(1) Applications – Generally.
(a) Application Required. An application must be filed for an initial and renewal cable system franchise, or for approval of a transfer. A request for renewal filed under 47 USC § 546(h) need not contain the information required by subsection (1)(b) of this section.
(b) Application Contents. The City Manager may specify the information that must be provided in connection with an application, and the form in which the information is to be provided. At a minimum each application must identify the applicant, show that the applicant is financially, technically and legally qualified to construct, maintain and operate the cable system, contain a pro forma showing capital expenditures and expected income and expenses for the first five years the applicant is to hold the franchise, and show that the applicant is willing to comply with its franchise obligations. In addition, any application for an initial or renewal franchise or rebuild of the applicant’s system and/or facilities, must describe in detail the cable system that the applicant proposes to build, show where it will be located, set out the system construction schedule, and show that the applicant will provide adequate channels, facilities and other support for public, educational and government use (including institutional network use) of the cable system. The detailed description of the physical facilities proposed shall include at least the following:
(i) A description of the channel capacity, technical design, performance characteristics, headend, and PEG access (and institutional network, if required) facilities and equipment;
(ii) The location of proposed facility and facility design, including a description of the miles of plant to be installed, and a description of the size of equipment cabinets, shielding and electronics that will be installed along the plant route, the power sources that will be used and a description of the noise, exhaust and pollutants, if any, that will be generated by the operation of the same; provided, however, that, if some of the descriptive data is not available at the time of application, the franchise may be issued subject to conditions that the data be filed and approved by the City before construction begins and that the franchise will be deemed to be forfeited if the data is not supplied and approved; provided, further, that the foregoing proviso does not authorize the grant of a franchise where there is not sufficient information to appraise the impact of the applicant’s proposal;
(iii) A map of the general route the facility will follow; a designation of the portions of the system that will be placed aboveground and the portions that will be placed underground, and the construction techniques that the applicant proposes to use in installing the system aboveground and underground; a schedule for construction of the facility, describing when and where construction will begin, how it will proceed, benchmarks indicating the scheduled completion of portions of the system and when construction will be completed; and the expected effect on right-of-way usage, including information on the ability of the public rights-of-way to accommodate the proposed system, including, as appropriate given the system proposed, an estimate of the availability of space in conduits and an estimate of the cost of any necessary rearrangement of existing facilities;
(iv) A description, where appropriate, of how services will be converted from existing facilities to new facilities, and what will be done with existing facilities;
(v) A demonstration of how the applicant will reasonably meet the future cable-related needs and interests of the community, including descriptions of the capacity, facilities and support for public, educational, and governmental use of the system (including institutional networks) applicant proposes to provide and why applicant believes that the proposal is adequate to meet the future cable-related needs and interests of the community;
(vi) A demonstration of the financial qualifications of the applicant, including at least the following:
(A) The proposed rate structure, including projected charges for each service tier, installation, converters, and all other proposed equipment or services;
(B) A statement regarding the applicant’s financial ability to complete the construction to meet the time frame proposed and to operate the cable system proposed certified by the applicant’s chief financial officer;
(vii) A demonstration of the applicant’s technical ability to construct and/or operate the proposed cable system;
(viii) A demonstration that the applicant is legally qualified, which proof must include a demonstration that the applicant:
(A) Has received, or is in a position to receive, necessary authorizations from state and federal authorities;
(B) Has not engaged in conduct (fraud, racketeering, violation of antitrust laws, consumer protection laws, or similar laws) that might lead the City to conclude that the applicant cannot be relied upon to comply with requirements of a franchise or provisions of this chapter, or to deal honestly with the City or its residents;
(C) Is willing to enter into a franchise, to pay required compensation and to abide by the provisions of applicable law, including those relating to the construction, operation or repair of its facilities; and has not entered into any agreement that would prevent it from doing so; and
(D) The applicant must not have submitted an application for an initial or renewal franchise to the City, which was denied on the ground that the applicant failed to propose a cable system meeting the cable related needs and interests of the community, or as to which any challenges to such franchising decision were finally resolved (including any appeals) adversely to the applicant, within three years preceding the submission of the application.
