other monetary damages may be assessed. However, this section
shall in no way affect the right of franchising authorities concerning assessment or renewal of a cable television
franchise under the provisions of the Cable Communications Policy Act of 1984 (47 U.S.C. Sec. 521 et seq.).
(s) If the legislative body of a city, county, or city and county adopts a schedule of monetary penalties pursuant to
subdivision (q), the following procedures shall be followed:
(1) The city, county, or city and county shall give the video provider written notice of any alleged material breaches
of the consumer service standards of this division and allow the video provider at least 30 days from receipt of the
notice to remedy the specified breach.
(2) A material breach for the purposes of assessing penalties shall be deemed to have occurred for each day,
following the expiration of the period specified in paragraph (1), that any material breach has not been remedied by
the video provider, irrespective of the number of customers affected.
(t) Notwithstanding subdivision (o), or any other provision of law, this section shall not preclude a party affected by
this section from utilizing any judicial remedy available to that party without regard to this section. Actions taken
by a local legislative body, including a franchising authority, pursuant to this section shall not be binding upon a
court of law. For this purpose, a court of law may conduct de novo review of any issues presented.
(Amended by Stats. 2005, Ch. 429, Sec. 1. Effective January 1, 2006.)
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PUBLIC UTILITIES CODE - PUC
DIVISION 2.5. THE DIGITAL INFRASTRUCTURE AND VIDEO COMPETITION ACT OF 2006 [5800 - 5970] ( Division 2.5
added by Stats. 2006, Ch. 700, Sec. 3. )
5800. This act shall be known and may be cited as the Digital Infrastructure and Video Competition Act of 2006.
(Added by Stats. 2006, Ch. 700, Sec. 3. Effective January 1, 2007)
5810. (a) The Legislature finds and declares all of the following:
(1) Increasing competition for video and broadband services is a matter of statewide concern for all of the following
reasons:
(A) Video and cable services provide numerous benefits to all Californians including access to a variety of news,
public information, education, and entertainment programming.
(B) Increased competition in the cable and video service sector provides consumers with more choice, lowers
prices, speeds the deployment of new communication and broadband technologies, creates jobs, and benefits the
California economy.
(C) To promote competition, the state should establish a state -issued franchise authorization process that allows
market participants to use their networks and systems to provide video, voice, and broadband services to all
residents of the state.
(D) Competition for video service should increase opportunities for programming that appeals to California's diverse
population and many cultural communities.
(2) Legislation to develop this new process should adhere to the following principles:
(A) Create a fair and level playing field for all market competitors that does not disadvantage or advantage one
service provider or technology over another.
(B) Promote the widespread access to the most technologically advanced cable and video services to all California
communities in a nondiscriminatory manner regardless of socioeconomic status.
(C) Protect local government revenues and control of public rights-of-way.
(D) Require market participants to comply with all applicable consumer protection laws.
(E) Complement efforts to increase investment in broadband infrastructure and close the digital divide.
(F) Continue access to and maintenance of the public, education, and government (PEG) channels.
(G) Maintain all existing authority of the California Public Utilities Commission as established in state and federal
statutes.
(3) The public interest is best served when sufficient funds are appropriated to the commission to provide adequate
staff and resources to appropriately and timely process applications of video service providers and to ensure full
compliance with the requirements of this division. It is the intent of the Legislature that, although video service
providers are not public utilities or common carriers, the commission shall collect any fees authorized by this
division in the same manner and under the same terms as it collects fees from common carriers, electrical
corporations, gas corporations, telephone corporations, telegraph corporations, water corporations, and every other
public utility providing service directly to customers or subscribers subject to its jurisdiction such that it does not
discriminate against video service providers or their subscribers.
(4) Providing an incumbent cable operator the option to secure a state -issued franchise through the preemption of
an existing cable franchise between a cable operator and any political subdivision of the state, including, but not
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limited to, a charter city, county, or city and county, is an essential element of the new regulatory framework
established by this act as a matter of statewide concern to best ensure equal protection and parity among
providers and technologies, as well as to achieve the goals stated by the Legislature in enacting this act.
(b) It is the intent of the Legislature that a video service provider shall pay as rent a franchise fee to the local
entity in whose jurisdiction service is being provided for the continued use of streets, public facilities, and other
rights-of-way of the local entity in order to provide service. The Legislature recognizes that local entities should be
compensated for the use of the public rights-of-way and that the franchise fee is intended to compensate them in
the form of rent or a toll, similar to that which the court found to be appropriate in Santa Barbara County Taxpayers
Association v. Board of Supervisors for the County of Santa Barbara (1989) 209 Cal. App. 3d 940.
(c) It is the intent of the Legislature that collective bargaining agreements be respected.
(d) It is the intent of the Legislature that the definition of gross revenues in this division shall result in local entities
maintaining their existing level of revenue from franchise fees.
(Amended by Stats. 2007, Ch. 123, Sec. 1. Effective January 1, 2008.)
5820. (a) Nothing in this division shall be deemed as creating a vested right in a state -issued franchise by the
franchise holder or its affiliates that would preclude the state from amending the provisions that establish the terms
and conditions of a franchise.
(b) Nothing in this division shall be construed to eliminate or reduce a telephone corporation's or video service
provider's obligations under any applicable state or federal environmental protection laws. The local entity shall
serve as the lead agency for any environmental review under this division and may impose conditions to mitigate
environmental impacts of the applicant's use of the public rights-of-way that may be required pursuant to the
California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resources Code).
(c) The holder of a state franchise shall not be deemed a public utility as a result of providing video service under
this division. This division shall not be construed as granting authority to the commission to regulate the rates,
terms, and conditions of video services, except as explicitly set forth in this division.
(Added by Stats. 2006, Ch. 700, Sec. 3. Effective January 1, 2007.)
5830. For purposes of this division, the following words have the following meanings:
(a) "Broadband" means any service defined as broadband in the most recent Federal Communications Commission
inquiry pursuant to Section 706 of the Telecommunications Act of 1996 (P.L. 104-104).
(b) "Cable operator" means any person or group of persons that either provides cable service over a cable system
and directly, or through one or more affiliates, owns a significant interest in a cable system; or that otherwise
controls or is responsible for, through any arrangement, the management and operation of a cable system, as set
forth in Section 522(5) of Title 47 of the United States Code.
(c) "Cable service" is defined as the one-way transmission to subscribers of either video programming, or other
programming service, and subscriber interaction, if any, that is required for the selection or use of video
programming or other programming service, as set forth in Section 522(6) of Title 47 of the United States Code.
(d) "Cable system" is defined as set forth in Section 522(7) of Title 47 of the United States Code.
(e) "Commission" means the Public Utilities Commission.
(f) "Franchise" means an initial authorization, or renewal of an authorization, issued by a franchising entity,
regardless of whether the authorization is designated as a franchise, permit, license, resolution, contract,
certificate, agreement, or otherwise, that authorizes the construction and operation of any network in the right-of-
way capable of providing video service to subscribers.
(g) "Franchise fee" means the fee adopted pursuant to Section 5840.
(h) "Holder" or "holder of a state franchise" means a person or group of persons that has been issued a state
franchise from the commission pursuant to this division.
(i) "Incumbent cable operator" means a cable operator or OVS serving subscribers under a franchise in a particular
city, county, or city and county franchise area on January 1, 2007.
(j) "Local entity" means any city, county, city and county, or joint powers authority within the state within whose
jurisdiction a holder of a state franchise under this division may provide cable service or video service.
