HomeMy WebLinkAboutAgenda Report - December 18, 1985 (87)Abstain: Council Members - None
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CITY COiMIL MEMMr,
DECEMBER 18, 1986
ORDINANCES
Ordinance No. 1370 entitled, "An Ordinance of the City of
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Lodi City Council Repealing Lodi Municipal Code Chapter
COMMUNITY CABLE
5.16 Conrunity Antenna Television System Franchises and
TELEVISION SYSTEM
Enacting a New Chapter 5.16 - Comity Cable Television
FRANCHISES
System Franchises having been introduced at a Regular
Meeting of the Lodi City Council held December 4, 1985,
ORMINANCE NO.
was brought up for passage on motion of Council Mmiber
1310 ADOPTED
Snider, Olson second. Second reading of the Ordinance
was c i.tted after reading by title and the Ordinance
was then adopted and ordered to print by the following
vote:
Aye4: Council Members - Olson, Pinkerton, Reid,
Snider, .& Hinchman (Mayor)
Noes: Council Members - None
Absent: Council Members - None
Abstain: Council Members - None
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COUNCIL COMMUNICATION
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TO THE CITY COUNCIL DATE NO.
FROM: THE CITY MANAGER'S OFFICE December 12, 198
SUBJECT:
CABLE TFyL,EtTISION ORDINANCE
RECOMMENDED ACTION: That the City Council adopt Ordinance No. 1370 an
ordinance repealing Lodi Municipal Code Chapter 5.16 concerning Community
Antenna Television System Franchises and enacting a new Chapter 5.16.
BACKGROUND INFORMATION: At its regular meeting of December 4, 1985, the
City Council introduced Ordinance No. 1370 concerning the City's cable
television franchise. This ordinance is now .ready for adoption with the
one revision discussed in the attached mem prepared by the City Attorney
and previously distributed to Councilmefrlters.
TAP/lh
Respectfully tted,
Thcres A. Peterson
City Manager
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COUNCIL C0MMUNICA'j� ON
TO THE CITY COUNCIL DATE NQ.
FROM: THE CITY MANAGER'S OFRCE DECEMBFTZ 10, 1985
SUBJECT:
CABLE ORDINANCIE-3
I had an opportunity to speak with Mayor Hinchman on Friday and he has
suggested that we add to the Cable TV Ordinance at Section 5.16.140(C),
the following language:
A Grantee shall maintain a repair and maintenxice crew to be
available7 days per week on a 24 -hours per day basis, which ...
Mayor Hinchman feels that this amendment is necessary to provide for a
situation where you have two people in the home working and there is no
possible way they can meet with repair people during the week. Phis
would allow for repairs on Saturday, Sunday and evenings.
Further, it should be noted that Section 5.16.140(D) requires the
Grantee to submit their written proposal for receiving, acting upon,
and resolving subscriber complaints, to the City Manager for his
�Japproval.
At the time of the Request For Proposal, it is the intention of the
City Manager's office to have the Cable Company submit their complaint
prc,,-educes for his approval. This will give the City Manager an
opportunity to make any requests and suggestions to improve the
compLtint procedure.
The Mayor is also very concerned that the subscriber be given proper
notice of the ccnplaint procedure and, it should be noted that pursuant
to Section 5.16.140(D), at the time of the initial subscription to the
system and annually thereafter, each subscriber will be given a copy of
the complaint procedures. /
RONALD M. STEIN
CITY ATTORNEY
RMS:vc
COUNCIL COAIMUNIC ON
TO THE CITY COUNCIL DATE NO,
FROM: THE CITY MANAGER'S OFFICE DECEMBER 3, 1985
SUBJECT:
DRAFT ORDINANCE COMWJNITY CABLE T1;LEnSION SYSTEM FRANCHISES
BACKGROUND INFORMATION
Attached hereto is the 6th Draft of the above -referenced ordinance.
All interested parties have reviewed the ordinance and have mutually
agreed to the contents thereof. Further, the ordinance 'gas been
discussed by Council, staff and Cable Coapany representatives at the
December 3, 1985 shirtsleeves session.
That Council introduce the attached ordinance repealing Lodi- Municipal
Code Chapter 5.16 and enacting a new chapter 5.16 relating to Ccnmunity
Cable Television System Franchises.
RONALD M. STEIN
CITY ATTORNEY
RMS : vc
ORDINANCE NO.
AN ORDI3TU CE; OF THE LODI CITY COUNCIL
REPEALING LODI MUNICIPAL CODE CHAP'T'ER 5.16
COMMUNITY ANTENNA TE=SION SYSTEM FRANCHISES
AND ENACTING A N01 CHAPTER 5.16 -
COMMUNITY CABLE TELEVISION SYSTEM FRANCHISES
BE IT ORDAINED BY THE LODI CITY CUJNCIL.
SECTION 1. Chapter 5.16 - Community Antenna Television System Franchises, of
Title 5 of the Lodi Municipal Code is hereby repealed in its entirety, and a new
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Chapter 5.16 - Community Cable Television Systern Franchises is hereby enacted, as
follows:
Chapter 5.16
CC1MMUNITY CABLE T17TEWISION SYSTEM FRANCHISES
SECTIONS:
5.16.010 Definitions.
5.16.020 Franchise required.
5.16.030 Grant of Authority.
5.16.040 Application.
5.16.050 Grant or refusal.
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5.I6.060
Acceptance.
5.16.070
Conditions.
5.I6.080
of franchise.
5.16.090
Payment.
5.16.100
Financial iunuo payment.
5,16.110
Rates for service.
5,I6.I20
Limitations.
5.16,130
Rights reserved by city.
5.16.140
Complaint Iuzoceyloze.
5,I6.150
Refunds.
5.16.160
Liquidated damages.
` 5,16.170
Ccnuencenient of ooruatzzurticn and service.
5.16.I80
Forfeiture and termination.
5.16.190
Security fund.
5.16.200
Construction bond.
5.16.210
Construction practices.
5.16.220
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Removal or abandonment of facilities.
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� 5.16.230
{%zongea required by public improvements.
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Failure to ccnoplete work.
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5.16.250
Insurance.
`5.I6.�6O
,~
I�zdbt o� and zeocuzla.
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5 l6,270
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8azzd/ze standards.
` 5.I6.280
Continuity of aeoz/ioe mandatory.
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5.16.290
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Perfcozoaooa evaluation sessions.
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5.16.300
New develortwnts. '
S.l6,310
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with city.
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5.16.320
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Fiscal. report.
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5.16.330
Refusal of service.
5.16.340
service contract.
5.16.350
Television sale or repair.
5.16.360
Free service.
5.16.370
Moving of buildings.
5.16.380
Unauthorized connections—Tampering.
5.16.390
Transfers and assignments.
5.16.400
Access channels.
5.16.410
Waivers
5.16.420
Required services and facilities.
5.16.430
construction and technical standards
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5.16.010 Definitions.
For the purposes of this hapter, the following words and phrases shall have
the meanings respectively ascribed to them by this section:
a. "Access channel" shall mean a single channel dedicated in whole or in
part for local programming which is not originabod by a cable company.
b. "Basic Service" shall mean any service tier which include the
retransmission of local television broadcast n:ignals and Public, Educational and
Government Access Channels.
C. "Cable Services" are defined as the Kine -way transmission to subscribers
of video programming and other programming aerv-.ces together with subscriber
interaction, if any, which is required for the selection of such programming and
programming services that the cable operator iivAkes available to all subscribers
generally. Examples of cable services include: video programming, pay-per-
view, voter preference polls in the context of a video program, teletexts, one-
way transmission of any camputer software, and one-way videotex services such as
news services, stock market information, Otc. Non -cable services would
include: shop -at-home, bank -at -hare service , electronic mail, one-way and
two-way transmission of non -video data and information not offered to all
subscribers, data processing, video conferencing and voice ccm=ication.
d. "Cablecasting" is programming carriod ora cable system, exclusive of
broadcast signals, whether originated by the cable operator or any other party.
e. "Cable System" shall mean a facility consisting of a set of closed
transmission paths and associated signal generation, rec,:ption, and control
equipment that is designed to provide cable service wfiich includes video
programming and which is provided to multiple rjubscribers within a canminity, but
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such term does not include (A) a facility that serves only to retransmit the
television signals of one or more television broadcast stations; (B) a facility
oust serves only subscribers in one or more multiple unit dwellings under ccnTaon
ownership, control, or management, unless such facility or facilities uses any
public right-of-way; (C) a facility of a ccunon carrier which is subject in whole
or in part, to the provisions of Title II of the Communications Act of 1984,
except that such facility shall be considered a cable system to the extent such
facility is used in the transmission of video programming directly to subscribers;
or (D) any facilities of any electric utility used solely for operating its
electric utility systems.
f. "Local origination Programming" shall mean programming locally produced
by the Ccnipany. .
g. "Franchise" means any nonexclusive authority granted pursuant to this
chapter in terms of franchise or franchise renewal or otherwise to construct,
operate and maintain a cable system in the incorporated area of the city. The
terns "franchise" shall include the term "franchise renewal" herein.
h. Franchise area" means all or any portions of the incorporated area of
the city for which a franchise has been granted under this chapter.
i. "Grantee" means the person to whom a franchise under this chapter is
granted by the council and any lawful successor or assignee of such a person.
j. "Gross annual receipts" means any and all compensation or receipts
obtained from and as a result of the operation of a cable system by a grantee
within the franchised area; except that such terra shall not include receipts or
catlpensation for:
1. Installation, reconnection or any other nonrecurring charges;
2. The amount of any refunds, credits or other payments made to subscribers
or users;
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3. Any taxes on services furnished by- the grantee imposed directly or
indirectly on any subscriber or user by any municipal corporation, political.
subdivision, state or other governmental unit and collected by the grantee for the
gove mental unit; and
4. The sale or transfer of tangible property;
5: The sale or transfer of the franchise;
6. The issuance, sale or transfer of corpor._:.tion stocks, bonds or other
securities; and
7. Loans or gifts to the grantee.
k. "Person" means any person, firm, association, organization, partnership,
business trust, joint venture, corporation or ccrrpany.
1. "Property of grantee" means any property constructed, installer,
operated or maintained by a grantee under the authority of a nonexclusive
franchise issued pursuant to this chapter.
m. "Street" means the surface of, and the space above and below, any public
street, road, highway, freeway, lane, alley, court, sidewalk, parkway, drive,
public utility easement or other public place as may be authorized by the council,
existing as such as of or after the effective date of the ordinance codified ir_
this chapter within the incorporated area of the city.
n. "Subscriber" means any person or entity receiving for any purpose the
cable service of a grantee.
5.16.020 Franchise required.
No person shall extend, operate or carry on the business of distributing to
any persons in this city any television signals or radio signals by means of a
cable system unless a franchise or renewal of franchise therefor has first been
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obtained pursuant to the provi:-ons of this chapter, and unless such franchise or
renewal of franchise is in full force and effect. No person shall construct,
install or maintain within any street in the city or within any other public
property of the city or within any privately owned area within the city which has
not yet beccme a public street but is designated or delineated as a proposed
public street on any tentative subdivision map approved by the city, any equipTent
or facilities for distributing any television signals or radio signals through a
cable system., unless a franchise authorizing such use of such street or property
or area has first been obtained pursuant to the provisions of this chapter, and
unless such franchise is in full force and effect.
5.16.030 Grant of authority.
a. A nonexclusive franchise to construct, operate and maintain a cable
system
witlu.n any
franchise
area may be granted by the council to any person,
whether
operating
under an
existing franchise or not, offering to furnish and
provide
a system
pursuant
to the germs and provisions of this chapter. No
provision of this chapter shall be construed as to req.re the granting of a
franchise when in the opinion of the council it is in the public interest to
restxict the number of grantees to one or more. Neither the granting of any
nonexc.lusive franchise under this chapter nor any of the provisions contained in
this chapter shall be construed to prevent the city frau granting any identical,
or sirai lar, nonexclusive franchise to any person within the city.
b. Successful applicants chosen by the City Council will be granted the
right and privilege to construct, erect, operate and maintain, in, upon, along,
across, above, over and under the streets, alleys, public ways and public places
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now laid out or dedicated and all extensions thereof and additions thereto in the
City poles, wires, cables, underground conduits, manholes, and other cable
conductors and fixtures necessary for the maintenance and operation in the City of
Lodi of a cable system to be used for the sale and distribution of cable services
to the residents of the City.
