HomeMy WebLinkAboutAB 2987 Cable and Video ServiceCITY OF PALM DESERT
Community Services Division
Staff Report
REQUEST: CONSIDERATION OF LEGISLATIVE REVIEW COMMITTEE
ACTION ON AB 2987 (NUNEZ AND LEVINE) AT ITS MEETING OF
MAY 2, 2006
SUBMITTED BY: Patricia Scully, CFEE, Senior Management Analyst
DATE: May 25, 2006
CONTENTS: AB 2987 Language
RECOMMENDATION:
By Minute Motion, concur with the action taken by the Legislative Review Committee at its
meeting of May 2, 2006, and direct staff to prepare a letter of opposition for the Mayor's
signature with regard to AB 2987 (Nunez and Levine) relative to cable and video service.
EXECUTIVE SUMMARY:
If passed, this bill would establish a procedure for State -issued authorizations for the
provision of cable or video service.
BACKGROUND:
Existing law provides that any city may authorize by franchise or license the construction
and operation of a community antenna television system and prescribe rules and
regulations to protect the subscribers and requires that cable and video service providers
comply with specified customer service and performance standards. If passed, AB 2987
would establish a procedure for State -issued authorizations for the provision of cable or
video service that would be administered by the Department of Corporations. The
Department would be the sole franchising authority of State -issued authorizations to
provide cable and video services and would require any person who seeks to provide cable
or video service in this State to file an application with the Department for a State -issued
authorization. Current franchise holders would be eligible to apply for State -issued
authorizations on the expiration of their current franchise agreements. Cities, counties, or
cities and counties would receive fees for cable or video services provided within their
CITY COUNCIL STAFF REPORT
RE: AB 2987 (NUNEZ AND LEVINE) MAY 25, 2006
jurisdictions, based on gross receipts and pursuant to specified procedures. This bill would
also require local agencies to permit the installation of networks by holders of State -issued
authorizations and would preclude enforcement of standards by local agencies.
The language of this bill would effectively eliminate the direct collection of local franchise
fees, which would instead be deferred to the State of California for collection and
distribution. Passage of this bill would have a significant financial impact on the manner
in which the City of Palm Desert conducts its day-to-day business through the collection
of franchise fees and would remove authority for rights -of -way, construction standards, etc.
Therefore, the Legislative Review Committee recommends that the City Council oppose
AB 2987 and direct staff to prepare a letter stating that position to appropriate legislators
for the Mayor's signature.
PATRICIA SCITCLY, CFEE
SENIOR MA e EMENT ANALY
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AB 2987 Assembly Bill - AMENDED
Page 1 of 13
BILL NUMBER: AB 2987 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 6, 2006
AMENDED IN ASSEMBLY MARCH 30, 2006
INTRODUCED BY Assembly Members Nunez and Levine
FEBRUARY 24, 2006
An act to add Article 3.7 (commencing with Section 53058) to
Chapter 1 of Part 1 of Division 2 of Title 5 of the Government Code,
relating to cable and video service.
LEGISLATIVE COJNSEL'S DIGEST
AB 2987, as amended, Nunez Cable and video service.
Existing law provides that any city Gc , county
or city and county may authorize by franchise or
license the construction and operation of a community antenna
television system and prescribe rules and regulations to protect the
subscribers. Existing law provides that cable and video service
providers comply with specified customer service standards and
performance standards.
4 l T., F,--. .. -- - - - - - 1,7; G9o.-. (`
This bill would establish a procedure for state -issued
authorizations for the provision of cable service or video service
that would be administered by the Department of Corporations. The
department would be the sole franchising authority of state -issued
authorizations to provide cable or video services. The bill would
require any person who seeks to provide cable service or video
service in this state to file an application with the department for
a state -issued authorization. Current franchise holders would be
eligible to apply for state -issued authorizations on the expiration
of their current franchise agreements. Cities, counties, or cities
and counties would receive fees for cable or video services provided
within their jurisdictions, based on gross revenues, pursuant to
specified procedures. The bill would require these local agencies to
permit the installation of networks by holders of state -issued
authorizations and would preclude enforcement of standards by the
local agencies.
Vote: majority. Appropriation: no. Fiscal committee:e
yes . State -mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Article 3.7 (commencing with Section
53058) is added to Chapter 1 of Part 1 of Division 2 of Title 5 of
the Government Code , to read:
Article 3.7. The Digital Infrastructure and Video
Competition Act of 2006
53058. This act shall be known and may be cited as the Digital
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Infrastructure and Video Competition Act of 2006.