(k) "Local franchising entity" means the city, county, city and county, or joint powers authority entitled to require
franchises and impose fees on cable operators, as set forth in Section 53066 of the Government Code.
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(1) "Network" means a component of a facility that is wholly or partly physically located within a public right-of-way
and that is used to provide video service, cable service, voice, or data services.
(m) "Open -video system" or "OVS" means those services set forth in Section 573 of Title 47 of the United States
Code.
(n) "OVS operator" means any person or group of persons that either provides cable service over an open -video
system directly, or through one or more affiliates, owns a significant interest in an open -video system, or that
otherwise controls or is responsible for, through any arrangement, the management of an open -video system.
(o) "Public rights-of-way" means the area along and upon any public road or highway, or along or across any of the
waters or lands within the state.
(p) "State franchise" means a franchise that is issued pursuant to this division.
(q) "Subscriber" means a person who lawfully receives video service from the holder of a state franchise for a fee.
(r) "Video programming" means programming provided by, or generally considered comparable to programming
provided by, a television broadcast station, as set forth in Section 522(20) of Title 47 of the United States Code.
(s) "Video service" means video programming services, cable service, or OVS service provided through facilities
located at least in part in public rights-of-way without regard to delivery technology, including Internet protocol or
other technology. This definition does not include (1) any video programming provided by a commercial mobile
service provider defined in Section 332(d) of Title 47 of the United States Code, or (2) video programming provided
as part of, and via, a service that enables users to access content, information, electronic mail, or other services
offered over the public Internet.
(t) "Video service provider" means an entity providing video service.
(Amended by Stats. 2007, Ch. 123, Sec. 2. Effective January 1, 2008.)
5840. (a) The commission is the sole franchising authority for a state franchise to provide video service under this
division. Neither the commission nor any local franchising entity or other local entity of the state may require the
holder of a state franchise to obtain a separate franchise or otherwise impose any requirement on any holder of a
state franchise except as expressly provided in this division. Sections 53066, 53066.01, 53066.2, and 53066.3 of
the Government Code shall not apply to holders of a state franchise.
(b) The application process described in this section and the authority granted to the commission under this section
shall not exceed the provisions set forth in this section.
(c) Any person or corporation who seeks to provide video service in this state for which a franchise has not already
been issued, after January 1, 2008, shall file an application for a state franchise with the commission. The
commission may impose a fee on the applicant that shall not exceed the actual and reasonable costs of processing
the application and shall not be levied for general revenue purposes.
(d) No person or corporation shall be eligible for a state -issued franchise, including a franchise obtained from
renewal or transfer of an existing franchise, if that person or corporation is in violation of any final nonappealable
order relating to either the Cable Television and Video Provider Customer Service and Information Act (Article 3.5
(commencing with Section 53054) of Chapter 1 of Part 1 of Division 2 of Title 5 of the Government Code) or the
Video Customer Service Act (Article 4.5 (commencing with Section 53088) of Chapter 1 of Part 1 of Division 2 of
Title 5 of the Government Code).
(e) The application for a state franchise shall be made on a form prescribed by the commission and shall include all
of the following:
(1) A sworn affidavit, signed under penalty of perjury by an officer or another person authorized to bind the
applicant, that affirms all of the following:
(A) That the applicant has filed or will timely file with the Federal Communications Commission all forms required by
the Federal Communications Commission before offering cable service or video service in this state.
(B) That the applicant or its affiliates agrees to comply with all federal and state statutes, rules, and regulations,
including, but not limited to, the following:
(i) A statement that the applicant will not discriminate in the provision of video or cable services as provided in
Section 5890.
(ii) A statement that the applicant will abide by all applicable consumer protection laws and rules as provided in
Section 5900.
(iii) A statement that the applicant will remit the fee required by subdivision (a) of Section 5860 to the local entity.
(iv) A statement that the applicant will provide PEG channels and the required funding as required by Sect{ 5§0.
(C) That the applicant agrees to comply with all lawful city, county, or city and county regulations regarding the
time, place, and manner of using the public rights-of-way, including, but not limited to, payment of applicable
encroachment, permit, and inspection fees.
(D) That the applicant will concurrently deliver a copy of the application to any local entity where the applicant will
provide service.
(2) The applicant's legal name and any name under which the applicant does or will do business in this state.
(3) The address and telephone number of the applicant's principal place of business, along with contact information
for the person responsible for ongoing communications with the commission.
(4) The names and titles of the applicant's principal officers.
(5) The legal name, address, and telephone number of the applicant's parent company, if any.
(6) A description of the video service area footprint that is proposed to be served, as identified by a collection of
United States Census Bureau Block numbers (13 digit) or a geographic information system digital boundary meeting
or exceeding national map accuracy standards. This description shall include the socioeconomic status information
of all residents within the service area footprint.
(7) If the applicant is a telephone corporation or an affiliate of a telephone corporation, as defined in Section 234, a
description of the territory in which the company provides telephone service. The description shall include
socioeconomic status information of all residents within the telephone corporation's service territory.
(8) The expected date for the deployment of video service in each of the areas identified in paragraph (6).
(9) Adequate assurance that the applicant possesses the financial, legal, and technical qualifications necessary to
construct and operate the proposed system and promptly repair any damage to the public right-of-way caused by
the applicant. To accomplish these requirements, the commission may require a bond.
(f) The commission may require that a corporation with wholly owned subsidiaries or affiliates is eligible only for a
single state -issued franchise and prohibit the holding of multiple franchises through separate subsidiaries or
affiliates. The commission may establish procedures for a holder of a state -issued franchise to amend its franchise
to reflect changes in its service area.
(g) The commission shall commence accepting applications for a state franchise no later than April 1, 2007.
(h) (1) The commission shall notify an applicant for a state franchise and any affected local entities whether the
applicant's application is complete or incomplete before the 30th calendar day after the applicant submits the
application.
(2) If the commission finds the application is complete, it shall issue a state franchise before the 14th calendar day
after that finding.
(3) If the commission finds that the application is incomplete, it shall specify with particularity the items in the
application that are incomplete and permit the applicant to amend the application to cure any deficiency. The
commission shall have 30 calendar days from the date the application is amended to determine its completeness.
(4) The failure of the commission to notify the applicant of the completeness or incompleteness of the application
before the 44th calendar day after receipt of an application shall be deemed to constitute issuance of the certificate
applied for without further action on behalf of the applicant.
(i) The state franchise issued by the commission shall contain all of the following:
(1) A grant of authority to provide video service in the service area footprint as requested in the application.
(2) A grant of authority to use the public rights-of-way, in exchange for the franchise fee adopted under subdivision
(q), in the delivery of video service, subject to the laws of this state.
(3) A statement that the grant of authority is subject to lawful operation of the cable service or video service by
the applicant or its successor in interest.
(j) The state franchise issued by the commission may be terminated by the video service provider by submitting at
least 90 days prior written notice to subscribers, local entities, and the commission.
(k) It is unlawful to provide video service without a state or locally issued franchise.
(1) Subject to the notice requirements of this division, a state franchise may be transferred to any successor in
interest of the holder to which the certificate is originally granted, provided that the transferee first submits all of
the information required of the applicant by this section to the commission and is in compliance with Section 5970.
(m) In connection with, or as a condition of, receiving a state franchise, the commission shall require a holder to
notify the commission and any applicable local entity within 14 business days of any of the following changes
involving the holder of the state franchise:
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(1) Any transaction involving a change in the ownership, operation, control, or corporate organization of the holder,
including a merger, an acquisition, or a reorganization.