C. Any privilege claimed under any such franchise by the Grantee in any
street or other public property shall be subordinate to any prior Lawful occupancy
of the streets or other public property.
d. .Insofar as it is not inconsistent with or otherwise p=eempted by Federal
or State regulations, the City Council also grants the right and privilege to
successful Grantees to provide non -cable cammnications services. The City
Council retains all authority, not otherwise preempted, to regulate non -cable
ccmmxiications services to the extent necessary to assure the delivery of proposed
non -cable services, if any, and that they are in ccnpliance with all regrilatory
provisions of this ordinance.
e. The construction, maintenance, and operation of Grantee's cable system
and all property of Grantee subject to the provisions of this ordinance shall be
subject to all lawful police powers, rules, and regulations of the City. The City
shall have the power at any time to order and require Grantee to remove or abate
any pole, line, tower, wire, cable, guy, conduit, electric conductor, or any other
structure or facility that is dangerous to life or property. In the event
Grantee, after written notice, fails or refuses to act, the City shall have the
power to remove or abate the same at the expense of the Grantee, all without
canpensation or liability for dimages to Grantee.
5.16.040 Appl.-ic-Ation.
A. An 4Vlication for a franchise or franchise renewal under this chapter
shall be in wailing and acccnpanied by a payment to the city in an amount to be
established azo amended from time to time by resolution of the City Council.. An
application sk.�A11 contain the following information:
1. ?`tw, name and address of the applicant. if the applicant is a
partnership, tho name and address of each partner shall be set forth. If the
applicant is A corporation, the application shall state the names and addresses
of its direct,, main officers, major stockholders and associates, and the names
and addresses; of parent and subsidiary cc upanies;
2. ,A description of the manner in which the applicant proposes to
construct, i�tAll, maintain and operate the cable system and the extent and
manner in whjt�h existing or future poles or other public utilities will be used
for the systekt;;
3. A, detailed description of the proposed plan of operation cr the
applicant wh�gh shall include, but not be limited to the following:
a) A detailed map indicating all areas to be served, how they are to be
serve and a proposed time schedule for the installation of all equipment
neces.y to become 100 percent operational, throughout the entire area to
be sewed;
b) A detailed, informative, and referenced statement describing the
actual. L�-Tipment and the operational and technical standards proposed by the
applic4�ts
4. A, �;tatemjent of the estimated costs of the installation of the proposal
system descxIN in paragraphs 2 and 3 of this subsection.
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5. All applicants are required to clearly delineate the initial service
area being proposed on a map of sufficient detail (see No. 3 above). Said map
shall also indicate any and all areas that will not receive services.
6. All applicants shall agree to extend cable system upon requestof any
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contiguous area not designated for initial service in the plan when potential
i` subscribers can be served by extension of the cable system past dwelling units
F equivalent to a density of forty (40) hcffes per m4-,'-- of street. Extension shall
be at Grantee's cost. If undergrounding is required by regulation, Grantee mist
t make installation at Grantee's expense. Where aerial extension is allowed by
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regulation but underground installation is requested by benefitted subscribers,
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the cost of undergrounding that exceeds the estimated aerial extension cost may
be charged to benefitted subscribers.
7. A statement or schedule in a form approved by the city manager of
proposed rates and charges to subscribers for installation and services, and a
copy of the proposed service agreement between the grantee and its subscribers
shall acccupany the application;
8. A statement setting forth all agreements and understandings, whether
written, oral or implied existing between the applicant and any person who is a
party in interest with respect to the proposed franchise or the proposed cable
operation. If a franchise is granted to a person posing as a front or ac the
representative of another person, and such information is not disclosed in t're
original application, such franchise is void and of no force and effect;
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9. A financial statement prepared by a certified public accountant or
public accountant satisfactory to the council, demonstrating applicant's financial
status and its financial ability to ccrrrplete the construction or reconstruction,
installation, and operation of the proposed system.
10. An original application, for a franchise shall include a detailed
financial plan (pro forma) describing for each year of the franchise, projected
number of subscribers, rates, all revenues, operating expenses, capital
expenditures, depreciation schedule, incase statements and a sources and uses of
funds statement. All information is to be presented in the format to be
prescribed by the City.
B. The council may at any time demand, and applicant shall then provide,
such supplementary, additional or other information as the council deems
reasonably necessary to determine whether the requested franchise should be
granted.
5.16.050 Grant or refusal.
Upon consideration of any application, the council may refuse to grant the
requested franchise or the council may by resolution grant a franchise for a cable
system to any applicant as may appear from its application to be in the opinion of
the council best qualified to render good and efficient cable service to
subscribers in the proposed franchise area. The application submitted, together
with any amendments, and this chapter shall constitute and form part of the
franchise if granted.
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5.16.060 Acceptance.
Within thirty days after the date of a resolution awarding a franchise, or
within such extended period of ti..-ne as the council may authorize, the grantee
shall file with the city manager his written acceptance in forms satisfactory to
the city attorney, of the franchise, together with the required bond and insurance
policies, and his agreement to be bound by and to comply with and to do all things
required of him by the provisions of this chapter and the franchise. Such
acceptance and agreement shall be acknowledged by the grantee before a notary
public and shall bE in form and content satisfactory to, and approved by, the city
attorney.
5.16.070 Conditions.
A. Any franchise granted pursuant to this chapter shall include, among
other things, the following condition:
The cable system herein franchised shall be used and operated solely and
exclusively for the purpose expressly authorized by Ordinance of the City of
Lodi and no other purpose whatsoever.
B. Inclusion of the statement set out in subsection A of this section in
any such franchise does not limit the authority of the city to include any other
reasonable condition, limitation or restriction which it desns necessary to impose
in connection with a franchise granted pursuant to the authority conferred by this
chapter.
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5.16.080 Duration/Renewal of franchise.
A. The duration of the rights, privileges and authorizations granted in a
franchise agreement shall be not to exceed twenty years from the date a franchise
is awarded. A franchise may be renewed by the City upon application of the
Grantee pursuant to the procedure established in sub -section b of this section
and in accordance with the then applicable law.
B. Renewal.
(1) During the six-month period which begins with the 36th month
before the Franchise expiration, the City may on its own initiative, and
shall at the request of the Grantee, ccmwnce proceedings which afford the
public appropriate notice and participation for the purpose of:
(a) Identifying the future cable -related ccamunity reeds and interests;
and
(b) Reviewing the performance of the Grantee under the franchise during
the then current franchise term.
(2)
(a) Upon ccupletion of a proceeding under subsection (1), the Grantee
seeking renewal of a franchise may, on its own initiative or at the
request of the City, submit a proposal for renewal.
(b) Any such proposal shall contain such material as the City may
require, including proposals for an upgrade of the cable system.
(c) The City may establish a date by which such proposal shall be
submitted..
(3)
(a) Upon submittal by the Grantee of a proposal to the City for the
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renewal of the franchise, the City shall provide public notice of such
proposal and, during the 4 -month period which begins on the carpletion
of any proceedings under subsection (1), renew the franchise or, issue a
preliminary assessment that the franchise should not be renewed and, at
the request of the Grantee or on its own- initiative, once an
administrative proceeding, after providing prcu pt public notice of such
proceeding, in accordance with paragraph (3)(b) to consider whether—
(i.) the Grantee has substantially ccmplied with the material terms of
the existing franchise and with applicable law;
(ii) the quality of the Grantee's service, including signal quality,
response to consumer complaints, and billing practices, but without
regard to the mix, quality, or level of cable services or other services
provided over the system, has been reasonable in light of ccanuxnity
needs;
(iii) the Grantee has the financial, legal, and technical ability to
provide the services, facilities, and equipment as set forth in the
Grantee's proposal; and
(iv) the Grantee's proposal is reasonable to meet the future
cable -related community needs and interests, taking into account
the cost of meeting such needs and interests.
(b) In any proceeding under paragraph (3)(a), the Grantee shall be
afforded notice and the Grantee and the City, or its designee, -4-.all
be afforded fair opportunity for full participation, including the
right to introduce evidence (including evidence related to issues
raised in the proceeding under subsection (1)) to require the
production of evidence and to question witnesses. A transcript
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shall be made of any such proceeding.
(c) At the completion of a proceeding under this subsection, the City
shall issue a written decision granting or denying the proposal for
rene�ral based upon the record of such proceeding, and transmit a copy
of such decision to the Grantee. Such decision shall state the
reasons therefor.
(4) Any denial of a proposal for renewal shall be based on one or more
adverse fin.9ings made with respect to the factors described in
subparagraphs (i) through (iv) of subsection (3)(a), pursuant to the
record of the procceeding under subsection (3).
(5) If the Grantee's proposal for renewal has been denied by a final
decision of the City made pursuant to this section, or has been adversely
affected by a failure of the City to act in accordance with the procedural
requirements of this section, the Grantee may appeal such final decision
or failure pursuant to the provisions of section 635 of the Federal Cable
Communications Policy Act of 1984.
(6) Notwithstanding the provisions of subsections (1) through (5) of this
section, the Grantee may submit a proposal for the renewal of the
franchise pursuant to this subsection at any time, and the City my,. after
affording the public adequate notice and opportunity for ccmre_nt, grant or
de,.y such proposal at any time (including after proceedings pursuant to
this section ?gave eciced). The provisions of subsections (1) through
(5) of this section shall not apply to a decision to grant or deny a
proposal under this subsection. The denial of a renewal pursuant to this
subsection shall not affect action on a renewal proposal that is submitted
in accordance with subsections (1) through (5) .
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5.16.090 payment.
Any grantee granted a franchise under ttus chapter shall pay to the
during the life of such franchise, a stun equal to three percent of they!'°
gross receipts of the grantee, payable quarterly.
5.16.100 Financial statement--Audit—Mininaun pa_ymsnt.
i�
A. The grantee shall file with the council within ninety days aftel
expiration of any fiscal year or portion thereof during which a franchise'''
force, a financial statement prepared by a certified public accountant orf',
t
accountant showing in detail gross annual receipts, as defined in this cliapttil;
the grantee during the preceding calendar year or portion thereof. It shc.1!
the duty of the grantee to pay to the city within fifteen days after the tiny
filing such statements the sum prescribed by the franchise, or any unpaid brei =fit
thereof, for the calendar year or the portion thereof covered by the statement.
B. The right is reserved to the city of audit and recorputation of aff
all amounts paid under this chapter and acceptance until expiration of a perjjiii, E
five years following payment shall not be construed as a release or as an
t'
and satisfaction of any claim the city may have for further or additional''
payable under this chapter or for the performance of any other obligations Oji
this chapter.
C. In any year, Wincing with the first full calendar year of so` ,
during which the franchise payments amount to less than twelve hundred doi4'§�
the grantee shall pay to the city for such a year a minimum total amount of tis
hundred dollars,.
D. In the event of any holding over after expiration or any
termination of a franchise issued under this chapter,i.
whether with or withotl
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consent of the city, the grantee shall pay to city a compensation twice the
percent of its gross annual receipts during such period as it would be rewired to
XY
pay under its franchise if there were no holding over. 3.
- 5.16.110 Rates for service.
The grantee shall file wi'h the city council a true and correct schedule of
rates to be charged for installation and connection to its cable system and a
monthly charge for cable service. Such rates shall not be changed or mDd.iified in
any maiz-ar without first filing the changed or modified rates with the city
council thirty days prior to the effective date of such change or modification.
The City Council shall have the authority to regulate the rates to the
extent the Council is permitted to by Federal, State or local law.
5.16.120 Limitations.
A. Any franchise granted under this chapter shall be nonexclusive.
B. No privilege or exerrption shall be authorized or conferred by any
franchise granted under this chapter except those specifically prescribed in this
C. Any privilege claimed under a franchise by the grantee in any street, or
other public property, shall be subordinate to any prior occupancy thereof for
public purposes.