53058.1. (a) This article shall be known and may be cited as the
Digital Infrastructure and Video Competition Act of 2006.
(b) The Legislature finds and declares all of the following:
(1) Video and cable services provide numerous benefits to all
Californians including access to a variety of news, public
information, education, and entertainment programming.
(2) 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.
(3) 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.
(4) Legislation to develop this new process should adhere to the
following principles.
(i) Create a fair and level playing field for all market
competitors that does not disadvantage or advantage one service
provider or technology over another.
(ii) 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.
(iii) Protect local government revenues and their control of
public rights of way.
(iv) Require market participants to comply with all applicable
consumer protection laws.
(v) Complement efforts to increase investment in broadband
infrastructure and close the digital divide.
(vi) Continue access to and maintenance of the public, education,
and government (PEG) channels.
53058.2. For purposes of this article, the following words have
the following meanings:
(a) "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.
(b) "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.
(c) "Cable system" is defined as set forth in Section 522(7) of
Title 47 of the United States Code.
(d) "Department" means the Department of Corporations.
(e) "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 a cable system in public
rights -of -way.
(f) "Franchising entity" means the city, county, or city and
county entitled to require franchises and impose fees on cable
operators, as set forth in Section 53066.
(g) "Incumbent cable operator" means the cable operator serving
the largest number of cable subscribers in, a particular city, county,
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or city and county franchise area on the effective date of this
article.
(h) "Local entity" means any city, county, or city and county
within the state within whose jurisdiction a holder of a state -issued
authorization under this article may provide cable service or video
service.
(i) "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, or voice or data
services.
(j) "Public right-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.
(k) "Subscriber" means a person who lawfully receives cable
service or video service from the holder of a state -issued
authorization or franchise for a fee.
(1) "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.
(m) "Video service" means video programming services provided
through wireline facilities located at least in part in public
rights -of -way without regard to delivery technology, including
Internet protocol technology. This definition does not include any
video programming provided by a commercial mobile service provider
defined in Section 322(d) of Title 47 of the United States Code.
(n) "Video service provider" means an entity providing video
service. This term does not include a cable operator.
53056.3. (a) The Department of Corporations is the sole
franchising authority for a state -issued authorization to provide
cable service or video service under this article. Neither the
department nor any franchising entity or other local entity of the
state may require the holder of a state -issued authorization to
obtain a separate franchise or otherwise impose any fee or
requirement on any holder of a state -issued authorization except as
expressly provided in this article. Sections 53066, 53066.01,
53066.2, and 53066.3 shall not apply to holders of a state -issued
authorization.
(b) The application process described in subdivisions (d) and (e)
and the authority granted to the department under this section shall
not exceed the provisions set forth in this section.
(c) Any person who seeks to provide cable service or video service
in this state after the effective date of this article shall file an
application, for a state -issued authorization with the department.
The department 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) The application for a state -issued authorization shall be made
on a form prescribed by the department and shall include all of the
following:
(1) A sworn affidavit, signed 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 agrees to comply with all federal and state
statutes, rules, and regulations, including, but not limited to, the
following:
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(i) A statement that the applicant will not discriminate in the
provision of video or cable services as provided in Section 53053.7.
(ii) A statement that the applicant will abide by all applicable
consumer protection laws and rules as provided in Section 53058.8.
(iii) A statement that the applicant will remit the fee required
by Section 53058.4 to the local entity.
(iv) A statement that the applicant will provide PEG channels as
required by Section 53058.5.
(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.
(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 department.
(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 service area footprint to be served
including the social economic information of all residents within the
service area footprint.
(7) If the applicant is a telephone corporation, as defined in
Section 234 of the Public Utilities Code, a description of the
territory in which the company provides telephone service. The
description shall include social economic information of all
residents within in 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).
(e) (1) The department shall notify an applicant for a
state -issued authorization whether the applicant's affidavit
described by subdivision (d) is complete or incomplete before the
30th calendar day after the applicant submits the affidavit.
(2) If the department finds the affidavit is complete, it shall
issue a certificate of state -issued authorization before the 14th
calendar day after that finding.
(3) If the department 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 department shall have 30 calendar days from
the date the application is amended to determine its completeness.
(4) The failure of the department to notify the applicant of the
completeness or incompleteness of the applicant's affidavit before
the 44th calendar day after receipt of an affidavit shall be deemed
to constitute issuance of the certificate applied for without further
action on behalf of the applicant.
(f) The state -issued authorization issued by the department shall
contain all of the following:
(1) A grant of authority to provide cable service or video
service, or both, in the service area footprint as requested in the
application.
(2) A grant of authority to use the public rights -of -way in the
delivery of that 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.