(2) A change in the holder's legal name or the adoption of, or change to, an assumed business name. The holder
shall submit to the commission a certified copy of either of the following:
(A) The proposed amendment to the state franchise.
(B) The certificate of assumed business name.
(3) A change in the holder's principal business address or in the name of the person authorized to receive notice on
behalf of the holder.
(4) Any transfer of the state franchise to a successor in interest of the holder. The holder shall identify the
successor in interest to which the transfer is made.
(5) The termination of any state franchise issued under this division. The holder shall identify both of the following:
(A) The number of subscribers in the service area covered by the state franchise being terminated.
(B) The method by which the holder's subscribers were notified of the termination.
(6) A change in one or more of the service areas of the holder of a state franchise pursuant to this division that
would increase or decrease the territory within the service area. The holder shall describe the new boundaries of
the affected service areas after the proposed change is made.
(n) Prior to offering video service in a local entity's jurisdiction, the holder of a state franchise shall notify the local
entity that the video service provider will provide video service in the local entity's jurisdiction. The notice shall be
given at least 10 days, but no more than 60 days, before the video service provider begins to offer service.
(o) Any video service provider that currently holds a franchise with a local franchising entity is entitled to seek a
state franchise in the area designated in that franchise upon meeting any of the following conditions:
(1) The expiration, prior to any renewal or extension, of its local franchise.
(2) A mutually agreed upon date set by both the local franchising entity and video service provider to terminate the
franchise provided in writing by both parties to the commission.
(3) When a video service provider that holds a state franchise provides the notice required pursuant to subdivision
(n) to a local jurisdiction that it intends to initiate providing video service in all or part of that jurisdiction, a video
service provider operating under a franchise issued by a local franchising entity may elect to obtain a state
franchise to replace its locally issued franchise. The franchise issued by the local franchising entity shall terminate
and be replaced by a state franchise when the commission issues a state franchise for the video service provider
that includes the entire service area served by the video service provider and the video service provider notifies
the local entity that it will begin providing video service in that area under a state franchise.
(p) Notwithstanding any rights to the contrary, an incumbent cable operator opting into a state franchise under this
section shall continue to serve all areas as required by its local franchise agreement existing on January 1, 2007,
until that local franchise otherwise would have expired. However, an incumbent cable operator that is also a
telephone corporation with less than 1,000,000 telephone customers in California and is providing video service in
competition with another incumbent cable operator shall not be required to provide service beyond the area in
which it is providing video service as of January 1, 2007.
(q) (1) There is hereby adopted a state franchise fee payable as rent or a toll for the use of the public rights-of-way
by holders of the state franchise issued pursuant to this division. The amount of the state franchise fee shall be 5
percent of gross revenues, as defined in subdivision (d) of Section 5860, or the percentage applied by the local
entity to the gross revenue of the incumbent cable operator, whichever is less. If there is no incumbent cable
operator or upon the expiration of the incumbent cable operator's franchise, the amount of the state franchise fee
shall be 5 percent of gross revenues, as defined in subdivision (d) of Section 5860, unless the local entity adopts an
ordinance setting the amount of the franchise fee at less than 5 percent.
(2) (A) The state franchise fee shall apply equally to all video service providers in the local entity's jurisdiction.
(B) Notwithstanding subparagraph (A), if the video service provider is leasing access to a network owned by a local
entity, the local entity may set a franchise fee for access to the network different from the franchise fee charged to
a video service provider for access to the rights-of-way to install its own network.
(Amended by Stats. 2007, Ch. 123, Sec. 3. Effective January 1, 2008.)
5850. (a) A state -issued franchise shall only be valid for 10 years after the date of issuance, and the holder shall
apply for a renewal of the state franchise for an additional 10 -year period if it wishes to continue to provide video
services in the area covered by the franchise after the expiration of the franchise.
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(b) Except as provided in this section, the criteria and process described in Section 5840 shall apply to a renewal
registration, and the commission shall not impose any additional or different criteria.
(c) Renewal of a state franchise shall be consistent with federal law and regulations.
(d) The commission shall not renew the franchise if the video service provider is in violation of any final
nonappealable court order issued pursuant to this division.
(Amended by Stats. 2007, Ch. 123, Sec. 4. Effective January 1, 2008.)
5860. (a) The holder of a state franchise that offers video service within the jurisdiction of the local entity shall
calculate and remit to the local entity a state franchise fee, adopted pursuant to subdivision (q) of Section 5840, as
provided in this section. The obligation to remit the franchise fee to a local entity begins immediately upon
provision of video service within that local entity's jurisdiction. However, the remittance shall not be due until the
time of the first quarterly payment required under subdivision (h) that is at least 180 days after the provision of
service began. The fee remitted to a city or city and county shall be based on gross revenues, as defined in
subdivision (d), derived from the provision of video service within that jurisdiction. The fee remitted to a county
shall be based on gross revenues earned within the unincorporated area of the county. No fee under this section
shall become due unless the local entity provides documentation to the holder of the state franchise supporting the
percentage paid by the incumbent cable operator serving the area within the local entity's jurisdiction. The fee shall
be calculated as a percentage of the holder's gross revenues, as defined in subdivision (d). The fee remitted to the
local entity pursuant to this section may be used by the local entity for any lawful purpose.
(b) The state franchise fee shall be a percentage of the holder's gross revenues, as defined in subdivision (d).
(c) No local entity or any other political subdivision of this state may demand any additional fees or charges or
other remuneration of any kind from the holder of a state franchise based solely on its status as a provider of video
or cable services other than as set forth in this division and may not demand the use of any other calculation
method or definition of gross revenues. However, nothing in this section shall be construed to limit a local entity's
ability to impose utility user taxes and other generally applicable taxes, fees, and charges under other applicable
provisions of state law that are applied in a nondiscriminatory and competitively neutral manner.
(d) For purposes of this section, the term "gross revenues" means all revenue actually received by the holder of a
state franchise, as determined in accordance with generally accepted accounting principles, that is derived from the
operation of the holder's network to provide cable or video service within the jurisdiction of the local entity,
including all of the following:
(1) All charges billed to subscribers for any and all cable service or video service provided by the holder of a state
franchise, including all revenue related to programming provided to the subscriber, equipment rentals, late fees,
and insufficient fund fees.
(2) Franchise fees imposed on the holder of a state franchise by this section that are passed through to, and paid
by, the subscribers.
(3) Compensation received by the holder of a state franchise that is derived from the operation of the holder's
network to provide cable service or video service with respect to commissions that are paid to the holder of a state
franchise as compensation for promotion or exhibition of any products or services on the holder's network, such as
a "home shopping" or similar channel, subject to paragraph (4) of subdivision (e).
(4) A pro rata portion of all revenue derived by the holder of a state franchise or its affiliates pursuant to
compensation arrangements for advertising derived from the operation of the holder's network to provide video
service within the jurisdiction of the local entity, subject to paragraph (1) of subdivision (e). The allocation shall be
based on the number of subscribers in the local entity divided by the total number of subscribers in relation to the
relevant regional or national compensation arrangement.