D. A franchise granted under this chapter shall be a privilege to be held
in r-csonal trust by the original grantee. It cannot be sold, transferred,
leased, assigned or disposed of, in whole. or in part, either by forced or
involuntary sale, sale, verger, consolidation or otherwise, without prior consent
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of the council expressed in writing. The grantee shall file with the council
within thirty days prior to sale, transfer, assignment or lease of the franchise
or any part thereof or any rights or privileges granted thereby, written evidence
of the proposed transaction certified to by the grantee or its duly authorized
officers. Any proposed assignee must show financial responsibility to carry out
the terms of the franchise and must agree to comply with all of the provisions of
this chapter; and provided further, that no consent or approval, shall be required
for a transfer in trust, by wortgage, by security agreement, or by other
hypothecationasa whole., to secure an indebtedness, or for a transfer required by
operation of law.
E. Any right or power in, or duty impressed upon any officer, employee,
department or board of the city shall be subject to.transfer by the council or by
law to any other officer, employee, department or board of the city.
F. The grantee shall have no recourse whatsoever against the city for any
loss, cost, expense or damage, arising out of any provisions or requirements of
this chapter or its enforcement.
G. Any franchise granted under this chapter shall not relieve the grantee
of any obligation involved in obtaining pole space from any department or division
of the city, other agency of government, utility company, or from others
maintaining poles in streets; provided, that the latter shall cooperate with the
grantee to the end that only one set of poles shall be required by all.
H. Any franchise granted under this chapter is in lieu of any and all other
rights, privileges, powers, immunities and authorities owned, possessed,
controlled or exercisable by the grantee, or any successor to any interest of the
grantee, of or pertaining to the construction, operation or maintenance of any
cable system in the incorporated limits of the city, and the acceptance of a
franchise under this chapter shall operate as between grantee and the cite, as an
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abandonment of any and all of such rights, privileges, powers, immunities and
authorities within the city, to the effect that, as between the grantee and the
city, any and all construction, operation and maintenance by any grantee of any
cable system in the city shall be, and shall be deemed and construed in all
instances and respects to be, under and pursuant to such franchise, and not under
or pursuant to any other right, privilege, power, immunity or authority
whatsoever.
5.16.130 Rights reserved by city.
A. Nothing in this chapter shall in any way or to any extent impair or
affect the right of the city to acquire the grantee's property either by purchase
or through exercise of the right of eminent dcmin, and nothing in this chapter
shall be construed to contract away or to modify or abridge the city's right of
eminent domain in respect to any grantee.
B. No franchise granted under this chapter shall be given any value before
any court or other public authority in any action or proceeding brought by the
city in excess of the amount of the required filing fee and any other sum paid by
the grantee to city for a franchise at the time of granting.
C. There is reserved to the city every right and power which is required to
be reserved or provided in this chapter by any ordinance or resolution of the
city, and the grantee, by its acceptance of any franchise, agrees to be bound
thereby and to ccoply with any action or requirements of the city in its exercise
of such rights or power, enacted or established before or after the effective date
of the ordinance codified in this chapter.
D. The council may do all things which are necessary and convenient in the
exercise of its jurisdiction under this chapter.
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E. Iieither the granting of any franchise under this chapter nor any of the
provisions contained in this chapter shall be construed to prevent the city from
granting any identical, or similar, franchise to any other person within all or
any portion of the city.
F. There is reserved to city the right to amend any section or part of this
chapter so as to require reasonable additional or greater standards of
construction, operation, maintenance or otherwise, on the part of the grantee for
purposes of protecting the public health, safety and welfare. This provision
shall not apply to ccmni.tments of a contractual nature made in a franchise
agreement or franchise renewal agreements.
G. Neither the granting of any franchise nor any provision in this chapter
shall constitute a bar to the exercise of any governmental right or poser of city.
H. All facilities of any grantee licensed under this chapter within the
city shall be available for civil defense purposes at such time; as the city
director of civil defense shall require.
5.16.140 Complaint procedure.
A. The city manager or the city manager's designee is specified by the
City as having primary responsibility for the continuing administration of a
franchise and implementation of complaint procedures.
B. A Grantee shall maintain a central office within or in close proximity
to the City, which shall be open during all usual business hours, have a publicly -
listed telephone with a toll-free number and sufficient lines; and be so
operated that complaints and requests for repairs, billing or adjustments shall be
received on a twenty-four (24) hour basis.
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r
C. A Grantee shall maintain a repair and maintenance crew which shall
respondto subscriber complaints or requests for service within twenty-four (24)
hours after receipt of the complaint or request. No charge shall be made to the
subscriber for this service unless such maintenance or repair is required as a
result of damage caused by subscriber.
}
D. A Grantee shall establish procedures for receiving, acting upon, and
resolving subscriber complaints to the satisfaction of the city manager's office.
A Grantee shall furnish a notice of such procedures to each subscriber at the time
of initial subscription to the system and annually thereafter.
Grantee's service call procedures shall contain provisions to protect the
interests of subscribers. In the event that the Grantee or its employee
determines that Grantee's cable system is not responsible for any given problem
which has resulted in a service call (i.e., subscriber equipment is at fault), the
subscriber shall have the right to have this contention demonstrated thxough the
use of an additional television receiver comparison. A standard television
receiver will be used in the subscriber's home to allow a direct A/B comparison of
performance.
E. A Grantee shall keep a maintenance service log which will indicate the
nature of each service camplaint, the date and time it was received, the
disposition of said complaint and the time and date thereof. This log shall be
made available for periodic inspection by representatives of the city manager.
All service cciplaint entries shall be retained on file for a period consisting of
the most recent three (3) years.
F. When there have been similar canplaints made or when there exists other
evidence, which, in the judgment of the city manager casts doubt on the
reliability or quality of cable service, the city manager shall have the right and i
authority to carpel a Grantee to test, analyze, and report on the performance of
-21-
the system. Such report shall be delivered to the city manager no later than
fourteen (14) days after the city manager formally notifies the Grantee and shall
include the following information: the nature of - the ccnplaints which
precipitated the special tests; what system cauponents were tested, the equipnent
used, and procedures employed in said testing; the results of such tests; and the
method in which said ccrnplaints were resolved.
G. The city manager may require that tests and analyses shall be supervised
by a professional engineer not on the permanent staff of a Grantee. The aforesaid
engineer should sign all records of the special tests, and forward to the city
manager such records with a report interpreting the results of the tests and
recam*xding actions to be taken by a Grantee and the City.
H. The City's right under this section shall be limited tc, requiring tests,
analyses, and reports covering specific subjects ansa characteristics based on said
ccw1aints or other evidence when and under such circumstances as the City has
reasonable grounds to believe that the ccmplaints or other evidence requires that
tests be performed to protect the public against substandard cable.service.
I. The city manager is authorized and empowered to adjust, settle or
cmprcmise any controversy or charge arising from the operations of any grantee
under this chapter, either on behalf of the city, the grantee or any subscriber in
the best interest of the public.
J. Either the grantee or any member of the public who may be dissatisfied
with the decision, of the city manager may appeal the matter to the council for
hearing and determination.
K. The council may accept, reject or modify, the decision of the city
manager and the council may adjust, settle or cam-rcmise any controversy or cancel
any charge arising fram, the operations of any grantee or from any provision of
this chapter.
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5.16.150 Refunds.
a. Subscribers not satisfied that services have been provided as outlined
in this ordinance and the Franchise Agreement shall be encouraged to notify the
System Manager. The Grantee shall work with the subscriber to resolve the problem
ivithin 48 hours, and upon request by a subscriber, the Grantee shall credit the
subscriber's account on a pro rata basis for loss of service ccmrencing 48 hours
after notification of the Grantee.
b. A grantee shall at the time of initial subscription to the system and
annually thereafter furnish a notice to subscribers of their right to a refund
for any loss or interruption of service for 48 hours or more.
5.16.160 Liquidated damages.
By acceptance of the franchise granted by the City, a Grantee understands
and shall agree that failure to ccoply with any time and perfol-momce requirements
as stipulated in this ordinance and franchise agreement will result in damage to
the City, and that it is and will be impracticable to determine the actual amount
of such damage in the event of delay or non-performance; the franchise agreement
shall include provisions for liquidated damages to be paid by the Grantee in
amounts set forth in the franchise agreement and chargeable to the security fund
for the following concerns:
a. Failure to canplete system construction or reconstruction in accordance
with Section 5.16.170 and Section 5.16.430 unless the Council specifically
approves the delay by motion or resolution, due to the occurrence of conditions
beyond Grantee's control, a Grantee shall pay five hundred dollars ($500.00) per
day for each day or part thereof, the deficiency continues.
-23-
b. Failure to provide upon written request, data, do=-nents, repcatr-,
information or to cooperate with City during an application process or
system review, a Grantee shall pay fifty dollars ($50.00) per day for each day cg-
part
rpart thereof, the violation occurs or continues.
C. Failure to test, analyze and report on the performance of the syu�,;
following a written request pursuant to this ordinance, a Grantee shall pay yd
City one hundred dollars ($100.00) per day for each day or part thereof, that ;
nonccnpliance continues.
d. For failure to provide in a continuing manner the broad categories of
services proposed in the accepted application unless the Council specifically
approves Grantee a delay or change, or the Grantee has obtained modification of
its obligation under Section 625 of the Cable Ccmnunications policy Act of 1984,
Grantee shall pay to the City five hundred dollars ($500.00) per day for each dy
ca part thereof that each noncompliance continues.
e. Forty-five (45) days following adoption of a resolution by the City
Council in accordance with Section 5.16.270 determining a failure of ,Grantee
comply with operational, maintenance or technical standards, Grantee shall pay t,,o
the City five hundred dollars ($500.00) for each day or part thereof, that su0b
non-compliance continues.
f. Any other action or non -action by the Grantee as agreed upon bete
the City and Grantee and set forth in the franchise agreement. Nothing in this
section shall preclude further liquidated damages as agreed upon by the parties in
the franchise agreement.
Grantee shall submit a construction plan or reconstruction plan which shall
be incorporated by reference and made a part of the franchise agreement. The plan
shall consist of a map of the entire franchise area and shall clearly delineate
the following:
(a) The areas within the franchise area where the cable system will be
initially available to subscriber including a schedule of. construction for
each year that construction or reconstruction is proposed.
(b) Areas within the franchise area where extension of the cable system
cannot reasonably be done due to lack of present or planned develoFmnt or
other similar reasons, with the areas and the reasons for not serving then
clearly identified on the map.
B. Upon acceptance of any franchise, the grantee shall immediately initiate
action to obtain all permits, licenses, easements, variances and any other
authorizations which are required or necessary in the conduct of its business,
including but not limited to any utility joint use attachment agreements,
microwave carrier licenses, any authorizations required to import distant signals,
and any other permits, licenses and authorizations to be granted by duly
constituted regulatory agencies having or asserting jurisdiction over the
operation of the cable system, any associated microwave transmission facilities,
or any other associated facility, and the grantee shall proceed with due diligence
until all such matters are obtained.
Copies of all petitions, applications and ccnrun.ications sutadtted by the
grantee to the Federal Ccmmnications CcYmdssion or any other federal or state
regulatory ccmission or agency having jurisdiction in respect to any matters
affecting cable operations authorized pursuant to its franchise, shall also be
C. Within ninety days after obtaining all true required or necessary
pe-ridts, licenses, easements, variances and any other authorizations referred to
in subsection A of this section, the grantee shall commence construction and
installation of the caole system.
D. Within six months atter building permits are granted for a particular
area, the grantee shall proceed to render initial services to subscribers, and the
completion of construction and installation shall be pursued with reasonable
diligence, not to exceed fifteen m✓nths from the date of the granting of the
building permits for the particular area to be served.
E. Failure to do any of the requirements of subsections A, B, C and D of
this section within the time specified except as provided in subsection F of this
section shall be grounds for termination of the franchise.
F. The council may in its discretion extend the time for the grantee,
acting in good faith, to do any act required under this section. The time for
commencement of construction and installation, or the rendering of service to
subscribers, initially or thereafter, shall be extended or excused, as the case
may be, for any period during which the grantee experiences delay or interruptions
due to any of the following circzumstances if reasonably beyond its control:
necessary utility changes or rearrangements, goverrmental or regulatory
restrictions or requirements, labor strikes, lockouts, war (declared or
undeclared), national emergency, fire, earthquake, the elements and acts of God.