(g) The state -issued authorization issued by the department may be
terminated by the cable operator or video service provider by
submitting notice to the department.
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(h) Subject to the notice requirements of this article, a
state -issued authorization may be transferred to any successor in
interest of the holder to which the certificate is originally
granted.
(i) In connection with, or as a condition of, receiving a
state -issued authorization, the department shall require a holder to
notify the department and any applicable local entity within 14
business days of any of the following changes involving the holder or
the state -issued authorization:
(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 charge in the holder's legal name or the adoption of, or
change to, an assumed business name. The holder shall submit to the
department a certified copy of either of the following:
(A) The amended state -issued authorization.
(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 -issued authorization 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 -issued authorization issued under
this article. The holder shall identify both of the following:
(A) The number of customers in the service area covered by the
state -issued authorization being terminated.
(B) The method by which the holder's customers were notified of
the termination.
(6) A change in one or more of the service areas of this article
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.
(j) As a condition of receiving a state -issued authorization, the
holder shall notify all applicable local entities that the local
entity is included in the holder's service area under the
state -issued authorization being issued and that the holder intends
to provide video or cable service in the local entity's jurisdiction.
The holder shall give the notice required under this subdivision not
later than 10 days before the holder begins providing video or cable
service in the local entity's jurisdiction.
(k) The department shall develop information guides and other
tools to help educate local entities and other interested parties
about the various provisions of this article.
53058.4. (a) The holder of a state -issued authorization that
offers cable service or video service within the jurisdiction of the
local entity shall calculate and remit to the local entity a
state -issued authorization fee, as provided in this section. The
obligation to remit the state -issued authorization fee to a local
entity begins immediately upon provision of cable or 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 (g) 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 earned 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 -issued authorization
supporting the percentage paid by the incumbent cable operator
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serving the area within the local entity's jurisdiction, as provided
below. The fee shall be calculated as a percentage of the holder's
gross revenues, as defined in subdivision (d).
(b) The state -issued authorization fee shall be a percentage of
the holder's gross revenues, as defined in subdivision (d), as
follows:
(1) If there is an incumbent cable operator, 5 percent of the
holder's gross revenues or the percentage applied by the local entity
to the gross revenue of the incumbent cable operator, whichever is
lesser.
(2) If there is no incumbent cable operator or upon the expiration
of the incumbent cable operator's franchise, a local entity may, by
ordinance, set the percentage applied to the gross revenues of all
cable operators and video service providers, provided that the fee
shall not exceed 5 percent of gross revenues and shall be applied
equally to all cable operators and video service providers in the
local entity's jurisdiction.
(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 -issued authorization other
than as set forth in this section 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 under other applicable
provisions of state law.
(d) For purposes of this section, the term "gross revenues" means
all revenue actually received by the holder of a state -issued
authorization, 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 -issued
authorization.
(2) Any fees imposed on the holder of a state -issued authorization
by this section that are passed through to, and paid by, the
subscribers.
(3) Compensation received by the holder of a state -issued
authorization, 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 -issued
authorization 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 -issued authorization, or its affiliates pursuant to compensation,
arrangements for advertising derived from the operation of the
holder's network to provide cable service or 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
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or allowed by law, including, but not limited to, the provision of
these services to public institutions, public schools, governmental
agencies, or employees other than forgone revenue chosen not to be
received in exchange for trades, barters, services, or other items of
value.
(2) Revenues received by any affiliate or any other person in
exchange for supplying goods or services used by the holder of a
state -issued authorization 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, and any other revenues attributed by the holder of a
state -issued authorization 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 -issued authorization by "home shopping" or similar
networks for the promotion or exhibition 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 state -issued authorization fee from the reseller's customers.
(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 -issued authorization, 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 marketing
costs incurred by the holder of a state -issued authorization 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 purposes of this section, in the case of a cable service
or video service that may be bundled or integrated functionally with
other services, capabilities, or applications, the state -issued
authorization fee shall be applied only to the gross revenue, as
defined in subdivision (d), attributable to cable service or video
service, as reflected on the books and records of the holder kept in
the regular course of business in accordance with generally accepted
accounting principles and Federal Communications Commission or Public
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Utilities Commission rules, regulations, standards, and orders, as
applicable.
(g) The state -issued authorization fee shall be remitted to the
applicable local entity quarterly, within, 45 days after the end of
the quarter for the preceding calendar quarter. Each payment shall be
accompanied by a summary explaining the basis for the calculation of
the state -issued authorization fee.