(e) For purposes of this section, the term "gross revenue" set forth in subdivision (d) does not include any of the
following:
(1) Amounts not actually received, even if billed, such as bad debt; refunds, rebates, or discounts to subscribers or
other third parties; or revenue imputed from the provision of cable services or video services for free or at reduced
rates to any person as required or allowed by law, including, but not limited to, the provision of these services to
public institutions, public schools, governmental agencies, or employees except that forgone revenue chosen not to
be received in exchange for trades, barters, services, or other items of value shall be included in gross revenue.
(2) Revenues received by any affiliate or any other person in exchange for supplying goods or services used by the
holder of a state franchise to provide cable services or video services. However, revenue received by an affiliate of
the holder from the affiliate's provision of cable or video service shall be included in gross revenue as follows:
(A) To the extent that treating the revenue as revenue of the affiliate, instead of revenue of the holder, would have
the effect of evading the payment of fees that would otherwise be paid to the local entity.
(B) The revenue is not otherwise subject to fees to be paid to the local entity.
(3) Revenue derived from services classified as noncable services or nonvideo services under federal law, including,
but not limited to, revenue derived from telecommunications services and information services, other than cable
services or video services, and any other revenues attributed by the holder of a state franchise to noncable
services or nonvideo services in accordance with Federal Communications Commission rules, regulations,
standards, or orders.
(4) Revenue paid by subscribers to "home shopping" or similar networks directly from the sale of merchandise
through any home shopping channel offered as part of the cable services or video services. However, commissions
or other compensation paid to the holder of a state franchise by 'home shopping" or similar networks for the
promotion or exhibition of products or services shall be included in gross revenue.
(5) Revenue from the sale of cable services or video services for resale in which the reseller is required to collect a
fee similar to the franchise fee from the reseller's subscribers.
(6) Amounts billed to, and collected from, subscribers to recover any tax, fee, or surcharge imposed by any
governmental entity on the holder of a state franchise, including, but not limited to, sales and use taxes, gross
receipts taxes, excise taxes, utility users taxes, public service taxes, communication taxes, and any other fee not
imposed by this section.
(7) Revenue from the sale of capital assets or surplus equipment not used by the purchaser to receive cable
services or video services from the seller of those assets or surplus equipment.
(8) Revenue from directory or Internet advertising revenue, including, but not limited to, yellow pages, white
pages, banner advertisement, and electronic publishing.
(9) Revenue received as reimbursement by programmers of specific, identifiable marketing costs incurred by the
holder of a state franchise for the introduction of new programming.
(10) Security deposits received from subscribers, excluding security deposits applied to the outstanding balance of
a subscriber's account and thereby taken into revenue.
(f) For the purposes of this section, in the case of a video service that may be bundled or integrated functionally
with other services, capabilities, or applications, the state franchise fee shall be applied only to the gross revenue,
as defined in subdivision (d), attributable to video service. Where the holder of a state franchise or any affiliate
bundles, integrates, ties, or combines video services with nonvideo services creating a bundled package, so that
subscribers pay a single fee for more than one class of service or receive a discount on video services, gross
revenues shall be determined based on an equal allocation of the package discount, that is, the total price of the
individual classes of service at advertised rates compared to the package price, among all classes of service
comprising the package. The holder's offering a bundled package shall not be deemed a promotional activity. If the
holder of a state franchise does not offer any component of the bundled package separately, the holder of a state
franchise shall declare a stated retail value for each component based on reasonable comparable prices for the
product or service for the purpose of determining franchise fees based on the package discount.
(g) For the purposes of determining gross revenue under this division, a video service provider shall use the same
method of determining revenues under generally accepted accounting principals as that which the video service
provider uses in determining revenues for the purpose of reporting to national and state regulatory agencies.
(h) The state franchise fee shall be remitted to the applicable local entity quarterly, within 45 days after the end of
the quarter for that calendar quarter. Each payment shall be accompanied by a summary explaining the basis for
the calculation of the state franchise fee. If the holder does not pay the franchise fee when due, the holder shall
pay a late payment charge at a rate per year equal to the highest prime lending rate during the period of
delinquency, plus 1 percent. If the holder has overpaid the franchise fee, it may deduct the overpayment from its
next quarterly payment.
(i) Not more than once annually, a local entity may examine the business records of a holder of a state franchise to
the extent reasonably necessary to ensure compensation in accordance with this section. The holder shall keep all
business records reflecting any gross revenues, even if there is a change in ownership, for at least four years after
those revenues are recognized by the holder on its books and records. If the examination discloses that the holder
has underpaid franchise fees by more than 5 percent during the examination period, the holder shall pay all of the
reasonable and actual costs of the examination. If the examination discloses that the holder has not underpaid
franchise fees, the local entity shall pay all of the reasonable and actual costs of the examination. In every other
instance, each party shall bear its own costs of the examination. Any claims by a local entity that compensation is
not in accordance with subdivision (a), and any claims for refunds or other corrections to the remittance of the
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holder of a state franchise, shall be made within three years and 45 days of the end of the quarter for which
compensation is remitted, or three years from the date of the remittance, whichever is later. Either a local entity or
the holder may, in the event of a dispute concerning compensation under this section, bring an action in a court of
competent jurisdiction.
(j) The holder of a state franchise may identify and collect the amount of the state franchise fee as a separate line
item on the regular bill of each subscriber.
(Amended by Stats. 2007, Ch. 123, Sec. 5. Effective January 1, 2008.)
5870. (a) The holder of a state franchise shall designate a sufficient amount of capacity on its network to allow the
provision of the same number of public, educational, and governmental access (PEG) channels, as are activated
and provided by the incumbent cable operator that has simultaneously activated and provided the greatest number
of PEG channels within the local entity under the terms of any franchise in effect in the local entity as of January 1,
2007. For the purposes of this section, a PEG channel is deemed activated if it is being utilized for PEG programming
within the local entity's jurisdiction for at least eight hours per day. The holder shall have three months from the
date the local entity requests the PEG channels to designate the capacity. However, the three-month period shall
be tolled by any period during which the designation or provision of PEG channel capacity is technically infeasible,
including any failure or delay of the incumbent cable operator to make adequate interconnection available, as
required by this section.
(b) The PEG channels shall be for the exclusive use of the local entity or its designee to provide public, educational,
and governmental channels. The PEG channels shall be used only for noncommercial purposes. However,
advertising, underwriting, or sponsorship recognition may be carried on the channels for the purpose of funding
PEG -related activities. The PEG channels shall all be carried on the basic service tier. To the extent feasible, the
PEG channels shall not be separated numerically from other channels carried on the basic service tier and the
channel numbers for the PEG channels shall be the same channel numbers used by the incumbent cable operator
unless prohibited by federal law. After the initial designation of PEG channel numbers, the channel numbers shall
not be changed without the agreement of the local entity unless the change is required by federal law. Each channel
shall be capable of carrying a National Television System Committee (NTSC) television signal.
(c) (1) If less than three PEG channels are activated and provided within the local entity as of January 1, 2007, a
local entity whose jurisdiction lies within the authorized service area of the holder of a state franchise may initially
request the holder to designate not more than a total of three PEG channels.
(2) The holder shall have three months from the date of the request to designate the capacity. However, the three-
month period shall be tolled by any period during which the designation or provision of PEG channel capacity is
technically infeasible, including any failure or delay of the incumbent cable operator to make adequate
interconnection available, as required by this section.
(d) (1) The holder shall provide an additional PEG channel when the nonduplicated locally produced video
programming televised on a given channel exceeds 56 hours per week as measured on a quarterly basis. The
additional channel shall not be used for any purpose other than to continue programming additional government,
education, or public access television.