G. Grantee shall extend cable system upon request of any contiguous area not
designated for initial service in the plan when potential subscribers can be
served by extension of the cable system past dwelling units equivalent to a
density of forty (40) hares per mile of street. Extension shall be at Grantee's
est. If undergrounding is required by regulation, Grantee must make
installation at Grantee's expense. Where aerial extension is allowed by
-26-
regulation but underground installation is requested by benefitted subscribers,
the cost of undergrounding that exceeds the estimated aerial extension cost may be
charged to benefitted subscribers.
5.16.180 Forfeiture and termination.
a. In addition to all other rights and powers retained by the City under
this ordinance or otherwise, the City reserves the right to forfeit and terminate
a franchise and all rights and privileges of a Grantee in the event of a material
breach of its terms and conditions. In interpreting this ordinance, material
provisions shall include all labeled as such and all others, which, under all the
facts and circumstances indicated, are a significant provision of the franchise
agreement. A material breach by Grantee shall include but shall not be limited to
the following:
(1) Failure to begin or canplete system construction, reconstruction or
system extension, or system improvement as provided under the franchise;
(2) Failure to provide the broad categories of services promised; assuming
Granteehas unsuccessfully pursued whatever recourse is available under Section
625 of the Cable C miunications Policy Act of 1984;
(3) Failure to restore service after ninety-six (96) consecutive hours of
interrupted service, except when approval of such interruption is obtained from
the City; or
(4) Materia', misrepresentation of fact in the application for or
negotiation of the franchise.
b. The, foregoing shall not constitute a material breach if the violation
occurs but it is without fault of a Grantee or occurs as a result of circumstances
beyond its control. Grantee shall not be excused by mere economic hardship nor
-27-
by misfeasance or malfeasance of its shareholders, directors, officers, or
employees.
C. The City may make a written demand that a Grantee ccamply with any such
provision, rules, order, or deten.ination under or pursuant to this ordinance and
franchise agreement. If the violation by the Grantee continues for a period of
thirty (30) days following such written demand without written proof that the
corrective action has been taken or is being actively and expeditiously pursued,
the City may place the issue of termination of a franchise before the City
Council. The City shall cause to be served upon Grantee at least twenty (20) days
prior to the date of such a Council meeting, a written notice of intent to request
such termination and the time and place of the meeting. Public notice stu.11 be
given of the meeting and issue which the Council is to consider.
d. The City Council shall hear and consider the issue and shall hear any
person interested therein, and shall determine in its discretion, whether or not
any violation by the Grantee has occurred.
e. If the City Council shall deteri-Line the violation by a Grantee was the
fault of Grantee and within its control, the Council may by resolution declare
that the franchise of the Grantee shall be forfeited and terminated unless there
is compliance within such period as the City Council may fix, such period not to
be less than sixty (60) days, provided no opportunity for compliance need be
granted for fraud or misrepresentation.
f. The issue of forfeiture and termination shall automatically be placed
upon the Council agenda at the expiration of the time set by it for compliance.
The Council then may terminate a franchise forthwith upon finding that Grantee
has failed to achieve compliance or may further extend the period in its
discretion.
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M -T
5.16.190 Security Fund.
a. Within thirty (30) days after the award or renewal of a franchise, a "
Grantee shall deposii ::•_+-h the City a corporate surety bond in the amount of
$50,000. The bond shall be used to insure the faithful performance by a Grantee-
of
ranteeof all provisions of this ordinance and resulting franchise agreement; and
compliance with all orders, permits and directions of any agency, ccmrission, RE
E-5 '
board department, t1nPnt, division or office of the City having Jurisdiction over its
acts or defaults under a franchise and the payment by the Grantee of any penalties
liquidated damages, claims, liens and taxes due the City which arise by, reason of
the construction, operation or maintenance of the system, including cost of {
removal or abandonment of any property of Grantee.
b. The corporate surety bond shall be maintained at $50,000 during the
entire term of a franchise, even if amounts have to be withdrawn pursuant to
subdivision a. or c. of this section. The Grantee shall keep the same in force
and effect at all times, throughout the existence of the franchise and thereafter
until Grantee has liquidated all of its obligations with the City that may have
arisen frau the acceptance of the franchise ordinance by Grantee or frau the
exercise of any right or privilege granted hereunder, including the removal of all
poles, wires, cables, underground conduits, manholes, and other conductors and
fixtures incident to the maintenance and operation of its cablesystem, should
such remolal be required by City Council or undertaker. by Grantee upon the
termination of the franchise.
c. If a Grantee fails to pay to the City any canpensation within the time
fixed herein; or fails after ten (10) days` notice to pay to the City any taxes
due and unpaid; or fails to repay the city within ten (10) days any damages, costs
or expenses which the City is carpelled to pay by reason of any act or default of
-29-
the Grantee in connection with a franchise; or fails after ten (10) days' notice
by the City of such failure to ccanply with any provision of a franchise which the
City reasonably determines can be remedied by demand on the corporate surety bond.
The City may immediately require payment of the amount thereof with interest and
any penalties from the corporate surety bond.
d. The rights reserved to the City with respect to the corporate surety
bond are in addition to all other rights of the City whether reserved by a
franchise or authorized by law, and no action, proceeding or exercise of a right
with respect to such corporate surety bond shall affect any other right the City
may have.
5.15.200 Construction bond.
a. Within thirty (30) days after the award or renewal of a franchise, a
Grantee shall obtain and maintain at its cost and expense, and file with the City
Clerk, a corporate surety bond in a ccnYpany authorized to do business in the State
of California and found acceptable by the City Attorney, in the amount of five
hundred thousand dollars ($500,000) to guarantee the timely construction., rebuild
or reconstruction and full activation of the cable system a•:' -he safeguarding of
damage to private property and restoration of damages incurred with utilities.
The bond shall provide but not be limited to the following condition: There
shall be recoverable by the City, jointly and severally from the principal and
surety, any and all damages, loss or costs suffered by the City resulting from the
failure of a Grantee to satisfactorily ccniplete constriction, rebuild, or
reconstruction and fully activate the cable system throughout the franchise area
pursuant to the terms and conditions of this ordinance and the franchise agreement.
-30-
b. Any extension to the prescribed construction time limit must be
authorized by the Council. Such extension shall be authorized only when the
Council finds that such extension is necessary and appropriate due to causes
beyond the control of a Grantee.
c. The construction bond shall be terminated only after the Council finds
that a Grantee has satisfactorily completed initial construction and activation or
reconstruction of the cable system pursuant tc the terms and conditions of this
ordinance and the franchise agreement.
d. The rights reserved to the City with respect to the construction bond
are in addition to all other rights of the City, whether reserved by this
ordinance or authorized by law, and no action, proceeding or exercise of a right
with respect to such construction bond shall affect any other rights the City may
have.
e.. The construction bond shall contain the following endorsement:
"It is hereby understood and agreed that this bond may not be cancelled by
the surety nor the intention not to renew be stated by the surety until
sixty (60) days after receipt by the City, by registered mail, of written
notice of such intent to cancel or not to renew."
5.16.210 Construction practices.
A. Any poles, cable lines, wires, conduits or other properties of the
grantee shall be constructed or installed in streets in accordance with good
engineering practice at such locations and in such manner as is approved by the
director of public works and shall conform to all applicable codes and laws.
B. The grantee shall not install or erect any facilities or apparatus in or
on other public property, places or rights-of-way, or within any privately -owned
-31-
area within the city which has not yet beccm� a public street but is designated or
delineated as a proposed public street on any tentative subdivision map approved
by the city, except those installed or erected upon existing or future public
utility facilities, without obtaining the prior written approval of the director
of public works and the owner -subdivider.
C. In those areas and portions of the city where the transmission and
distribution facilities of both the public utility providing telephone service and
those of the utility providing ele%:tric service have been or are to be placed
underground, then the grantee, upon written request by the director of public
works so to do, shall likewise initially construct, install, operate and maintain
its transmission and distribution facilities underground. For the purposes of
this subsection, "underground" includes a partial underground system. Amplifiers
in the grantee's transmission and distribution lines may be in appropriate
housings as approved by the director of public works. The city shall not in any
manner be responsible for any costs incurred by any grantee in placing his
property underground.
5.16.220 Reinoval or abandorment of facilities.
A. . In the event that the use of any part of the cable system is
discontinued for any reason for a.continuous period of six months, or in the event
such system or property has been installed in any street or public place without
ccmplyi.ng with the requirements of this chapter, or the franchise has been
terminated, cancelled or has expired, the grantee shall promptly, upon being given
ten days' written notice, remove from the streets or public places all such
property and poles of such system other than any which the director of public
works may permit to be abandoned in place. In the event of such removal, the
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grantee shall prarptly restore the street or other area from which such property
has been removed to a condition satisfactory to the director of public works.
B. Any property of the grantee remaining in place sixty days after the
termination, forfeiture or expiration of the franchise shall be considered
permanently abandoned. The director of public works may extend such tiros.
C. Any property of the grantee to be abandoned in place shall be abandoned
in such a manner as the director of public works prescribes. Subject to the
provisions of any joint use attachment agreement, upon permanent abandorrnent of
the property of the grantee in place, the property shall become that of the city
and the grantee shall submit to the director of public works an instrument in
writing, to be approved by the city attorney, transferring to the city the
ownership of such property.
5.16.230 Manges required by public improvements.
The grantee shall, at :its expense, protect, support, tenporarily disconnect,
relocate in the same street or other public place; or renrve from the street or
other public place, any property of the grantee wtien required by the director of
public works by reason of traffic conditions, public safety, street •racation,
freeway and 'reef construction, chc-.nge or establislmnent of street grade,
installation of sewars, drains, water pipes, power lines, signal lines and tracks
or any other type of structures or improverrents by public agencies; provided,
however, that the grantee shall in all such cases have the privilege and be
subject to the obligations to abandon any property of the grantee in place, as
provided in this chapter.
5.16.240 Failure to complete work.
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r-.
Capon failure of the grantee to commence, pursue or complete any work
required by law or by the provisions of this chapter or by its franchise tJ be
done in any street or other public place, within the time prescribed, and to the
satisfaction of the director of public works, the director of public works may, at
his option, cause such work to be dome and the grantee shall pay to the city the
cost thereof in the itemized amount, reported by the director of public works to
the grantee within thirty days after receipt of such itemized report.
5.16.250 Insurance.
A. The grantee shall indemnify the city, its officers and its employees
against all claims, demands, actions, suits and proceedings by others, against all
liability to others, and against any loss, cost and expense resulting therefrom,
including reasonable attorneys' fees, arising out of the, exercise and enjoyment of
its franchise irrespective of the amount of the comprehensive liability insurance
policy required under this section.
B. the grantee shall at all times during the existence of any franchise
issued under this chapter maintain in full force and effect, at its own cost and
expense, a general ocuprehensive liability insurance policy, in protection of the
city, its officers, boards, ccmmissions, agents and employees, in a company
approved by the city attorney and in a form satisfactory to the city attorney,
protecting the city and all persons against liability for loss or damage for
personal injury, death and property damage, occasioned by the operations of the
grantee under such a franchise, and for property damage, provided that the maxina3m,
anount for which liability shall be assumed, and requirements for the City of Lodi
being named an additional insured, and any other insurance requirements shall be
as set and required from time to time by resolution of the City Council. A copy
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of such policy or policies, or certificates of insurance showing the existence of
such insurance coverage, shall be filed by the grantee with the City Clerk.
C. The policies mentioned in the subsection B of this section shall name
the city, its officers, boards, camlissions, agents and enployees, as additional
insureds, shall contain a contractual liability endorsement approved by the city
attorney and shall contain a provision that a written notice of any cancellation
or reduction in coverage of such policies shall be delivered to the city manager
thirty days in advance of the effective date of the cancellation` or reduction.
S. 16.260 Right of inspection—Plans and records. A. At all reasonable times,
the grantee shall permit any duly authorized representative of the city to examine
all property of the grantee, together with any appurtenant property of the grantee
situated within or without the city, and to examine and transcribe any and all
maps and other records kept or maintained by the grantee or under its control
which deal with the operations, affairs, transactions or property of the grantee
in relation to its franchise. If any maps or records are not kept in the city,
and upon reasonable request they are not made available in the city, and if the
council determines that an exarunation of them is necessary or appropriate, then
all travel and maintenance expense necessarily incurred in making such examination
shall be paid by the grantee.