(ix) The extent that the applicant is in any respect relying on the financial or technical resources of another person, including another affiliate; proofs should be provided for that person.
(x) A description of the applicant’s prior experience in cable system ownership, construction, and operation, and identification of cities and counties in Washington in which the applicant or any of its principals have a cable franchise or any interest therein; provided, that an applicant that holds a franchise for the City and is seeking renewal of that franchise need only provide this information for other cities and counties in Washington where its franchise is scheduled to expire during the 12-month period prior to the date its application is submitted to the City and for other cities and counties in Washington where its franchise had been scheduled to expire during the 12-month period after the date its application is submitted to the City. If an applicant has no other franchise in Washington, it shall provide the information for its operations in other states; and
(xi) An affidavit or declaration of the applicant or authorized officer thereof certifying the truth and accuracy of the information in the application, and certifying that the application meets all requirements of applicable law.
(A) To be accepted for filing, an original and six copies of a complete application must be submitted. All applications shall include the names and addresses of persons authorized to act on behalf of the applicant with respect to the application.
(B) An applicant (and the transferor and transferee, in the case of a transfer application) shall respond to any request for information from the City, by the time specified by the City.
(c) Incomplete Applications. An application may be rejected if it is incomplete, or if the response to the City’s requests for information is not timely and complete.
(2) Application for an Initial Franchise or Renewal Franchise.
(a) Scope. This section establishes additional provisions that apply to an application for an initial franchise, or a renewal franchise application that is not governed by 47 USC § 546(a) through (g).
(b) Process. Any person may apply for an initial or renewal franchise by submitting an application therefor on that person’s own initiative, or in response to a request for proposals issued by the City. If the City receives an unsolicited application, it may choose to issue a request for additional proposals, and require the applicant to amend its proposal to respond thereto. The City shall promptly conduct such investigations as are necessary to act on an application.
(c) Consideration of Application. In determining whether to grant a franchise, the City may consider:
(i) The extent to which an applicant for renewal has substantially complied with the applicable law and the material terms of any existing cable franchise;
(ii) Whether an applicant’s quality of service under its existing franchise, including signal quality, response to customer complaints, billing practices, and the like has been reasonable in light of the needs of the community;
(iii) Where the applicant has not previously held a cable system franchise in the City, whether the applicant’s record in other communities indicates that it can be relied upon to provide high-quality service throughout any franchise term;
(iv) Whether the applicant has the financial, legal, and technical ability to provide the services, facilities, and equipment set forth in an application, and to satisfy any minimum requirements established by the City;
(v) Whether the applicant’s application is reasonable to meet the future cable-related needs and interests of the City, taking into account the cost of meeting such needs and interests;
(vi) Whether issuance of a franchise is in the public interest considering the immediate and future effect on the public rights-of-way, public property, and private property that will be used by the applicant’s cable system;
(vii) Whether issuance of the franchise would reduce or increase competition in the provision of cable service in the City;
(viii) Such other matters as the City is authorized or required to consider.
(d) Issuance of Franchise. If the City determines that issuance of a franchise would be in the public interest considering the factors described above, it may offer a franchise agreement to the applicant. No franchise shall become effective until the franchise is unconditionally accepted by the applicant, approved by the City Council, and the franchise agreement is signed by both parties.
(3) Application for Renewal Franchise Filed Pursuant to 47 USC § 546.
(b) Process. A franchisee that intends to exercise rights under 47 USC § 546(a) through (g) shall submit a notice in writing to the City in a timely manner clearly stating that it is activating the procedures set forth in those sections. The City shall thereafter commence any proceedings that may be required under federal law, and upon completion of those proceedings, the City may issue a request for renewal proposals and an application may be submitted for renewal. The City may preliminarily deny the application by resolution, and if the application is preliminarily denied, the City may conduct such proceedings and by resolution establish such procedures and appoint such individuals as may be necessary to conduct any proceedings to review the application.