(2) For the purposes of this section, "locally produced video programming" means programming produced or
provided by any local resident, the local entity, or any local public or private agency that provides services to
residents of the franchise area; or any transmission of a meeting or proceeding of any local, state, or federal
governmental entity.
(e) Any PEG channel provided pursuant to this section that is not utilized by the local entity for at least eight hours
per day as measured on a quarterly basis may no longer be made available to the local entity, and may be
programmed at the holder's discretion. At the time that the local entity can certify to the holder a schedule for at
least eight hours of daily programming, the holder of the state franchise shall restore the channel or channels for
the use of the local entity.
(f) The content to be provided over the PEG channel capacity provided pursuant to this section shall be the
responsibility of the local entity or its designee receiving the benefit of that capacity, and the holder of a state
franchise bears only the responsibility for the transmission of that content, subject to technological restraints.
(g) (1) The local entity shall ensure that all transmissions, content, or programming to be transmitted by a holder
of a state franchise are provided or submitted in a manner or form that is compatible with the holder's network, if
the local entity produces or maintains the PEG programming in that manner or form. If the local entity does not
produce or maintain PEG programming in that manner or form, then the local entity may submit or provide PEG
programming in a manner or form that is standard in the industry. The holder shall be responsible for any changes
in the form of the transmission necessary to make it compatible with the technology or protocol utilized by the
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holder to deliver services. If the holder is required to change the form of the transmission, the local entity shall
permit the holder to do so in a manner that is most economical to the holder.
(2) The provision of those transmissions, content, or programming to the holder of a state franchise shall constitute
authorization for the holder to carry those transmissions, content, or programming. The holder may carry the
transmission, content, or programming outside of the local entity's jurisdiction if the holder agrees to pay the local
entity or its designee any incremental licensing costs incurred by the local entity or its designee associated with
that transmission. A local entity shall not enter into a licensing agreement that imposes higher proportional costs
for transmission to subscribers outside the local entity's jurisdiction.
(3) The PEG signal shall be receivable by all subscribers, whether they receive digital or analog service, or a
combination thereof, without the need for any equipment other than the equipment necessary to receive the lowest
cost tier of service. The PEG access capacity provided shall be of similar quality and functionality to that offered by
commercial channels on the lowest cost tier of service unless the signal is provided to the holder at a lower quality
or with less functionality.
(h) Where technically feasible, the holder of a state franchise and an incumbent cable operator shall negotiate in
good faith to interconnect their networks for the purpose of providing PEG programming. Interconnection may be
accomplished by direct cable, microwave link, satellite, or other reasonable method of connection. Holders of a
state franchise and incumbent cable operators shall provide interconnection of the PEG channels on reasonable
terms and conditions and may not withhold the interconnection. If a holder of a state franchise and an incumbent
cable operator cannot reach a mutually acceptable interconnection agreement, the local entity may require the
incumbent cable operator to allow the holder to interconnect its network with the incumbent's network at a
technically feasible point on the holder's network as identified by the holder. If no technically feasible point for
interconnection is available, the holder of a state franchise shall make an interconnection available to the channel
originator and shall provide the facilities necessary for the interconnection. The cost of any interconnection shall be
borne by the holder requesting the interconnection unless otherwise agreed to by the parties.
(i) A holder of a state franchise shall not be required to interconnect for, or otherwise to transmit, PEG content that
is branded with the logo, name, or other identifying marks of another cable operator or video service provider. For
purposes of this section, PEG content is not branded if it includes only production credits or other similar
information displayed at the conclusion of a program. The local entity may require a cable operator or video service
provider to remove its logo, name, or other identifying marks from PEG content that is to be made available
through interconnection to another provider of PEG capacity.
(j) In addition to any provision for the PEG channels required under subdivisions (a) to (i), inclusive, the holder
shall reserve, designate, and, upon request, activate a channel for carriage of state public affairs programming
administered by the state.
(k) All obligations to provide and support PEG channel facilities and institutional networks and to provide cable
services to community buildings contained in a locally issued franchise existing on December 31, 2006, shall
continue until the local franchise expires, until the term of the franchise would have expired if it had not been
terminated pursuant to subdivision (o) of Section 5840, or until January 1, 2009, whichever is later.
(1) After January 1, 2007, and until the expiration of the incumbent cable operator's franchise, if the incumbent
cable operator has existing unsatisfied obligations under the franchise to remit to the local entity any cash
payments for the ongoing costs of public, educational, and government access channel facilities or institutional
networks, the local entity shall divide those cash payments among all cable or video providers as provided in this
section. The fee shall be the holder's pro rata per subscriber share of the cash payment required to be paid by the
incumbent cable operator to the local entity for the costs of PEG channel facilities. All video service providers and
the incumbent cable operator shall be subject to the same requirements for recurring payments for the support of
PEG channel facilities and institutional networks, whether expressed as a percentage of gross revenue or as an
amount per subscriber, per month, or otherwise.
(m) In determining the fee described in subdivision (1) on a pro rata per subscriber basis, all cable and video
service providers shall report, for the period in question, to the local entity the total number of subscribers served
within the local entity's jurisdiction, which shall be treated as confidential by the local entity and shall be used only
to derive the per subscriber fee required by this section. The local entity shall then determine the payment due
from each provider based on a per subscriber basis for the period by multiplying the unsatisfied cash payments for
the ongoing capital costs of PEG channel facilities by a ratio of the reported subscribers of each provider to the total
subscribers within the local entity as of the end of the period. The local entity shall notify the respective providers,
in writing, of the resulting pro rata amount. After the notice, any fees required by this section shall be remitted to
the applicable local entity quarterly, within 45 days after the end of the quarter for the preceding calendar quarter,
and may only be used by the local entity as authorized under federal law.
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(n) A local entity may, by ordinance, establish a fee to support PEG channel facilities consistent with federal law
that would become effective subsequent to the expiration of any fee imposed pursuant to subdivision (1). If no such
fee exists, the local entity may establish the fee at any time. The fee shall not exceed 1 percent of the holder's
gross revenues, as defined in Section 5860. Notwithstanding this limitation, if, on December 31, 2006, a local entity
is imposing a separate fee to support PEG channel facilities that is in excess of 1 percent, that entity may, by
ordinance, establish a fee no greater than that separate fee, and in no event greater than 3 percent, to support PEG
activities. The ordinance shall expire, and may be reauthorized, upon the expiration of the state franchise.
(o) The holder of a state franchise may recover the amount of any fee remitted to a local entity under this section
by billing a recovery fee as a separate line item on the regular bill of each subscriber.
(p) A court of competent jurisdiction shall have exclusive jurisdiction to enforce any requirement under this section
or resolve any dispute regarding the requirements set forth in this section, and no provider may be barred from the
provision of service or be required to terminate service as a result of that dispute or enforcement action.
(Amended by Stats. 2007, Ch. 123, Sec. 6. Effective January 1, 2008.)
5880. Holders of state franchises shall comply with the Emergency Alert System requirements of the Federal
Communications Commission in order that emergency messages may be distributed over the holder's network. Any
provision in a locally issued franchise authorizing local entities to provide local emergency notifications shall remain
in effect, and shall apply to all holders of a state -issued franchise in the same local area, for the duration of the
locally issued franchise, until the term of the franchise would have expired were the franchise not terminated
pursuant to subdivision (o) of Section 5840, or until January 1, 2009, whichever is later.
(Amended by Stats. 2007, Ch. 123, Sec. 7. Effective January 1, 2008.)