B. The grantee shall prepare and furnish to the director of public works
and the city manager at the times and in the form prescribed by either of such
officers, such reports with respect to its operations, affairs, transactions or
property, as may be reasonable, necessary or appropriate to the performance of any
of the rights, functions or duties of the city or any of its officers in
connection with the franchise.
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C. The grantee shall at all times make and keep in the city full and
ccnplete plans and records showing the exact location of all cable system
equipment installed or in use in streets and other public places in the city.
D. When any portion of the cable system is to be installed on public
utility pales and facilities, certified copies of the agreements for such joint
use of poles and facilities shall be filed with the director of public works.
5.16.270 Service standards.
a. A Grantee shall put, keep, and maintain all parts of the system in good
condition throughout the entire franchise period.
b. Upon termination of service to any subscriber, a Grantee shall prcxmptly
remove all its facilities and equipment from the premises of such subscriber upon
subscriber's request, unless said service serves rultiple users.
C. Grantee shall render efficient service, make repairs promptly, and
interrupt service only for good cause and for the shortest time possible. Such
interruptions, insofar as possible, shall be preceded by notice and shall occur
during periods of minium system use.
d. Grantee shall not allow its cable or other operations to interfere with
television reception of persons not served by Grantee, nor shall the system
interfere with, obstruct or hinder in any manner, the operation of the; various
utilities serving the residents of the City.
e. A Grantee shall continue through the term of the franchise to maintain
the technical,
operational,
and maintenance standards
and quality
of service
set
forth in this
ordinance
and franchise agreement.
Should the
City find,
by
resolution, that a Grantee has failed to maintain these standards and quality of
service, and should it, by resolution specifically enumerate improvements to be
-36-
made, a Grantee shall make such improvements. Failure to make such improvements
within forty-five (45) days of such resolution will constitute a material breach
of condition for which the remedy of Section 5.16.160 is applicable. (Liquidated
Damages.)
5.16.280 Continuity of service mandatory.
a. It shall be the right of all subscribers to continue receiving service
insofar as their financial and other obligations to a. Grantee are honored.
In the event of a change of Grantee, or in the event a new operator acquires
the system, a Grantee scall cooperate with the City, new Grantee or operator in
maintaining continuity of service to all subscribers. During such period, Grantee
shall be entitled to the revenues for any period during which it operates the
system, and shall be entitled to reasonable costs for its services when it no
longer operates the system.
b. In the event Grantee fails to operate the system for ninety-six (96)
consecutive hours without prior approval of the City or without'just cause; the_
City may at its option, operate the system or designate an operator unt_.1 such
time as Grantee restores service under conditions acceptable to the City or a
permanent operator is selected. If the City is required to fulfill this
obligation for a Grantee, the Grantee shall reimburse the City for all reasonable
costs or damages in excess of revenues from the system received by the City that
are the result of the Grantee's failure to perform.
5.16.290 Performances evaluation sessions.
a. The City and a Grantee shall hold scheduled performance evaluation
sessions within thi-ty (:30) days of the fourth, eighth, twelfth, and sixteenth
-37-n
anniversary dates of a Grantee's award of the franchise and as may be required by
federal and state law.
b. Special evaluation sessior.s may be held at any time during the term of a
franchise at the request of the City or the Grantee.
C. All evaluation sessions shall be open to the public and announced in a
newspaper of general circulation in accordance with legal notice. Grantee shall
notify its subscribers of all evaluation sessions by announcement on its system
between the hours of 7:00 p.m. and 9:00 p.m. for five (5) consecutive days
preceding each session.
d. Zbpics which may be discussed at any scheduled or special evaluation
session may include, but not be limited to, service rate structures; franchise
fee; liquidated damages; free or discounted services; application of new
technologies; system performance; services provided; programuning offered; customer
ccmplai.nts; privacy, amendments to this ordinance; judicial and FCC rulings;
line ectensiun policies; and Grantee or City rules.
5.16.300 New developrmnts.
a. Subsequent to each Performance evaluation Session as set forth in
Section 5.16.290, the City Council shall have the authority to order a public
hearing on the provision of additional channel capacity by Grantee or on the
inclusion in the Grantee's cable system of "state of the art" technology or
upgraded facilities. Notice of such hearing shall be provided to Grantee and the
Public not later than thirty (30) days prior to such hearing.
b. If after such hearing the City Council determines that (1) there exists
a reasonable need and demand for additional channel capacity and/or state of the
art technology or upgraded facilities, and (2) provision has been made 'or will be
made for adequate gates which will allow Gzantee a fair rate of return on its
Igo
investment (including the investment required to provide the additional channels
and/or the state-of-the-art technology or upgraded facilities), and (3) will not
result in economic loss for the Grantee, the City Council may order Grantee to
provide a specified number of additional channels and/or specified state—of-the-
art technology or upgraded facilities. Without implying any limitations as to
other provisions of this ordinance, this Section is deemed a material provision
within the meaning of Section 5.16.180 of this ordinance.
5.15.310 Filings with city. All matters provided in this chapter to be filed
with the city, unless provided otherwise in this chapter, shall be filed with the
city manager.
5.16.320 Fiscal Report.
The Grantee shall file annually with the city manager no later than one
hundred tneenty (120) days after the end of the Grantee's fiscal year, a copy of a
financial report applicable to the cable system serving Lodi, or its corporate
annual report, including an inane statement applicable to its operations during
the preceding twelve (12) month period, a balance sheet, a statement of its
properties devoted to the cable system operations, by categories, giving its
investment in such properties on the basis of original cost, less applicable
depreciation, a statement of sources and application of funds; and a statement of
current subscribers and penetration reached for each class of cable service.
These reports shall be certified as correct by an authorized officer of Grantp-e
and there shall be submitted along with them such other reasonable .information as
the City shall "request.
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r'1
5.16.330 Refusal of service.
Subject to Section 5.16.130, no person or entity in the existing ser%rice
area of the grantee shall be arbitrarily refused service; provided, however, that
the grantee shall not be required to provide service to any subscriber who does
not pay the applicable connection fee or monthly service charge or any other
charges as provided by this chapter or any resolution granting the franchise.
-40-
5.16.340 Service contract.
A. Before the grantee shall provide cable service to any subscriber, the
grantee shall obtain a signed contract from the subscriber containing a provision
substantially as follows:
Subscriber understands that in providing cable service (Grantee) is making
the use of public rights of way and that the continued use of these public
rights of way is in no way guaranteed. In the event the continued use of
such rights of way is denied to (Grantee) for any reason, (Grantee) will
make every reasonable effort to provide service over alternate routes.
Subscriber agrees he will make no claim nor undertake any action against the
City of Lodi, its officers, its employees, or (Grantee) if the service to be
provided by (Grantee) hereunder is interrupted or discontinued because the
continued use of such rights of way is denied to (Grantee) for any reason.
B. The form of the grantee's contract with its subscribers, shall be
subject to approval of the city manager with respect to the installation of this
provision.
5.16.350 Television sale or repair.
The grantee or any of its employees during their course of employment shall
not engage in the business of selling or leasing television or other receivers
which make any use of signals transmitted by its system, nor shall the grantee or
any of its employees during the course of their emp-oyment engage in the repair of
such receivers or the sale of parts for the same. This restriction shall not
apply to a converter that increases the capacity of the system that may be sold or
leased by the grantee to a subscriber.
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5.16.360 Free service.
The grantee shall provide free of charge a service drop for cable service
for all public and nonprofit private schools, city police and fire stations, city
recreation centers, and any additional municipal buildings designated by the city
council, provided that sucti locations are passed by transmission cable maintained
for the service cf paying subscribers. If the service drop exceeds one hundred
fifty feet, the grantee may charge for the excess footage on the basis of time and
materials.
5.16.370 Mbyin of buildings.
The grantee shall, on the request of any person holding a building moving
permit issued by the city, temporarily raise or lower its wires to permit the
moving of buildings. The actual expense of such temporary removal or raising or
lowering of wires shall be paid by the permittee. The grantee shall be given
not less than five working days advancenotice to arrange for such temporary wire
changes.
5.16.380 Unauthorized connections Tampering.
A. It is unlawful for any person, firm or corporation to make any
unauthorized connection, whether physically, acoustically, inductively,
electronically or otherwise, with any part of a franchised cable system within the
city for the purpose of taking or receiving television signals, radio signals,
pictures, programs, sound or electronic impulses of any kind for the purpose of
enabling himself or others to receive any such television signal, radio signal,
picture, program, sound or electronic impulses.
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fir::
B. It is unla ful for any person, without the consent of the grantee, to
willfully tamper with, remove, obstruct or injure any cables, wires, devices or
equipment used for the distribution of television signals, radio signals,
pictures, programs, sound or electronic impulses of any kind.
5.16.390 Transfers and assigrnnents.
a. A franchise shall not be sold, assigned or transferred, either in whole
or in part, or leased, sublet, nor shall title thereto, either legal or equitable
or any right, interest or property therein, pass to or vest in any person without
the prior written consent of the City. Such consent shall not be withheld
unreasonably.
No such consent shall be required for a transfer in trust, mortgage, or
other hypothecation as a whole or in part to secure an indebtedness.
The proposed assignee must show technical ability, financial capability,
legal qualifications and general character qualifications as determined by the
City and must agree to comply with all provisions of the franchise and such
conditions as may be prescribed by Council expressed by resolution. City shall be
deemed to have consented to a proposed transfer or assignment in the event its
refusal to consent is not conrnunicated in writing to Grantee within one hundred
twenty (120) days following receipt of written notice of t`ie proposed transfer or
assignment.
b. The Grantee shall promptly notify the City of any actual or proposed
change in or transfer of, or acquisition by any other party of, control of the
Grantee. The word "control" as used herein is rot limited to major stockholders
but includes actual working control in whatever manner exercised. Every change,
transfer, or acquisition of control of the Grantee shall make the franchise
subject to cancellation unless and until the City shall have consented thereto,
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which consent will not be unreasonably withheld. For the purpose of determining
whether it shall consent to such change, transfer or acquisition of control, the
City may inquire into the qualifications of the prospective controlling party and
the Grantee shall assist the City in any such inquiry.
c. A .rebuttable presumption that a transfer of control has occurred shall
arise upon the acquisition or accuftulation by any person or group.of persons of
10 percent of the voting interest of the Grantee.
d. The consent or approval of the City Council to any transfer of the
franchise shall not constitute a waiver or release of the rights of the City in
and to the streets, and any transfer shall by its terms, be expressly subject to
the terms and conditions of a franchise.
e. In any absence of extraordinary circumstances, the City will not apprcn?e
any transfer or assignment of a franchise prior to substantial completion of
construction or reconstruction of proposed system.
f. In no event shall a transfer of ownership or control be approved without
successor in interest becoming a signatory to the franchise agreement.
5.16. 400 Access channels.
a. Each cable system franchised by the City of Lodi shall provide at least
one (1) channel dedicated to access for use by the public as well ac governwntal
and educational agencies.
b. If the access channel is being utilized mre than -Aghty percent (80'0) of
the time between 4:00 p.m. ,and 11:00 p.m. for Twelve (12) consecutive mks,
Grantee shall, upon written notice from the City, make additional ccammnity access
channels) available for the same purposes (s), with a maximum of three (3)
c. Nothing in this section shall require Grantee to construct additional
channel capacity to the system for the sole purpose of providing additional access
channels.
d. Whenever any access channel is utilized less than four (4) hours per
day for six (6) days per week for twelve (12) consecutive weeks, the Grantee may
be permitted to utilize unused access channel capacity for different and
additional purposes, under rules and procedures established by the City.
e. Grantee shall record all requests for use ofaccess channel.
Whenever such records indicate in the opinion of the City Council that an
excessive number of people or programs are being turned away for lack uf available
access channel capacity; or whenever the criteria in paragraph (b) are exceeded
for any one of the existing access channel uses, those access channels which have
been permitted by the City for "interim" use by a Grantee shall each be restored
to public, governmental or educational use as applicable.