(h) Not more than once annually, a local entity .may examine the
business records of a holder of a state -issued authorization to the
extent reasonably necessary to ensure compensation, in accordance with
subdivision (a). 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 holder of a state -issued
authorization, 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.
(i) The holder of a state -issued authorization may identify and
collect the amount of the state -issued authorization fee as a
separate line item on the regular bill of each subscriber.
53058.5. (a) The holder of a state -issued authorization shall
designate a sufficient amount of capacity on its network to allow the
provision of a comparable number of PEG channels or hours of
programming, at the holder's discretion, that the incumbent cable
operator has activated and provided within the local entity under the
terms of any franchise in effect in the local entity as of the
effective date of this article. For the purposes of this section, a
PEG channel is deemed activated if it is being
utilized for PEG programming within the
municipality for at least eight hours per day. The holder shall have
12 months from the date the local entity requests the PEG channels to
designate the capacity. However, the 12-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 subdivision.
(b) If no PEG channels are activated and provided within the local
entity as of the effective date of this article, a local entity
whose jurisdiction lies within the authorized service area of the
holder of a state -issued authorization may request the holder to
designate not more than a total of three PEG channels in a locality
with a population of more than 50,000, or not more than a total of
two PEG channels in a locality with a population of less than 50,000,
as determined by the last decennial census.
The holder shall have 12 months from the date of the request to
designate the capacity. However, the 12-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 subdivision.
(c) Any PEG channel provided pursuant to this section that is not
utilized by the local entity for at least eight hours per day 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 -issued authorization shall
restore the channel or channels for the use of the local entity.
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(d) The content to be provided over the PEG channel capacity
provided pursuant to this section shall be the responsibility of the
local entity receiving the benefit of that capacity, and the holder
of a state -issued authorization bears only the responsibility for the
transmission of that content, subject to technological restraints.
(e) The local entity shall ensure that all transmissions, content,
or programming to be transmitted by a holder of a state -issued
authorization are provided or submitted in a manner or form that is
capable of being accepted and transmitted by the holder, without any
requirement for additional alteration or change in the content by the
holder, over the holder's particular network, and that is compatible
with the technology or protocol utilized by the holder to deliver
services. The provision of those transmissions, content, or
programming to the holder of a state -issued authorization shall
constitute authorization for the holder to carry those transmissions,
content, or programming, including, at the holder's option, beyond
the jurisdictional boundaries of that local entity.
(f) Where technically feasible, the holder of a state -issued
authorization 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 -issued authorization and incumbent cable
operators shall provide interconnection of PEG channels on reasonable
terms and conditions and may not withhold the interconnection.. If a
holder of a state -issued authorization and an incumbent cable
operator cannot reach a mutually acceptable interconnection
agreement, then the duty of the holder of a state -issued
authorization shall be discharged if the holder makes interconnection
available to the charnel originator at a technically feasible point
on the holder's network.
(g) A holder of a state -issued authorization 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. 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.
(h) After the effective date of this article 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 capital costs of public educational and governmental access
channel facilities, 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 capital costs of public, educational, and
governmental access channel facilities.
(i) In determining the fee 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
with 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 public, educational, and
governmental access channel facilities by a ratio of the reported
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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.
(j) Upon the expiration of the incumbent cable operator's
franchise or if there is no local franchise, the holder or holders of
a state -issued authorization shall pay the local entity, in whose
jurisdiction it is offering cable or video service, a fee to support
the capital costs of public, educational, and governmental access
channel facilities and to support of institutional network facilities
equal to 1 percent of the holder's gross revenues, as defined in,
Section 53058.4, earned in the local entity or, at the holder's
election, the per subscriber fee that was paid by the holder to the
local entity pursuant to subdivision (h). The local entity may only
use the fee for purposes allowed under federal law. The payment
required by this subdivision shall not become due and payable until
the expiration of the incumbent cable operator's franchise, or 180
days after the local entity notifies the holder of the expiration,
whichever is later.
(k) The following services shall continue to be provided by the
incumbent cable operator that was furnishing services pursuant to a
franchise until January 1, 2008, or until the term of the franchise
expires, whichever is later:
(1) PEG production or studio facilities.
(2) Institutional network capacity, however defined or referred to
in the incumbent cable operator's franchise, but generally referring
to a private line data network capacity for use by the local entity
for noncommercial purposes.
(3) Cable services to community public buildings, such as
municipal buildings and public schools.
(1) The holder of a state -issued authorization 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.
(m) 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 by barred from the provision of service or be
required to terminate service as a result of that dispute or
enforcement action.