5885. (a) The local entity shall allow the holder of a state franchise under this division to install, construct, and
maintain a network within public rights-of-way under the same time, place, and manner as the provisions governing
telephone corporations under applicable state and federal law, including, but not limited to, the provisions of
Section 7901.1.
(b) Nothing in this division shall be construed to change existing law regarding the permitting process or
compliance with the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the
Public Resources Code) for projects by a holder of a state franchise.
(c) (1) For purposes of this section, an "encroachment permit" means any permit issued by a local entity relating to
construction or operation of facilities pursuant to this division.
(2) A local entity shall either approve or deny an application from a holder of a state franchise for an encroachment
permit within 60 days of receiving a completed application. An application for an encroachment permit is complete
when the applicant has complied with all statutory requirements, including the California Environmental Quality Act
(Division 13 (commencing with Section 21000) of the Public Resources Code).
(3) If the local entity denies an application for an encroachment permit, it shall, at the time of notifying the
applicant of the denial, furnish to the applicant a detailed explanation of the reason for the denial.
(4) The local entity shall adopt regulations prescribing procedures for an applicant to appeal the denial of an
encroachment permit application issued by a department of the local entity to the governing body of the local
entity.
(5) Nothing in this section precludes an applicant and a local entity from mutually agreeing to an extension of any
time limit provided by this section.
(d) A local entity may not enforce against the holder of a state franchise any rule, regulation, or ordinance that
purports to allow the local entity to purchase or force the sale of a network.
(Added by Stats. 2006, Ch. 700, Sec. 3. Effective January 1, 2007.)
5890. (a) A cable operator or video service provider that has been granted a state franchise under this division may
not discriminate against or deny access to service to any group of potential residential subscribers because of the
income of the residents in the local area in which the group resides.
(b) Holders or their affiliates with more than 1,000,000 telephone customers in California satisfy subdivision (a) if
all of the following conditions are met:
(1) Within three years after it begins providing video service under this division, at least 25 percent of households
with access to the holder's video service are low-income households.
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(2) Within five years after it begins providing video service under this division and continuing thereafter, at least 30
percent of the households with access to the holder's video service are low-income households.
(3) Holders provide service to community centers in underserved areas, as determined by the holder, without
charge, at a ratio of one community center for every 10,000 video subscribers. The holder shall not be required to
take its facilities beyond the appropriate demarcation point outside the community center building or perform any
inside wiring. The community center may not receive service from more than one state franchise holder at a time
under this section. For purposes of this section, "community center" means any facility operated by an organization
that has qualified for the California Teleconnect Fund, as established in Section 280 and that will make the holder's
service available to the community.
(c) Holders or their affiliates with fewer than 1,000,000 telephone customers in California satisfy this section if they
offer video service to all customers within their telephone service area within a reasonable time, as determined by
the commission. However, the commission shall not require the holder to offer video service if the cost to provide
video service is substantially above the average cost of providing video service in that telephone service area.
(d) When a holder provides video service outside of its telephone service area, is not a telephone corporation, or
offers video service in an area where no other video service is being offered, other than direct -to -home satellite
service, there is a rebuttable presumption that discrimination in providing service has not occurred within those
areas. The commission may review the holder's proposed video service area to ensure that the area is not drawn in
a discriminatory manner.
(e) For holders or their affiliates with more than 1,000,000 telephone customers in California, either of the following
shall apply:
(1) If the holder is predominantly deploying fiber optic facilities to the customer's premise, the holder shall provide
access to its video service to a number of households at least equal to 25 percent of the customer households in
the holder's telephone service area within two years after it begins providing video service under this division, and
to a number at least equal to 40 percent of those households within five years.
(2) If the holder is not predominantly deploying fiber optic facilities to the customer's premises, the holder shall
provide access to its video service to a number of households at least equal to 35 percent of the households in the
holder's telephone service area within three years after it begins providing video service under this division, and to
a number at least equal to 50 percent of these households within five years.
(3) A holder shall not be required to meet the 40 -percent requirement in paragraph (1) or the 50 -percent
requirement in paragraph (2) until two years after at least 30 percent of the households with access to the holder's
video service subscribe to it for six consecutive months.
(4) If 30 percent of the households with access to the holder's video service have not subscribed to the holder's
video service for six consecutive months within three years after it begins providing video service, the holder may
submit validating documentation to the commission. If the commission finds that the documentation validates the
holder's claim, then the commission shall permit a delay in meeting the 40 -percent requirement in paragraph (1) or
the 50 -percent requirement in paragraph (2) until the time that the holder does provide service to 30 percent of the
households for six consecutive months.
(f) (1) After two years of providing service under this division, the holder may apply to the state franchising
authority for an extension to meet the requirements of subdivision (b), (c), or (e). Notice of this application shall
also be provided to the telephone customers of the holder, the Secretary of the Senate, and the Chief Clerk of the
Assembly.
(2) Upon application, the franchising authority shall hold public hearings in the telephone service area of the
applicant.
(3) In reviewing the failure to satisfy the obligations contained in subdivision (b), (c), or (e), the franchising
authority shall consider factors that are beyond the control of the holder, including, but not limited to, the following:
(A) The ability of the holder to obtain access to rights-of-way under reasonable terms and conditions.
(B) The degree to which developments or buildings are not subject to competition because of existing exclusive
arrangements.
(C) The degree to which developments or buildings are inaccessible using reasonable technical solutions under
commercially reasonable terms and conditions.
(D) Natural disasters.
(4) The franchising authority may grant the extension only if the holder has made substantial and continuous effort
to meet the requirements of subdivision (b), (c), or (e). If an extension is granted the franchising authority shall
establish a new compliance deadline.
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(g) Local governments may bring complaints to the state franchising authority that a holder is not offering video
service as required by this section, or the state franchising authority may open an investigation on its own motion.
The state franchising authority shall hold public hearings before issuing a decision. The commission may suspend or
revoke the franchise if the holder fails to comply with the provisions of this division.
(h) If the state franchising authority finds that the holder is in violation of this section, it may, in addition to any
other remedies provided by law, impose a fine not to exceed 1 percent of the holder's total monthly gross revenue
received from provision of video service in the state each month from the date of the decision until the date that
compliance is achieved.
(i) If a court finds that the holder of the state franchise is in violation of this section, the court may immediately
terminate the holder's state franchise, and the court shall, in addition to any other remedies provided by law,
impose a fine not to exceed 1 percent of the holder's total gross revenue of its entire cable and service footprint in
the state in the full calendar month immediately prior to the decision.
(j) As used in this section, the following definitions shall apply:
(1) "Access" means that the holder is capable of providing video service at the household address using any
technology, other than direct -to -home satellite service, providing two-way broadband Internet capability and video
programming, content, and functionality, regardless of whether any customer has ordered service or whether the
owner or landlord or other responsible person has granted access to the household. If more than one technology is
utilized, the technologies shall provide similar two-way broadband Internet accessibility and similar video
programming.
(2) "Customer's household" means those residential households located within the holder's existing telephone
service area that are customers of the service by which that telephone service area is defined.
(3) "Household" means, consistent with the United States Census Bureau, a house, an apartment, a mobilehome, a
group of rooms, or a single room that is intended for occupancy as separate living quarters. Separate living
quarters are those in which the occupants live and eat separately from any other persons in the building and which
have direct access from the outside of the building or through a common hall.