5.16.410 Waivers.
a. Any provision of this Ordinance may be waived at the sole discretion of
the City by resolution of the City Council.
b. Grantee may subndt a request for waiver to the City Council at any time
during the franchise term. Such request for waiver may, at the sole discretion of
the City Council, be set for public hearing and a decision shall be made within
one hundred and twenty (120) days .following the submission. Procedures for
modification of franchise obligations shall be in compliance with Section 625 of
the Cable C.ommznicati ons policy Act of 1984.
C. The City Council may authorize the economic, technical or legal
evaluation of such waiver request and Grantee shall be required toreimburse the.
City for any expenditures incurred by City in connection with such evaluation.
_45_
d. This section is enacted solely for the- convenience and benefit of the
Grantor and shall not be construed in such a manner as to create any right or
entitlement for the Grantee.
5.16.420 Rxpijxed services and facilities.
a. A franchise application shall include a description of the grantee's
system design and a description of the broad categories of programming and
services being offered, including optional premium services, a description of
facilities being proposed for local origination programming, and facilities being
offered to various ccim mitt' institutions. The offer of the broad categories of
s
{ programming and services contained within a Grantee's application shall be deemed
a binding offer of sach Grantee for and to the benefit of the City and the
subscribers of Grantee. In the event a program originator ceases to provide a
service, or in the event the Grantee determines that other cable services may I*--
of greater benefit to subscribers, the Grantee may, subject to subsections b and
c, substitute or drop such services.
b. The system, after the incorporation of such substitute services, shall
satisfy the warranty made by Grantee to subscribers and potential subscribers in
its application for a franchise. The City Council, on behalf of system
subscribers, shall have the right to review any substitution of service or change
in broad categories of programming that the Grantee has made and may order a
change therein if it determines, after due hearing on notice, that the warranty
has been violated or that certain broad categories of programming and services
that were committed by Grantee in its Proposal are not being delivered. Any such
order shall issue only after a public hearing has been scheduled and held; and
written notice of such hearing shall have been provided to the Grantee and to the
-46-
public at least 30 days prior to such hearing. Any such order may be enforced by
an appropriate action in the Courts of California or of the United States. A
Grantee shall not, in relation to this section, be deemed to have waived any right
accorded to a franzhised cable television operator arising under the First
Amendrr-ent to the Constitution of the United States, or under the Cable
Com unications Policy Act of 1984.
c. Notwithstanding subsections a and b, a Grantee may, in accordance with
the Cable Cc mmnications Policy Act of 1984, upon 30 days' advance notice to the
City, .rearrange, replace or remove a particular cable service required by the
franchise if:
(1) such service is no longer available to the Grantee; or
(2) such service is available to the Grantee only upon the payment of
a royalty required under section 801(b) (2) of title 17, United States Code,
which the Grantee can d =rent:
(a) is substantially in excess of the amount of such payment
required on the date of thG Grantee's offer to provide such service, and
(b) has not been specifically corpensated for through a rate
increase or other adjustment.
Notwithstanding subsections a and b, a Grantee may take such actions to
rearrange a particular serv-1ce from one service tier to another, or otherwise
offer the service, if the rates for all of the service tiers involved in such
actions are not subject to regulation.
Section 5.16.430 Construction and technical standards.
a. Compliance with construction and technical standards.
Grantee shall construct, install, operate and maintain its system in a
manner consistent with all laws, ordinances and construction standards of the City
-47-
of Lodi; The Standards of Good Engineering Practices for Measurements on Cable
Television Systems, published by the National Cable Television Association, 1983;
and detailed standards submitted by Grantee as part of its application, which
standards are incorporated by reference in the franchise agreement. In addition,
Grantee shall provide the City, upon request, with a written report of the results
of Grantee's annual proof of performance tests. In the event of the repeal of FCC
Rules and Regulations, Part 76, Grantee shall pay the costs incurred by the City
for .any, technical assistance deemed necessary by the City for obtaining
independent verification of technical ccupliance with all standards. This
includes the costs that may be incurred by the City for checking compliance during
the evaluations required in Section 5.16.298.
b. Additional specifications
Construction, installation and maintenance of the cable system shall be
performed in an orderly and workmanlike manner. All cables and wires shall be
installed, where possible, parallel with and in the same manner as electric and
telephone lines. Multiple cable configurations shall be arranged in parallel and
bundled with due respect for engineering considerations. Underground
installations shall be in conformance with applicable codes.
Grantee shall at all times comply with:
(1) National E'_ectr.Lcal Safety Code (National Bureau of Standards);
(2) National Electrical Code (National Bureau of Fire Underwriters);
(3) Bell System Code of Pole Line Construction; and
(4) The Standards of Good Engineering Practices for Measurements on Cable
Television Systems (National Cable Television Association), 1983.
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Furthermore, the system shall not endanger or interfere with the safety of
persons or property in the franchise area or other areas where the Grantee may
have equipment located.
SECTION 2. All ordinances and parts of ordinances in conflict herewith are
repealed insofar as such conflict may exist.
SECTION 3. This ordinance shall be published one time in the "Lodi -News
Sentinel", a daily newspaper of general circulation printed and published in the
City of Lodi and shall be in force and take effect thirty days from and after its
passage and approval.
Approved this day of
Attest:
ALICE M. REIMCHE
City Clerk
MAYOR
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I lb
State of California
County of San Joaquin, ss.
I, Alice M. Reimche, City Clerk of the City of Lrdi, do hereby certify that
ordinance No. was introduced at a regular meeting of the City Council of
the City of Iiodi held
and was thereafter passed, adopted and ordered to print at a regular meeting of
said Council held by the following vote:
Ayes: Council M&nbers -
Noes: Council Members -
Absent: Council Members -
Abstain: Council Members -
I further certify that Ordinance No. was approved and signed by the Mayor on
the date of its passage and the same has been published pursuant to law.
Approved as to Form
RONALD M. STEIN
City Attorney
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ALICE M. REIMCHE
City Clerk
TO: The Honorable Mayor and
Members of the City Council
FROM: City Manager
SUWEC,T: Cable Television ordinance
The attached letter written by Ms. Mary Helen Barro, General Manager,
King Videocable, addressed to the cable company's attorney, Mr. Robert
Mullen, provides an overview of the current procedures relative to
custcr er service calls. Mr. Mullen as} ed that��isis new be ting to allow to City Councihrembers prior to tomorrow nig_
sufficient ti*re for review.
16 December 1985
Mr. Robert H. Mullen, Esq.
Mullen, Sullivan & Newton
1111 West Tokay Street
Lodi, California 95240
Dear Bob:
000
COPP:;".
The following will provide you with an overview of our current procedures
relative to customer service calls, along with ail update as to recent
improvements made throughout the system in this regard.
Additionally, we have prepared an estimate of costs which would be incurred
by King Videocable, and in turn our subscribers, should the City Council
request that we augment our present system of staffing.
CURRENT STATUS - CUSTOMER SERVICE CALLS
We have made major improvements here, following our "tune-up" of the system.
At present we are scheduling same-day or next -day appointments with no
difficulty. For customers who work we schedule either a first or last
appointment of the day. Example: Either between 8:00 AM and 9:00 AM or
between 4:00 PM and 5:00 PM, to minimize the stay-at-home time for customers.
Another alternative we arrange is to call the customer approximately 15 to
20 minutes before our field representative will arrive at the customer's home.
The majority of customers are satisfied with either an AM or PM appointment.
The above arrangements take care of about 99.5% of our quests for service
calls. Should a customer not be able to be home between 8:00 AM and 5:00 PM
we will then schedule an appointment as soon after 5:00 PM as possible. We
do try to minimize these calls for our daytime crew, however, in order to
minimize overtime pay expenses.
Afterhours and weekend requests for service are handled by our stand-by
personnel. Calls are answered by our telephone answering service, who then
calls our stand-by Technician.
Our stand-by technician is called immediately under the following conditions:
1. Any individual reporting either "no cable" or "snow on all channels."
2. Any area outage, or five (5) or more calls from a specific area reporting
a similar reception problem.
3. Any emergency situation reported by the police, fire department, or other
it
���IIYl�inn�n.m lmnlllq��lnYllll .�,
E3
Mr. Robert H. Mullen, Esq.
16 December 1985
Page Z
emergency response agency or public utilities which require cooperation/
assistance from King Videocable, regardless of the hour.
4. After 9:00 PM, seven days per week, the stand-by technicial is called
for those cases involving area outages and emergencies only. Individual
calls for "no cable" or "snow on all channels" are handled as soon as
possible after daybreak the following morning. Customers with minor
break-up of pictures on one or more channels are scheduled on d7 rst-come,
first-served basis the next day, Monday through Friday.
Please keep in mind that to send a technician out after dark on calls which
require climbing poles and checking mid -strand sections of cable/amplifiers
is extremely dannerous, and that our staff often require daylight in order to
complete repairs.
WEEKEND SERVICE CALLS
King Videocable has attempted to provide weekend ins�allations and service calls
for our customers, but with very poor results. Regretably, customers make
appointments and then fail to stay home. This results in a great unnecessary
expense for the company, and in turn, our subscribers.
From June 1, 1985 through December 1, 1985 we experienced the following
percentage of customers not at home to keep appointments:
DAYS OF THE WEEK INSTALLATIONS SERVICE CALLS
Monday - Friday 10% 10%
Weedends 30 to 40% 40 to 50%
During this time we also kept our offices open on Saturdays for walk-in customers.
At first, only one or two per day came in. Later a few more, but never more than
five or six persons came in during any given day, for the entire period.
As a result, we have informed our customers that our offices would no longer be
op ---n on weekends, effective December 1, 1985. While we do respond to "no cable",
"snow on all channels", area outages and emergencies evenings and on weekends,
we no longer schedule appointments for minor service and installations after hours
and on weekends. TO DATE WE HAVE HAD N IAPLAINTS ABOUT THIS CHANGE IN POLICY.
COMPARISON OF KING VIDEOCABLE/PACIFIC BELL/P.G.& E. RESPONSE POLICIES
King Videocable's service response guidelines compare very favorably with those
of the telephone and gas companies, which follow:
Pacific BPI)
The telephone company will no longer come to the home to service telephone
equipment unless their records indicate that a customer is leasing their equipment.
If there is static on the line or phone service is totally out, the telephone
company will respond as. follows:
Mr. Robert ti. Mullen, Esq. 16 December 1985
Page 3
1. AM or PM appointments are scheduled on a first-come, first-served basis.
Commercial customers are given a 4 -hour block of time, while residential
customers are given a 6 -hour block of time during which the repairman will
arrive, depending on the time of day the problem is reported, Monday thru Friday.
2. The repair crews are on duty from 8:00 AM to 6:00 PM. Telephones are
are answered between 7:00 AM and 9:00 PM by a combination of office and
part-time office personnel. After 11:00 PM an on-call individual gets the
call. Customers who call after 8:00 PM evenings must wait until the next
day for repairs, beginning at 8:00 AM.
3. The only exception to the above policy is a "critical service business"
such as a hospital, police, fire department, etc., or an individual with
a medical emergency situation.
4. The telephone company will make appointments for service Saturdays, if a
customer cannot be helped during the week. However, the only customers who
will receive repair service on Sundays, are those noted in item 3 above,
i.e. critical service or medical emergency cases.
P.G.& E.
Usually, P.G.& E. likes to schedule appointments for the next day, with the.
customer waiting between 9:00 AM and 5:00 PM, Monday through Friday. However,
they do have alternatives as follows:
1. P.G.& E. will respond to an emergency round the clock, with a minimum
response block of two hours.
2. Anything short of an emergency gets next -day service, preferably all -day
waits. They will schedule AM or PM. If a customer calls in the AM,
sometimes they can get a PM appointment for the same day. But usually, it's
a next -day AM or PM arrangement. Non -emergency calls are not set on Sundays.
However, even with P.G.& E., emergencies are scheduled according to the work-
load for that date, regardless of which day of the week it is.
AUGMENTING KING VIDEOCABLE STAFF/SERVICE
Under our current system, with full staff and office hours available Monday
through Friday, 8:30 AM to 5:00 PM; with a telephone answering service and one
stand-by technician available the balance of the 24-hour period, our annual
costs are approximately $12,000.00 for the period from 5:00 PM to 8:30 AM Monday
through Fridays and weekends.