(4) Application for Transfer.
(a) Scope. This section establishes additional provisions that apply to applications for transfer approval.
(b) Information. An application for transfer must contain all the information required by the City Manager, by subsection (1) of this section, and all information required by any FCC franchise transfer form.
(c) Consideration of Application. In determining whether a transfer application should be granted, denied, or granted subject to conditions, the City may consider the legal, financial, and technical qualifications of the transferee to operate the cable system; any potential impact of the transfer on subscriber rates or services; whether the transferor franchise is in compliance with its franchise; whether the transferee owns or controls any other cable system in the City; whether operation by the transferee may eliminate or reduce competition in the delivery of cable service in the City; and whether operation by the transferee or approval of the transfer would otherwise adversely affect subscribers, the public, or the City’s interest under this chapter, the franchise, or other applicable law. The proposed transferee shall pay all reasonable costs incurred by the City in reviewing and evaluating the applications.
(d) Minimum Conditions. In order to obtain approval of a transfer, an applicant must show, at a minimum, that: the transferee is qualified; the transfer will not adversely affect the interests of subscribers, the public, or the City; and that all franchise noncompliance issues have been resolved or, alternatively, that the transferee will assume all liability for such franchise noncompliance issues, known or unknown, arising before the date of the transfer. No transfer application shall be granted unless the transferee agrees in writing that it will abide by and accept all terms of this chapter and the franchise, and that it will assume all of the obligations, liabilities, and responsibility for all acts and omissions, known and unknown, of its predecessor franchisee, whether arising before or after the date of the transfer, for all purposes.
(5) Legal Qualifications.
(i) The applicant must be willing to comply with the provisions of this chapter and applicable laws; and to comply with such requirements of a franchise as the City may lawfully require.
(ii) The applicant must not have had any cable system or OVS franchise validly revoked (including any appeals) by the City within three years preceding the submission of the application.
(iii) The applicant must not have had an application to the City for an initial or renewal cable system franchise denied on the ground that the applicant failed to propose a cable system meeting the cable-related needs and interests of the community, or as to which any challenges to such franchising decision were finally resolved (including any appeals) adversely to the applicant, within three years preceding the submission of the application; and must not have had an application for an initial or renewal OVS franchise denied on any ground within three years of the application.
(iv) The applicant shall not be issued a franchise if, at any time during the 10 years preceding the submission of the application, applicant was convicted of fraud, racketeering, anticompetitive actions, unfair trade practices or other conduct of such character that the applicant cannot be relied upon to deal truthfully with the City and the subscribers, or to substantially comply with its obligations.
(v) The applicant must have the necessary authority under Washington and federal law to operate a cable system, or show that it is in a position to obtain that authority.
(vi) The applicant shall not be issued a franchise if it files materially misleading information in its application or intentionally withholds information that the applicant lawfully is required to provide.
(vii) For purposes of this section, the term “applicant” includes any affiliate of applicant.
(b) Exception. Notwithstanding subsection (5)(a) of this section, an applicant shall be provided a reasonable opportunity to show that a franchise should issue even if the requirements of subsections (5)(a)(iii)) and(5)(a)(iv) of this section are not satisfied, by virtue of the circumstances surrounding the matter and the steps taken by the applicant to cure all harms flowing therefrom and prevent their recurrence, the lack of involvement of the applicant’s current principals, or the remoteness of the matter from the operation of a cable system.
(6) Franchise Fee. A cable system operator shall pay to the City a franchise fee in an amount equal to five percent of gross revenues, or such other amount as may be specified in the franchise; provided, however, that if the franchise specifies an amount, that amount shall be subject to increase should federal limits on fee payments be eliminated or changed and other operators are subject to a higher fee.