(4) 'Low-income household" means those residential households located within the holder's existing telephone
service area where the average annual household income is less than thirty-five thousand dollars ($35,000) based
on the United States Census Bureau estimates adjusted annually to reflect rates of change and distribution through
January 1, 2007.
(k) Nothing in this section shall be construed to require a holder to provide video service outside its wireline
footprint or to match the existing service area of any cable operator.
(Amended by Stats. 2007, Ch. 123, Sec. 8. Effective January 1, 2008.)
5900. (a) The holder of a state franchise shall comply with the provisions of Sections 53055, 53055.1, 53055.2, and
53088.2 of the Government Code, and any other customer service standards pertaining to the provision of video
service established by federal law or regulation or adopted by subsequent enactment of the Legislature. All
customer service and consumer protection standards under this section shall be interpreted and applied to
accommodate newer or different technologies while meeting or exceeding the goals of the standards.
(b) The holder of a state franchise shall comply with provisions of Section 637.5 of the Penal Code and the privacy
standards contained in Section 551 and following of Title 47 of the United States Code.
(c) The local entity shall enforce all of the customer service and protection standards of this section with respect to
complaints received from residents within the local entity's jurisdiction, but it may not adopt or seek to enforce any
additional or different customer service or other performance standards under Section 53055.3 or subdivision (q),
(r), or (s) of Section 53088.2 of the Government Code, or any other authority or provision of law.
(d) The local entity shall, by ordinance or resolution, provide a schedule of penalties for any material breach by a
holder of a state franchise of this section. No monetary penalties shall be assessed for a material breach if it is out
of the reasonable control of the holder. Further, no monetary penalties may be imposed prior to January 1, 2007.
Any schedule of monetary penalties adopted pursuant to this section shall in no event exceed five hundred dollars
($500) for each day of each material breach, not to exceed one thousand five hundred dollars ($1,500) for each
occurrence of a material breach. However, if a material breach of this section has occurred, and the local entity has
provided notice and a fine or penalty has been assessed, and if a subsequent material breach of the same nature
occurs within 12 months, the penalties may be increased by the local entity to a maximum of one thousand dollars
($1,000) for each day of each material breach, not to exceed three thousand dollars ($3,000) for each occurrence
of the material breach. If a third or further material breach of the same nature occurs within those same 12 months,
and the local entity has provided notice and a fine or penalty has been assessed, the penalties may be increased to
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a maximum of two thousand five hundred dollars ($2,500) for each day of each material breach, not to exceed
seven thousand five hundred dollars ($7,500) for each occurrence of the material breach. With respect to video
providers subject to a franchise or license, any monetary penalties assessed under this section shall be reduced
dollar -for -dollar to the extent any liquidated damage or penalty provision of a current cable television ordinance,
franchise contract, or license agreement imposes a monetary obligation upon a video provider for the same
customer service failures, and no other monetary damages may be assessed.
(e) The local entity shall give the video service provider written notice of any alleged material breach of the
customer service standards of this division and allow the video provider at least 30 days from receipt of the notice
to remedy the specified material breach.
(f) A material breach for the purposes of assessing penalties shall be deemed to have occurred for each day within
the jurisdiction of each local entity, following the expiration of the period specified in subdivision (e), that any
material breach has not been remedied by the video service provider, irrespective of the number of customers or
subscribers affected.
(g) Any penalty assessed pursuant to this section shall be remitted to the local entity, which shall submit one-half
of the penalty to the Digital Divide Account established in Section 280.5.
(h) Any interested person may seek judicial review of a decision of the local entity in a court of appropriate
jurisdiction. For this purpose, a court of law shall conduct a de novo review of any issues presented.
(i) This section shall not preclude a party affected by this section from utilizing any judicial remedy available to that
party without regard to this section. Actions taken by a local legislative body, including a local franchising entity,
pursuant to this section shall not be binding upon a court of law. For this purpose, a court of law shall conduct de
novo review of any issues presented.
(j) For purposes of this section, "material breach" means any substantial and repeated failure of a video service
provider to comply with service quality and other standards specified in subdivision (a).
(k) The Office of Ratepayer Advocates shall have authority to advocate on behalf of video subscribers regarding
renewal of a state -issued franchise and enforcement of this section, and Sections 5890 and 5950. For this purpose,
the office shall have access to any information in the possession of the commission subject to all restrictions on
disclosure of that information that are applicable to the commission.
(Amended by Stats. 2013, Ch. 356, Sec. 49. Effective September 26, 2013.)
5910. (a) The holder of a state franchise shall perform background checks of applicants for employment, according
to current business practices.
(b) A background check equivalent to that performed by the holder shall also be conducted on all of the following:
(1) Persons hired by a holder under a personal service contract.
(2) Independent contractors and their employees.
(3) Vendors and their employees.
(c) Independent contractors and vendors shall certify that they have obtained the background checks required
pursuant to subdivision (b), and shall make the background checks available to the holder upon request.
(d) Except as otherwise provided by contract, the holder of a state franchise shall not be responsible for
administering the background checks and shall not assume the costs of the background checks of individuals who
are not applicants for employment of the holder.
(e) (1) Subdivision (a) only applies to applicants for employment for positions that would allow the applicant to
have direct contact with or access to the holder's network, central office, or subscriber premises, and perform
activities that involve the installation, service, or repair of the holder's network or equipment.
(2) Subdivision (b) only applies to persons that have direct contact with or access to the holder's network, central
office, or subscriber premises, and perform activities that involve the installation, service, or repair of the holder's
network or equipment.
(f) This section does not apply to temporary workers performing emergency functions to restore the network of a
holder to its normal state in the event of a natural disaster or an emergency that threatens or results in the loss of
service.
(Amended by Stats. 2007, Ch. 123, Sec. 10. Effective January 1, 2008.)
5920. A holder of a state franchise employing more than 750 total employees in California shall annually report to
the commission all of the following:
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(a) The number of California residents employed by the holder, calculated on a full-time or full-time equivalent
basis.
(b) The percentage of the holder's total domestic workforce, calculated on a full-time or full-time equivalent basis.
(c) The types and numbers of jobs by occupational classification held by residents of California employed by holders
of state franchises and the average pay and benefits of those jobs and, separately, the number of out-of-state
residents employed by independent contractors, companies, and consultants hired by the holder, calculated on a
full-time or full-time equivalent basis, when the holder is not contractually prohibited from disclosing the
information to the public. This paragraph applies only to those employees of an independent contractor, company,
or consultant that are personally providing services to the holder, and does not apply to employees of an
independent contractor, company, or consultant not personally performing services for the holder.
(d) The number of net new positions proposed to be created directly by the holder of a state franchise during the
upcoming year by occupational classifications and by category of full-time, part-time, temporary, and contract
employees.
(Amended by Stats. 2015, Ch. 612, Sec. 64. Effective January 1, 2016.)
5930. (a) Notwithstanding any other provision of this division, any video service provider that currently holds a
franchise with a local franchising entity in a county that is a party, either alone or in conjunction with any other
local franchising entity located in that county, to a stipulation and consent judgment executed by the parties
thereto and approved by a federal district court shall neither be entitled to seek a state franchise in any area of
that county, including any unincorporated area and any incorporated city of that county, nor abrogate any existing
franchise before July 1, 2014. Prior to July 1, 2014, the video service provider shall continue to be exclusively
governed by any existing franchise with a local franchising entity for the term of that franchise and any and all
issues relating to renewal, transfer, or otherwise in relation to that franchise shall be resolved pursuant to that
existing franchise and otherwise applicable federal and local law. This subdivision shall not be deemed to extend
any existing franchise beyond its term.