Projected costs for extending our services as indicated in the City Attorney's
memorandum to His Honor the Mayor and Members of the City Council, dated
December 6, 1985 for this same block of time are approximately $168,850.00.
This represents an increase to the Basic Customer of approximately $1.70 per month.
Mr. Robert H. Mullen, Esq.
16 December 1985
Page 4
Of course, these estimated figures are based on 1985 rates and salaries and
would be augmented as applicable for 1986 and beyond.
A modified plan with an additional two office personnel plus a part-time
technician working the 5:00 PM to 11:00 PM shift, Monday through Friday, with
the answering service taking over the balance of the time, calling a
stand-by technician, would increase costs by approximately.$50,000 to $65,000.00
annually, depending on the arrangements. If these additions were made, the
approximate monthly increase to our customers would be $.63.
King Videocable would be willing to consider these added expenses to ourselves
and our subscribers, if the Mayor and City Council request that we do so.
However, in view of the great improvements we have made in recent months, both
in quality of pictures and service responses, it is our opinion that our customers
will be unwilling to absorb the additional expense.
Sincerely,
Mary 'elen Barro
General Manager
MHB:a
cc: Mr. Richard D. Shay
1
I
MEMORANDUM
TO: Cliente 1+ose Communities Are Served
By Priv�►t*ly-Owned Cable Television Systems
FROM: Alan J,: ith, Joseph Van Eaton and Donald Weightman
ANK Tit
DATE: Decembey 2, 1985
RE: Legal MvXground to Supreme Court Case on Cable
Franch §4Zg and the First Amendment
As you:4;,�how, last year the cable industry and the
National League.18f Cities negotiated compromise federal
legislation on o6b a television. The legislation took away most
of the Cities' Vitas authority over cable television but confirmed
the Cities' autht�rjty over franchising. Now, the cable industry
has launched a BBsr of broad constitutional attacks on the
Cities' franchigi-ng authority and on related pro -city provisions
of the the 1984 Ells Act. In an important case now before the
Supreme Court (d"}, the cable company plaintiff and its
allies are chail@nginq the Los Angeles franchising process on
constitutional %tounda.
The cae@ arose when the City of Los Angeles denied a
request for a fr-elr=hise submitted by Preferred Communications
Inc. (PCI). PQ_ -I took the City to court, arguing on
constitutional %Fgunds that (1) the City may not choose which
among the several,oable applicants will be allowed to use City
rights of way 4Bd (2) the City lacks authority to impose system
requirements (su@h as channel capacity requirements, leased
access and pub1 * accass) as a condition of granting the
franchise. The psma did not go to trial. Instead, the City
moved to dismiec.VCI' s complaint. The District Court granted the
City's request, 41 the Court of Appeals reversed the District
Court's dismisga4 of PCI's complaint. See Preferred
Communications. o.y. City of Los Angeles, 754 F.2d 1396 (9th
Cir. ].985) .
The Cc_Uyt of Appeals characterized the question before
it as follows:
Can thl City, consistent with the First
Amendm€avi#, limit access by means of an auction
[franoh s.ingj process to a single cable
televit-ion company, when the ... [facilities]
are phYs_iCally capable of accomodating more
than QBo gyatem?
g
- 2 -
754 F.2d at 1401. The Court of Appeals concluded that the First
Amendment foreclosed the City from granting an exclusive
franchise if the City's public rights of way could accommodate
more than one cable system. Giv3n the procedural posture of the
case, the Court credited PCI's factual arguments (subject to
being proved or disproved at trial) that there is room for PCI on
the poles and that cable is not a natural monopoly in Los
Angeles. .1/ Also; the Court found that the'City had not yet
shown an exclusive franchise was justified to avoid undue
disruption of public rights-of-way.
As part of its First Amendment analysis, the Court of
Appeals concluded that the City's utility poles and public rights
of way become a public forum once they are offered to a cable
system, and the City may not foreclose additional cable systems
if there is room.
The City may not [through the cable
franchising process] solicit "bids" from
prospective speakers and deny access to its
facilities to all save the highest "bidder"...
Instead, the City must content itself with
uniformly applying to all applicants
regulations tailored to minimize the burden on
public resources and granting franchises to
all who are willing to satisfy the City's
legitimate conditions.
754 F. 2d at 1409.
What are the implications of the case for your City?
The decision means that a community may not act
arbitrarily to limit the number of cable television franchises.
Thus, if two or more cable systems apply to use utility poles and
public rights of way, a City would need to consider whether all
of the qualified applicants can be accommodated without undue
disruption of the public rights-of-way and without the kind of
destructive competition that would result in inadequate service
to subscribers or.would endanger the public safety. We see
nothing wrong in requiring Cities to consider such issues and
would not recommend that you participate in the case at the
l/ Hence, the Court did not consider whether the Los Angeles
franchise process would pasz.; muster under the First Amendment if
only one system could be accommodated on public rights of way, or
if economically only one system could survive in the City.
- 3 -
Supreme Court if that were all that were at stake. However,
there are aspects of the Ninth Circuit decision which are
troubling, and there is a danger that the Supreme Court may
decide the case in a way that undercuts local regulatory
authority over cable.
First, there are suggestions in the opinion of the Court
of Appeals that cable television is not a natural monopoly, and
therefore regulation by the City is not justified. However, in a
City where the Cable system is in fact a natural monopoly, the
City must have authority to regulate it; and requiring multiple
franchising would simply lead to destructive competition and a
serious risk of collapse of service or inadequate service. The
question of natural monopoly should be left to each community to
decide, subject to judicial review for cable applicants to guard
against any arbitrary denial of their rights. Cities should warn
the Supreme Court that destructive competition or ineffective
competition are real possibilities in some communities,
justifying exclusive franchising -or limitations on the number of
cable systems in those communities.
Second and perhaps most worrisome, if the Supreme Court
finds that cable systems have a very broad freedom to speak or to
be silent, it may oe difficult for Cities to require, for
example, that cable systems serve in less profitable
neighborhoods, or provide public access channels for others to �y
exercise their freedom of speech. You need to protect yourself
on these issues by arguing for regulatory authority to require`
such services in the case before the Supreme Court.
Third, it is important to fight the cable systems'
likely argument to the Supreme Court that the Court of Appeals' _a
decision in Preferred did.not go far enough and cable systems
cannot be regulated no matter what.
We attach a recent article on the potentially vast'
implications of the Supreme Court's review of the Ninth Circuit's
decision in the Preferred case._
Attachment
l)IultICnUVI'lfI tveWL - -)(ie/135
%rol. 6 No. 46 — November 18, 1985 — 5100
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By J.L. Freeman
Washington Bureau Chiet I
WASItIN(;'t't)N, 1).C.•—Set-
ting the stage for what could be
a landmark niling on the Fint
Amendment right, of cable
television otK•rator,. the t;.S. i
Supreme Court Nov. 12 said it
would hear arguments in a shit by
a Loy Angeles olm-rator challcng- �
ing the city's franchising promss
The Ninth C;r uit Court of
Appeals last spring ruled that the
city could not prevent the cable
-Cal) e's hcen huffing
and puffing wanting it)
fret It First Amendment
case to the Supreme
Court ... So herr we go.
—cable attorney
operator, Preferred Communi-
cations Inc., from stringing wive
for cable service in an area
already served by another oper-
ator as long as there was enough
room on utility poles for a second
cable. The lower court held that
Preferred had a First Amend-
rnent right to provide service.
But attorneys here last week
Said that the case could have
implications far beyond the issue
of how manv cable operawn; may
,erve an area. It could. they said,
either provide major legal foun-
dation for city regulation of cable,
reversing a long pattern of dere-
gulatory laws and rulings. or, on
L` a other hand, could establish
full First Amendment rights for
operators, giving them important
ammunition for cha:lieges to
many of the city, state and
federal rules that govern cable
service.
Cable and city attorneys here
last week said the Supreme
Court's move took them by com-
plete surpise, and both sides said
they feared what it could mean
for their clients. Of the several
cable First Amendment cases
now before lower federal courts,
Preferrr-d, because there has
never been a curt ruling on the
facts of the case. se:e•mM the
riskiest, they said.
Although the Supreme G,urt
i
has dealt with cable cases beft ire.
i this will be the first case that
eniphasizes cable o1wrator First
Amendment rights in city fran-
chising process.
"This has to be viewed as a roll
of the dice for the entire kitty."
said Nick Miller of Miller cif
Young, who represents several
cities. "Any attorney has to get
nervous looking at that."
- Following standard court 1:' r
cedure, Los Angeles will file its
opening brief about Jan. 1 With
Preferred resp,)nding about Feb.
1. Oral arguments would be in
March or April with a decision by
July 1 when the court term ends.
i The attomeys noted the Supreme
Court has overturned the Ninth
Circuit more often than anv other
circuit in recent veers.
I '•Interms ofthe applicants.the
two black businessmen who own
Preferred, we're disappointed
this action will mean about a one-
year delay in their starting their
cable business," said Sol
Schadhause of Farrow, Schild-
hause R Rains which represents
Preferred. "But for the cable
industry we're delighted.
"There are a lot of cases pend-
ing out there in a lot of circuit
courts." Mr. Schildhause said.
"We're hoping the Supreme
Court here will set clear ground 1
rules so there won't be any weird
pioneering out there that could
get dhe cable industry in trouble-
"lf,ead attorney Harold) Far -
row's confident well win this one,
the Supreme Court will say cable
has First Amendment rights," he
said. "But that doesn't mean
cities won't be able to do any-
thirg."
National Cable Television
Association president James
Mooney issued the following
statement: "We Mould rather that
this case have gone back for trial
in the lower courts, because the
issues involved have never been
argued on the merits- But, if the
Supreme Court wants to take a
look at cable's First Amendment
rights, then I think we have a
good case to make. Three appeals
courts lin four cases) recently
have ruled that cable operator.
enjoy First Amendment protec-
tion, and we hope the Supreme
Court will also adopt that vie". ••
Both city and cable attorney,
last week emphasized no one can
predict what the high court will
do on any case and that it could
rule for either side, issue only a
narrow ruling, or send the case
back for trial on the facts.
"What we would hope to
gain," said city attorney Norman
Sind. "is a clear statement by the
court that while there are clearly
First Amendment righ:s protect-
ing cable operators in their edi-
to.- W channel-chooaing capacity,
those rights cannot be extended
to interfere with a fairly run,
objective franchising process."
A lora of city franchising abil-
ity "would be an ultimate loss to
the public.". said N r..Sinel,
of Arnold d Porter. "The entire
structure would fall," he said,
and only wealthy neighborhoods
would pet cable service.
"The whole concept of fran-
chising is at issue here," agreed
one prominent cable attorney
who asked that his name not be
used. But he expressed concern
that the Supreme Court might
narrow the lower court's outline
of cable's rights- "Clearly their
concern cannot be to expand
Preferred's holdings because
they're about as broad as they
could be. So, therefore, the high
court has to be concerned with
restricting the holdings in Prefer-
red." he said.
As one NCTA official said,
"One of the problems with Pre-
ferred is it's hard to say precisely
what issue that case presents.
That decision tends to wander
around a bit."
According to Jack Cole, of
Cole Raywid & Braverman, and
a leading cable attoreney, a key
to the case will be whether the
Supreme Court rules that a fran-
chise is a right under the First
I amendment or that a franchise
is a privilege under the -First
Amendment. Cities, he noted,
could regulate a privilege more
1 than a right.
"There are lots of people in the
cable industry very nervous
about this case, no matter which
Iway it goes," said another cable
attorney who asked his name not
be used. If the Supreme Court
agreed with Preferred, the attor-
III ney said, any number of oper-
ators could build an area. "A
great many people like the de f ac -
to exclusive contract—they're
concerned with how many, what
concessions a city can get in
I exchange for that contract. If
those are reasonable, they would
rather have the status quo than
open -season on franchising."
According to Mr. Miller, a 100
percent city win would overturn
manv recent Federal Communi-
cations Commission and Con-
: gressional actions which deregu-
lated cable.
_Z_
Because the case was never
tried at the lowest court level and 1
therefore has no factual record.
Miller said, the court prob-
will act on general First
Amendment law rather than on
•t,- specific Los Angeles situa-
tion. '"Chat's a high-risk case for
both sides," he said.