53058.6. (a) The local entity shall allow the holder of a
state -issued authorization under this article to install, construct,
and maintain a network within public rights -of -way under the same
terms and conditions as applicable to telephone corporations, as
defined under Section 234 of the Public Utilities Code, under
applicable state and federal law.
(b) A local entity may not enforce against the holder of a
state -issued authorization any rule, regulation, or ordinance that
purports to allow the local entity to purchase or force the sale of a
network.
53058.7. (a) A cable operator or video service provider that has
been granted a state -issued authorization, under this article 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, as required
by Section 541 (a) (3) of Title 47 of the United States Code.
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(b) The holder of a state -issued authorization shall have a
reasonable period of time to become capable of providing cable
service or video service to all households within the designated
service area footprint as defined in as defined in paragraph (6) of
subdivision (d) of Section 53058.2 and may satisfy the requirements
of this section through the use of (1) direct -to -home satellite
service or (2) another alternative technology that provides
comparable content, service, and functionality.
(C) within, 36 months after issuance of the holder's first
state -issued authorization, and then annually for seven additional
years, the holder shall report the extent to which cable or video
service is available to potential subscribers within the holder's
service area, including all of the following:
(1) The demographics of the service area.
(2) The percentage of homes in the service area that have access
to service.
(3) The demographics of the portion of the service area that has
access to service.
(4) The technology used by the holder to provide access to
service.
The report shall be filed with the Legislature, the department,
the Governor, and the Attorney General, and posted on the holder's
Web site. The holder shall not be required to report competitively
sensitive information.
(c) If there is a violation, the exclusive remedy for enforcing
the provisions of this section shall be an action in a court of
competent jurisdiction brought by the local entity, the district
attorney of the county in which the local entity is located, or the
Attorney General on behalf of the department. At least 60 days before
bringing an action, the enforcement entity shall serve the holder of
the state -issued authorization under this article with a notice
setting out the alleged violation and stating that an action may be
brought unless the provider, within the 60-day notice period,
corrects the alleged violation or enters into a binding agreement to
correct the violation. The notice shall contain a sufficiently
detailed description of the alleged violation to enable the holder of
the state -issued authorization to make a specific response. If the
holder of the state issued franchise does not timely enter into a
binding agreement to correct the violation, then the matter shall
proceed before the court of competent jurisdiction.
(d) If the court finds that the holder of the state issued
franchise is in willful violation of Section 53058.7 herein, it may,
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.
53058.8. The holder of a state -issued authorization shall comply
with the provisions of Sections 53055, 53055.1, 53055.2, and 53088.2.
A franchising or local entity may not adopt or seek to enforce any
additional or different customer service or other performance
standards under Section 53055. 3, subdivision (q) , (r) , or (s) of
Section 53088.2, or under any other authority or provision, of law.
Any reporting or enforcement authority in those sections shall
instead be assigned solely to the department.
53058.9. (a) The holder of a state -issued authorization 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.
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(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
(f), and shall make the background checks available to the holder
upon request.
(d) Except as otherwise provided by contract, the holder of a
state -issued authorization 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 customer
premises, and perform activities that involve the installation,
service, or repair of the holder's network or equipment.
(2) Subdivision (b) only applies to person that have direct
contact with or access to the holder's network, central office, or
customer 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.
53058.10. (a) A holder of a state -issued authorization employing
more than 750 total employees shall annually report to the department
all of the following:
(1) The number of California residents employed by the workforce,
calculated on a full-time or full-time equivalent basis.
(2) The percentage of the holder's total domestic workforce,
calculated on a full-time or full-time equivalent basis.
(3) The number of California residents employed by independent
contractors and consultants hired by the holder, calculated on a
full-time or full-time equivalent basis, when the holder has obtained
this information upon requesting it from the independent contractor
or consultant, and the holder is not contractually prohibited from
disclosing the information to the public. This paragraph applies only
to those employees of an independent contractor or consultant that
are personally providing services to the holder, and does not apply
to employees of an independent contractor or consultant not
personally performing services for the holder.
(b) The department shall annually report the information required
to be reported by holders of state -issued authorizations pursuant to
subdivision (a), to the Assembly Committee on Utilities and Commerce
and the Senate Committee on Energy, Utilities and Communications, or
their successor committees, and within a reasonable time thereafter,
shall make the information available to the public on its Internet
Web site.
53058.11. (a) The provisions of this article are intended to be
consistent with the Federal Cable Act (47 U.S.C. Sec. 521 et seq.).
(b) Nothing in this section shall be interpreted to prevent a
voice provider, cable operator or video service provider, or local
entity from seeking clarification of its rights and obligations under
federal law or from exercising any right or authority under federal
or state law.
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