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HomeMy WebLinkAbout89-07 OrdinanceRECORD OF ORDINANCES Dayton Legal Blank, Inc Form No 30043 Ordinance No. 89 -07 1 Passed AN ORDINANCE AMENDING CHAPTER 100 OF THE DUBLIN CODIFIED ORDINANCES REGARDING CABLE SERVICE AND COMPETITIVE VIDEO SERVICE TO COMPLY WITH THE ENACTED OHIO SENATE BILL 117. 20 WHEREAS, the Ohio General Assembly enacted Sections 1332.21 through 1332.34 of the Ohio Revised Code, and such enactment provides for a "uniform regulatory framework" on a statewide basis for the provision of cable television and/or other video service, WHEREAS, Sections 1332.21 through 1332.34 of the Ohio Revised Code became effective on September 24, 2007; and WHEREAS, Sections 1332.21 through 1332.34 of the Ohio Revised Code will substantially reduce the City of Dublin's ( "City ") traditional franchising authority under the Cable Communications Policy Act of 1984 as amended by the Telecommunications Act of 1996 (47 U.S.C. 521 et seq.) to regulate cable and/or video service offered in the City using facilities and equipment located in the City's public rights -of -way; and WHEREAS, the City's Codified Ordinances, Chapter 100 is greatly affected by the Ohio General Assembly above listed provisions of the Ohio Revised Code therefore Chapter 100 requires extensive amendment by repeal and replacement; and WHEREAS, the City has a current cable television franchise agreement with Wide Open West which expires by its own terms on or about January 2011 and pursuant to which Wide Open West pays franchise fees in the amount of three percent (3 %) of gross revenues which are defined by the franchise agreement to include, inter alia, advertising revenues; and WHEREAS, the City's prior cable television franchise agreement with Time Warner has expired and AT &T and Time Warner have filed with the State Department of Commerce for a video service authorization as provided by R.C. Section 1332.23, thereby terminating any cable television franchise agreements with the City; and WHEREAS, pursuant to R.C. Section 1332.23, any new video service provider intending to provide video service to subscribers in the City must apply for and obtain a video service authorization ( "VSA ") from the Director of the Ohio Department of Commerce; and WHEREAS, upon being granted a VSA by the Director of the Ohio Department of Commerce, the applicant shall be considered a competitive video service provider ( "VSP "); and WHEREAS, R.C. Section 1332.23 also permits a cable operator with an effective franchise agreement to terminate its franchise with the City, at its option, by applying for a state VSA when a competitive video service provider either gives notice that it will begin providing service to subscribers in the City or actually begins providing service to subscribers in the City, or if the FCC determines that the cable operator is subject to "effective competition" in the City pursuant to 47 CFR 76.907; and WHEREAS, under R.C. Section 1332.32, a VSP that is providing service to subscribers in the City pursuant to a state - issued VSA must pay the City a video service provider fee ( "VSP Fee ") based on a percentage of the provider's "gross revenues" derived from providing video service in the City, not to exceed five percent (5 %) of such revenues; and RECORD OF ORDINANCES Dayton Legal Blank, Inc Form No 30043 Ordinance No. Passed Page 2 20 L] �l WHEREAS, R.C. Section 1332.32 requires that in any calendar quarter the percentage of gross revenues on which VSP Fees are paid must be the same as the percentage of gross revenues that the cable operator pays pursuant to a franchise agreement that is in effect (or alternatively if multiple franchises are in effect in a jurisdiction, the lowest such percentage paid a cable operator pursuant to a franchise agreement that is in effect shall be paid), or, if there is no effective franchise agreement under which franchise fees are payable, the VSP Fee shall be zero percent (0 %) of gross revenues, unless the City determines by ordinance or resolution that the VSP Fee will be a higher percentage of gross revenues, not to exceed five percent (5 %) of gross revenues; and WHEREAS, R.C. Section 1332.32(C)(2) further requires the City to provide all VSPs offering service in the City with notice of the VSP Fee requirements within ten (10) days of receiving notice from the VSP that it will begin offering service in the City, or the VSP is not required to pay the VSP Fee to the City; and WHEREAS, R.C. Section 