"I think -it's good that the
Supreme Court is going to look
at the issue of First Amendment
rights for cable operators in terms
of franchising." said cable ittor-
ney fav Ricks of Hogan A Hart -
son. "I don't think Preferred is
the best case for that because
there is no factual record. I find
that to be an unusual and troubl-
ing aspect."
However, a city attorney who
asked that his name not be used
said cities always lose when a
court deals only with the
theore-tical aspect of cable. "This is not
the case the cities wanted before
Ithe Supreme Court," the attorney
said.
"Cities win when courts under-
stand what cable is." the attorney
said. "Cities lose on dworectical
cases.••
Robert Rusin, of Preston.
Thorgrimson. Ellis d` Holman,
represents major cities and agreed.
The case is dangerous because
courts needed a record to "have
a more complete understanding"
of the "reality" of cable, Mr.
Ruxin said, referring to natural
j monopolies and broken franchise
j promises.
I The attorneys last week also
noted the Supreme Court ruling
here would have some impact on
at least two other cases of major
importance to the cable industry.
But they said they weren't sure
what that impact would be.
The high court has been ask-
ed to hear Quincy-nmer, a ca. -4-
I to which the appeals court here
` ruled FCC regulations that cable
operators carry all local broad-
cast signals violated First
I Amendment rights Af cable
operators and programmers.
Also, now before the full Ele-
venth Circuit Court of Appeals is
Florida Power u FCC, a case in
which a three judge panel ruled
the 1973 pole attachment act was
unconstitutional and :hat the
I FCC could not regulate rates
j cable operators pay utilities for
I space on poles.
The National League of Cities
will back up Los Angeles, said
Cynthia Pols, NLC counsel. "We
stand to gain a lot possibly," she
said. "The whole question of
cable operators being like news,-
papers
ews-
papers will be put to rest.'"
If the court rules that cable hay
rights similar to those of news-
paper publishers, and that tele-
phone poles are public forums on
which anyone can speak "then
1 that doesn't leave much to
regu-late," Ms. Pots said. If the court
said cable was a full First Amend-
ment speaker but poles were not
public forums, then cities would
still have some regulation author-
itv, she said.
"In this area we've lost in every
circuit we've been in," Nis. Pots
said.
Concluded another cable
attorney: "Cable's been huffing
+ and puffing wanting to get a First
Amendment rights caste to the
Supreme Court . . . .so here we
Ko.' C, --
SPIEGEL & MCDIARMID
BAR- -
MARC :. P.'PEP
TO: Clients Whose Communities Are
Served by Privately Owned Cable
Television Systems
Dear Clients:
'01N M C11EL ACPAGNA
_I''DSEPr vAN EAT ::N
STEP -EN C N-C"OLS
PATPICIA E STACK
P DANIEL BRUNEP
SCOTT � STRAJSS
NANCY E WIEGERS
BEN FINKELSTE:N
DONALD WE'r,r -TMAN
SCOTT tiEMP;,ING
MAPGARET A MCGOLDAICK
DANIEL � SC"NEE
BARBARA S ESS;N'
Re: Supreme Court Case on Local Franchising
Authority
The purpose of this letter is to alert you to a case now
before the Supreme Court concerning the franchising of cable
television systems, City of Les Angeles v. Preferred
Communications, Inc., No. 85-390. In that case, the Supreme
Court will consider for the first time whether the First
Amendment rights of cable operators prohibit a City from granting
an exclusive cable television franchise.. We discuss the legal
issues (and their background) in more detail in the enclosed
short memorandum. Please pass this letter and memorandum along
to all city officials who deal with cable television issues. The
case is important to you because the Supreme Court's decision may
affect franchising or refranchising in your community. It may
also affect your ability to oversee cable television in your
community, to negotiate effectively with cable television
operators, and to enforce promises made by those operators.
Given the importance of the issues involved, we plan to file an
amicus curiae brief with the Supreme Court on behalf of our
interested cable -affected clients, in support of City regulatory
authority. Your City may want to join in that brief.
Other City groups will probably also file amicus briefs, 1/
but we do not know whether those other briefs will cover the key
points that we shall cover on behalf of our interested clients,
as described in the enclosed memorandum. Because the brief must
be filed by the end of December, please let us know by December
1/ Among the groups considering filing amicus curiae briefs is the
National League of Cities.
1,350 NEW YORK AVENUE N W
GE E5P.EGE:.
WASHINGTON DC 20005-4798
JrEPr _ _�Aa..i.p
- •Y`PA -Frac.•.
VABLCN
TELEPHONE !2021 879-4000
P`,BE P' A
TELECOPIER 1202) 879-4001
_AnnE5 N _- P'%0
cRANCES E cPANC:S
DANIE, , _^A vC50"+
✓ANTE_ Gl.'TTMAPI
PETEP K MATT
,AV'.i.: P STPAV5
= B_Aip
December 2, 1985
C TPA,GEP
'CJ -BE TT
BAR- -
MARC :. P.'PEP
TO: Clients Whose Communities Are
Served by Privately Owned Cable
Television Systems
Dear Clients:
'01N M C11EL ACPAGNA
_I''DSEPr vAN EAT ::N
STEP -EN C N-C"OLS
PATPICIA E STACK
P DANIEL BRUNEP
SCOTT � STRAJSS
NANCY E WIEGERS
BEN FINKELSTE:N
DONALD WE'r,r -TMAN
SCOTT tiEMP;,ING
MAPGARET A MCGOLDAICK
DANIEL � SC"NEE
BARBARA S ESS;N'
Re: Supreme Court Case on Local Franchising
Authority
The purpose of this letter is to alert you to a case now
before the Supreme Court concerning the franchising of cable
television systems, City of Les Angeles v. Preferred
Communications, Inc., No. 85-390. In that case, the Supreme
Court will consider for the first time whether the First
Amendment rights of cable operators prohibit a City from granting
an exclusive cable television franchise.. We discuss the legal
issues (and their background) in more detail in the enclosed
short memorandum. Please pass this letter and memorandum along
to all city officials who deal with cable television issues. The
case is important to you because the Supreme Court's decision may
affect franchising or refranchising in your community. It may
also affect your ability to oversee cable television in your
community, to negotiate effectively with cable television
operators, and to enforce promises made by those operators.
Given the importance of the issues involved, we plan to file an
amicus curiae brief with the Supreme Court on behalf of our
interested cable -affected clients, in support of City regulatory
authority. Your City may want to join in that brief.
Other City groups will probably also file amicus briefs, 1/
but we do not know whether those other briefs will cover the key
points that we shall cover on behalf of our interested clients,
as described in the enclosed memorandum. Because the brief must
be filed by the end of December, please let us know by December
1/ Among the groups considering filing amicus curiae briefs is the
National League of Cities.
2
20 if you wish to join in the brief, especially if you have any
ideas or suggestions you would like to see incorporated in the
brief. We expect the total cost of this effort to be no more
than $15,000; we will not charge any individual city or community
participant more than $750 and will charge less if enough cities
join or total costs do not reach $15,000. Participants would
also receive a follow-up analysis of the Supreme Court's ultimate
decision in the case and the implications of that decision for
franchising and related community concerns. In any event, it is
important for your City to keep a careful watch on this case
because of the effect it will likely have on negotiations and
litigation between ci•:.ies and cable operators. If you have any
questions, please let us know.
Sincerely,
Alan J.Roth
Joseph Van Eaton
Donald Weightman
JVE:mer
Enclosure
1521 S. Stockton Street
King Videocaale Company California 95240
2091369-7451
An Affiliate of King Broadcasting Company
December 16, 1985
Mr. Thomas A. Peterson
City Manager
City of Lodi
221 West Pine Street
Lodi, California 95240
Dear Tom:
This letter is in response to your request for a written statement regarding
our services to customers wishing to block out the Playboy Channel on cable
television.
As I explained, current technology provides for scrambling of the video portion
of all premium services, including the Playboy`Channel. However, there may
be brief periods (two to three seconds) when the video may be recognizable on
certain television sets, depending on the electronics of those sets. The vast
majority of television sets will have a totally scrambled picture virtually all
of the time. The audio portion of the signals is not scrambled at this time.
However, we have found that, again - depending on the electronics of the TU
set, the audio portion of the signal may also be distorted.
For those subscribers wishing to totally block out both the visual and audio
portions of a given signal, we provide a Parental Control Unit which can be
obtained for a one-time deposit of $15.00. When the subscriber wishes to return
the control unit, we will return $10.00 of the deposit. $5.00 is retained in
order to cover costs of servicing it and returning it to stock for re -issue -
You should know that, from time to time, two other premium services (Show>;ime
anc HBO) may also contain programming considered to be of an adult nature. If
subscribers also wish.to block out these services, they may do so by. obtaining
a Parental Control Unit programmed to the channel in question.
Another method of blocking out both the audio and visual signal of a particular
channel is for the subscriber to obtain a Hamlin Converter which is available at
a monthly rate of $2.00. Our Hamlin Converters can be programmed to block out
certain channels completely. This must be done by our technical personnel and
subscribers are strictly prohibited from tampering with our converters, as they
may damage the equipment and be liable for a replacement charge of $200.00.
The electronics industry is expanding and developing at such a rapid rate, it's
difficult to keep pace with the latest developments. However, we are constantly
on the look -out for new equipment that will help us improve the quality of service
C1r_C 17
Mr. Thomas A. Peterson
e
December 16, 1985
Page 2
for our customers. One such recent development is a new remote control converter
introduced by Pioneer. We have ordered 300 but they are already on back -order
at the factory. The new Pioneer Remote Converter can be programmed much more
easily to block out certain channels. However, programming will still have to be
done by our technical personnel. As soon as they arrive, we will make them
available.
Please note that with the exception of Mrs. Dot Kurst, we have had no complaints
about the audio on the Playboy Channel for over a year. Parents who do not wish
to receive the audio, simply request the Parental Control Unit. We have had no
requests for Parental. Control Units to block the audio of other premium services.
All new King Videocable subscribers are informed, in writing, that the Playboy
Channel, and on occasion Showtime ane HBO as well,coffin ai programming of ars
adult nature. They are also notified of the availability of the Parental Control
Unit and programmable converter.
We will continue to inform all new subscribers of the audio and video blocking
equipment which we provide. Additionally, as new electronic developments are
introduced, we will make them available to our interested subscribers whenever
possible.
I hope I have answered all your questions as well as reassured you that we have
taken every measure possible, to provide desired protections for our customers
in this matter. If you need additional information, I'm as near as the telephone.
Sincerely,
Aa
Mary telen Barro
General Manager
MHB:a
cc: Mr. Robert H. Mullen, Esq.
Mr. Richard D. Shay
-CIfY COUNCIL
A. PETERSON
C T?r y (,-P • 3
DAVID M. HINCHMAN, Mayor
'L �. �•.I � ALICE M.
City Manager e
REIMCHE
FRED M. REID
City Clerk
Mayor Pro Tempore CITY HALL. 221 WEST PINE STREET
EVELYN M. OLSON CALL BOX 3006 RONALD
M. STEIN
JAMES W. PINKERTON, Jr. LODI, CALIFORNIA 95241-1910
City Attorney
JOHN R. (Randy) SNIDER (209) 334-5634
-
.. f
2
November 27, 1985
Ms. Mary Helen Barro
Manager, King Videocable
1521 S. Stockton Street
Lodi, CA 95240
Dear Mary Helen:
This is a follow up to our telephone conversation earlier today
concerning the operation of the playboy channel on our cable
v
television system. It is my understanding that the picture on
this channel is "scrambled" so that only those subscribing to this
service receive a picture which can be viewed. The sound is
scmthing else again. You have advised me that it is not possible
" to "scramble" the sound at this tire. You also advised me that
` = you have ordered new equipment whichwill rake it possible to
scramble the sound transTmission wfien this equipmlent is installed
in the hone, similar to your present parental control devices.
However, I also understandthat your custaners who do not have
this equipmnt *installed in their hones will still receive
unscrambled Playboy channel sou-nd.
I would appreciate a written response from you as to how your
- • ccnpany proposes to address this issue in the future.
3
Siricerely,
Thomas A. Peterson
n
City Manager
TAP/lh