(b) When an incumbent cable operator is providing service under an expired franchise or a franchise that expires
before January 2, 2008, the local entity may extend that franchise on the same terms and conditions through
January 2, 2008. A state franchise issued to any incumbent cable operator shall not become operative prior to
January 2, 2008.
(c) When a video service provider that holds a state franchise provides the notice required pursuant to subdivision
(n) of Section 5840 to a local entity, the local franchising entity may require all incumbent cable operators to seek
a state franchise and shall terminate the franchise issued by the local franchising entity when the commission
issues a state franchise for the video service provider that includes the entire service area served by the video
service provider and the video service provider notifies the local entity that it will begin providing video service in
that area under a state franchise.
(Amended by Stats. 2007, Ch. 123, Sec. 11. Effective January 1, 2008.)
5940. The holder of a state franchise under this division who also provides stand-alone, residential, primary line,
basic telephone service shall not increase this rate to finance the cost of deploying a network to provide video
service.
(Added by Stats. 2006, Ch. 700, Sec. 3. Effective January 1, 2007.)
5950. The commission shall not permit a telephone corporation that is providing video service directly or through its
affiliates pursuant to a state -issued franchise as an incumbent local exchange carrier to increase rates for
residential, primary line, basic telephone service above the rate as of July 1, 2006, until January 1, 2009, unless
that telephone corporation is regulated under rate of return regulation. However, the commission may allow rate
increases to reflect increases in inflation as shown in the Consumer Price Index published by the Bureau of Labor
Statistics. This section does not affect the authority of the commission to authorize an increase in rates for basic
telephone service that is bundled with other services and priced as a bundle. Nothing in this section is intended to
prohibit implementation of commission decision D. 06-04-071 to the extent it has not been implemented prior to
July 1, 2006.
(Added by Stats. 2006, Ch. 700, Sec. 3. Effective January 1, 2007.)
5960. (a) For purposes of this section, "census tract" has the same meaning as used by the United States Census
Bureau, and "household" has the same meaning as specified in Section 5890.
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(b) Every holder, no later than April 1, 2008, and annually no later than April 1 thereafter, shall report to the
commission on a census tract basis the following information:
(1) Broadband information:
(A) The number of households to which the holder makes broadband available in this state. If the holder does not
maintain this information on a census tract basis in its normal course of business, the holder may reasonably
approximate the number of households based on information it keeps in the normal course of business.
(B) The number of households that subscribe to broadband that the holder makes available in this state.
(C) Whether the broadband provided by the holder utilizes wireline -based facilities or another technology.
(2) Video information:
(A) If the holder is a telephone corporation:
(i) The number of households in the holder's telephone service area.
(ii) The number of households in the holder's telephone service area that are offered video service by the holder.
(B) If the holder is not a telephone corporation:
(i) The number of households in the holder's video service area.
(ii) The number of households in the holder's video service area that are offered video service by the holder.
(3) Low-income household information:
(A) The number of low-income households in the holder's video service area.
(B) The number of low-income households in the holder's video service area that are offered video service by the
holder.
(c) All information submitted to the commission pursuant to this section shall be disclosed to the public only as
provided for pursuant to Section 583.
(Amended by Stats. 2015, Ch. 612, Sec. 65. Effective January 1, 2016.)
5970. Subject to the requirements of this division, a state franchise may be transferred to any successor in interest
of the holder to which the certificate originally is granted, whether this transfer is by merger, sale, assignment,
bankruptcy, restructuring, or any other type of transaction, provided that the following conditions are met:
(a) The transferee submits to the commission all of the information required by this division of an applicant.
(b) The transferee agrees that any collective bargaining agreement entered into by a video service provider shall
continue to be honored, paid, or performed to the same extent as would be required if the video service provider
continued to operate under its franchise for the duration of that franchise unless the duration of that agreement is
limited by its terms or by federal or state law.
(Added by Stats. 2006, Ch. 700, Sec. 3. Effective January 1, 2007.)
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r
4 California Public Utilities Commission
January 2016
Frequently Asked Questions
Digital Infrastructure and
Video Competition Act of 2006
Q: What has changed in video franchising?
A: The Legislature passed, and Governor Schwarzenegger signed, Assembly Bill 2987
(Nunez), which established a new state video franchise process. The Digital
Infrastructure and Video Competition Act of 2006 (DIVCA) creates a new state franchise
process that replaces the current local franchise process to speed new infrastructure
investment and to promote competition for broadband and video services in California.
Q: What is the California Public Utilities Commission® (PUC) role in video
franchising?
A: DIVCA directs the California Public Utilities Commission (PUC) to issue state video
franchises for the provision of video. The PUC has a limited role set forth by DIVCA that
involves approving applications; enforcing antidiscrimination and build -out rules;
preventing the use of stand-alone, residential, primary line, basic phone service revenues
from being used to pay for deployment of video infrastructure; and handling complaints
brought forth by local governments regarding discrimination or build -out.
Q: What aspects of video franchising does the PUC not regulate?
A: Local entities, not the PUC, have sole authority to regulate the public, education, and
government (PEG) channel requirements; Emergency Alert System requirements
imposed by the Federal Communications Commission; and federal and state customer
service and protection standards. A local entity will be the lead agency for any
environmental review with respect to network construction, installation, and maintenance
in local rights-of-way. The PUC expects to work in partnership with the local entities to
ensure that issues of concern are promptly dealt with.
x California Public Utilities Commission
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Q: What is the main benefit of a state video franchise program?
A: This state video program facilitates market entry of those companies that are most
eager to compete against existing cable and satellite video companies. Under current law,
absent a state video franchise program, a company that wants to provide video service
must obtain local cable franchises from each local city or town. This new law means that
new video competitors may greatly speed up their deployment of state-of-the-art
infrastructure that will deliver video and broadband services to Californians.
Q: What are the consumer benefits of the new video franchise order?
A: The California video franchise law will bring new competitors to cable and satellite
video providers. This new competition is expected to drive down prices for video services
(e.g., rates for cable and satellite video services from providers like DISH Network and
DirecTV). Once this new advanced infrastructure is in place, it also may be used to
provide very fast Internet service to consumers, in addition to new services like on -
demand television, movies, music, and more.
Q: What is the PUC doing to protect consumers, especially low-income and rural
Californians?
A: The PUC intends to vigorously enforce the antidiscrimination rules and build -out
requirements of the DIVCA to ensure that the migital Divide Elis narrowed in California.
An enforcement process is set forth in the video franchise decision that makes it clear that
the PUC intends to enforce these provisions, using sanctions ranging from monetary
fines, suspension, and revocation of the video franchise license.
Q: Who will consumers call if they have a problem with their cable or video
service bill?
A: Consumers will continue to contact their local franchise authority []usually a city or
county F1 about their cable or video service bills. The PUC does not have authority to
enforce customer service issues related to cable; that authority remains with local
government pursuant to state and federal law.
Q: Who is responsible for rate increases and changes in promotional packages?
A: Rates for video programming are deregulated, and the CPUC has no jurisdiction in
pricing issues.
Q: Who has authority to enforce video customer service rules?
A: Cities and counties have the sole jurisdiction to enforce video customer service rules.
Disputes between local entities and franchise holders can be settled in court.
For more information on the CPUC, please visit www.cpuc.ca.gov.
2 J; � California Public Utilities Commission
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