(a) Bundled Services. In the event that the franchisee, during the term of the franchise, offers bundled, tied, or combined cable services (which are subject to the franchise fee) with noncable services (which may not be subject to the franchise fee) to subscribers, the combined revenues from such bundled services shall be allocated consistent with the standalone rates or prices for each individual bundled service advertised by the franchisee through its marketing materials or on its published rate card. In the event the franchisee does not advertise or publish separate standalone prices for any or all the individual services in the bundled service, the percentage that the price for the combined services is discounted from the regular retail rates of the individual standalone services shall be prorated across all of the services in the bundled package; provided, however, that the net revenues derived from services subject to mandatory tariff rates imposed by the Washington Public Utilities Commission (or other governmental entity having such authority) shall be deducted from the combined bundled service revenue to determine the revenue subject to the franchise fee. As an example, a franchisee may offer a “bundle” of video, voice and data services for a flat fee of $75.00 where the standalone retail rate for each of the services purchased on an individual basis would equal $100.00. Assuming that there is no service subject to the mandated tariff rate, the franchisee would apply a 25 percent discount to each service in the bundle. Thus, if the franchisee’s standalone retail rate for the cable service portion of the bundle were $50.00, for franchise fee computation purposes grantee would recognize cable service revenue in the amount of $37.50 and pay a franchise fee on that revenue.
(b) The definition of “gross revenue” is to be as inclusive as possible consistent with existing applicable law. If a change in federal law occurs subsequent to the effective date of this chapter, such change shall not impact the gross revenues definition in such a way to reduce gross revenues, unless the change in law specifically preempts the affected portion of the definition above.
(7) No Exclusivity. A franchisee may not require a subscriber or a building owner or manager to enter into an exclusive contract as a condition of providing or continuing service. However, nothing herein prevents a franchisee from entering into an otherwise lawful, mutually desired exclusive arrangement with a building owner or manager of a multiple dwelling unit or commercial subscriber.
(8) Rate Regulation and Consumer Protection.
(a) All Rates Subject to Regulation. The City may regulate the operator’s rates and charges, to the extent it is not prohibited from doing so by law. The City will regulate rates in accordance with FCC rules and regulations, where applicable. Except to the extent FCC rules provide otherwise, all rates and charges that are subject to regulation, and changes in those rates or charges must be approved in advance. The City Manager may take any required steps to file complaints, toll rates, issue accounting orders or take any other steps required to comply with FCC rate regulation rules. The City Council shall be responsible for issuing rate orders that establish rates or order refunds.
(b) No Rate Discrimination. Except to the extent preempted by federal or state law, an operator is prohibited from discriminating in its rates or charges or from granting undue preferences to any subscriber, potential subscriber, or group of subscribers or potential subscribers; provided, however, that a franchisee may offer temporary, bona fide promotional discounts in order to attract or maintain subscribers, so long as such discounts are offered on a nondiscriminatory basis to similar classes of subscribers throughout the franchise area; and a franchisee may offer discounts for the elderly, the disabled, or the economically disadvantaged, and such other discounts as it is expressly entitled to provide under federal law, if such discounts are applied in a uniform and consistent manner.
(c) Redlining Prohibited. An operator shall not deny access or charge different rates to any group of subscribers or potential subscribers because of the income of the residents of the local area in which such group resides.
(d) Customer Service.
(i) Each operator must satisfy FCC, state and the City’s cable customer service standards and consumer protection standards. The City’s cable customer service standards may be adopted by resolution. In the case of a conflict among standards, the stricter standard shall apply to the full extent permitted by law.
(ii) For violation of cable customer service standards, penalties will be imposed as follows:
(A) Two hundred dollars for each day of each material breach, not to exceed $600.00, for each occurrence of material breach.
(B) If there is a subsequent material breach of the same provision within 12 months, $400.00 for each day of each material breach, not to exceed $1,200 for each occurrence of the material breach.
(C) If there is a third or additional material breach of the same provision within 12 months of the first, $1,000 for each day of each material breach, not to exceed $3,000 for each occurrence of the material breach.
(iii) Any penalty assessed under this section will be reduced dollar for dollar to the extent any liquidated damage provision of a franchise imposes a monetary obligation on a franchisee for the same customer service failures. [Ord. 4298 § 4, 2016; Code 1970 § 15.95.240.]