1332.32(B)(2)(g) provides that the VSP Fee is paid on a base of gross revenue received from subscribers having service addresses within the jurisdiction that consists of revenues as are defined in R.C. Section 1332.32(B)(1)(a -e) but specifically excludes revenues as defined in R.C. Section 1332.32(13)(2)(a -h), unless the City determines, by ordinance uniformly applicable to all VSPs, that advertising revenues as defined by R.C. Section 1332.32(B)(2)(g) are also be included in the base of gross revenues on which the VSP Fee is paid; and WHEREAS, R.C. Section 1332.32(B)(2)(g) requires the City to promptly notify affected VSPs of the ordinance determining to include advertising revenues in the base of gross revenues on which the VSP Fee is paid, but provides that the requirement to include advertising revenues in the base of gross revenues does not take effect until the first day of the first calendar quarter that begins more than thirty (30) days after giving such notice; and WHEREAS, in order to provide timely notice to a VSP of the VSP Fee, it is necessary for this Council to determine now that the percentage of gross revenues that shall be paid as a VSP Fee is three percent (3 %) and that advertising revenues in accordance with R.C. Section 1332.32(B)(2)(g) shall be included in the base of gross revenues on which the VSP Fee is paid, to authorize the City Manager or designee to provide notice of the VSP Fee to a VSP within ten (10) days of the City receiving notice that a VSP will begin providing service in the City; and WHEREAS, R.C. Section 1332.30(A)(2) requires that the City provide written notice to a VSP that it shall be required within one - hundred and twenty (120) days of receipt of that notice to provide the same number of public, educational and government access ( "PEG ") channels under the same service tier conditions and subject to the same channel reclamation conditions as maybe proscribed by R.C. Section 1332.30(A)(1)(a -b) for the current incumbent cable provider of video or cable service with the most recent obligation in the City; and WHEREAS, it is the desire of the city that all payments of VSP Fees continue to be made directly to the City, quarterly, no later than sixty (60) days after the end of a calendar quarterly; and WHEREAS, the PEG programming origination point for the City is currently and shall remain located at the 5620 Post Road, Dublin, Ohio building, unless and until the City shall designate otherwise; and WHEREAS, R.C. Sections 1332.21 through 1332.34 contain numerous requirements that a VSP provide certain specific notifications to the City, but otherwise fail to adequately RECORD OF ORDINANCES Dayton Legal Blank, Inc Form No 30043 Ordinance No. i Passed Page 3 20 1 1 1 proscribe the specific manner in which such notice should be provided and the City believes that such notice should properly be provided in writing to the City Manager by either certified mail, express mail or personal delivery, all evidenced by a return receipt; and WHEREAS, in order to enable the City to treat incumbent cable providers and VSPs appropriately and adequately and properly address all the requirements and conditions of Sections 1332.21 through 1332.34 of the Ohio Revised Code as enacted by the Ohio General Assembly, the City believes it is necessary to amend Chapter 100 of the Codified Ordinances of the City of Dublin. NOW, THEREFORE, BE IT ORDAINED by the Council, of the City of Dublin, state of Ohio, a majority of the elected members concurring: Section 1 . That Chapter 100 of the City of Dublin Codified Ordinances be repealed in its entirety and replaced by the following provisions: 100.01 Definitions: "Incumbent Cable Provider ". Any person who on the effective date of this Section is the holder of a cable franchise agreement with the City as granted pursuant to requirements of 47 U.S.0 541. "PEG ". Activities or actions performed for the benefit of public, educational and government video programming by the City or CPB. "Video Service ". The service defined in R.C. Section 1332.21(J). "Video Service Authorization or VSA ". The authorization granted to a video service provider in accordance with the requirements of R.C. Sections 1332.21 to 1332.34 et seq. "Video Service Provider Fee or VSP Fee ". The fee paid by a VSP in accordance with the requirements of R.0 Section 1332.32. "Video Service Provider or VSP ". A person, firm, or corporation granted a video service authorization under R.C. Sections 1332.21 to 1332.34 et seq. § 100.02 VSP FEE. In accordance with the requirements of R.C. Section 1332.32, all VSPs providing video service in the City pursuant to a VSA obtained from the Director of the Ohio Department of Commerce shall pay a VSP Fee in the amount of three percent (3 %) of gross revenues received from providing Video Service in the City, which gross revenue base shall include advertising revenues. The VSP Fee shall be paid quarterly, not later than sixty (60) days after the end of each calendar quarter. § 100.03 VSP FEE NOTICE PROVISION. Upon receipt of notice from a VSP that it will begin providing Video Service in the City pursuant to a state - issued video service authorization, the City Manager or his /her designee is authorized and directed to provide such VSP with notice of the VSP Fee as determined by this Council in § 110.140 which notice shall be delivered in a manner that provides for proof of timely delivery. § 100.04 VSP ACCESS PROVISION. Upon receipt of notice from a VSP that it will begin providing Video Service in the City pursuant to a VSA, the City Manager or his /her designee is authorized and directed to provide such VSP with notice that the RECORD OF ORDINANCES Dayton Legal Blank, Inc Form No 30043 Ordinance No. 89 -07 Passed Page 4 20 1 1 VSP shall be required to provide the same number of PEG channels in the City under the same service tier conditions and subject to the same channel reclamation conditions as may be proscribed by R.C. Section 1332.30(A)(1)(a -b) for the Incumbent Cable Provider with the most recent obligation in the City, which notice shall be delivered in a manner that provides for proof of timely delivery and shall state the appropriate number of PEG channels and service tiers required to be provided by the VSP within the City within one - hundred and twenty (120) days after delivery of such notice. § 100.05 FEE PAYMENT REQUIREMENTS. Any VSP Fee required to be paid to the City by a VSP shall be made quarterly and be remitted directly to the City via a negotiable instrument made payable to the City of Dublin, 5200 Emerald Parkway, Dublin, Ohio 43017, not later than sixty (60) days after the end of a calendar quarter. § 100.06 PEG ORIGINATION POINT. The PEG programming origination point of the City for the delivery of VSP access services shall be located at the 5620 Post Road, Dublin, Ohio building, unless and until the City shall designate otherwise. § 100.07 NOTICE REQUIREMENT. Any notice to the City that is required of a VSP in accordance with of R.C. Sections 1332.21 through 1332.34 shall be provided in written form to the City Manager either by certified mail, express mail or upon personal delivery, all evidenced by a return receipt. § 100.08 APPLICATION TO INCUMBENT CABLE PROVIDERS. Nothing in this Section shall apply to incumbent cable providers until they are granted a Video Service Authorization in accordance with R.C. 1332.21- 1331.34 et seq. Section 2. This Ordinance shall take effect and be in force on the earliest date permitted by law. Passed this 19 day of ,/(JD O e t, b GE/ , 2007. Mayor - Presiding Officer ATTEST: Clerk of Council I� CrrY OF DUBLIN_ Office of the City Manager 5200 Emerald Parkway • Dublin, OH 43017 -1090 Phone: 614- 410 -4400 • Fax: 614- 410 -4490 TO: Members of Dublin City Council FROM: Jane S. Brautigam, City Manager DATE: November 1, 2007 Memo INITIATED BY: Stephen J. Smith, Law Director Gregory J. Dunn, Attorney Dana L. McDaniel, Deputy City Manager /Director of Economic Development RE: Ordinance 89 -07 -Amendment of Chapter 100 of the City of Dublin Codified Ordinances INTRODUCTION: The State of Ohio has passed into law Senate Bill 117 ( "SB 117 ") which substantially changes how cable television operators are licensed/franchised in the State of Ohio. The bill was signed by Governor Strickland on June 25, 2007 and became effective on September 24, 2007. For reference, the operative "cable franchise" issues in SB 117 are codified in the Ohio Revised Code as "new" section 1332.21 through 1332.34. Prior to requirements of SB 117, Ohio municipalities negotiated and issued cable franchise agreements with cable television providers in accordance with Section 621 of the Cable Communications Act as amended (47 U.S.0 541). Ironically, the Cable Act allows states, should they wish, to create regulatory schemes that essentially usurp the ability of a local municipality to regulate cable under Section 621. That is exactly what has now happened in Ohio and a number of other states. The telephone and cable industry, unable to make headway on a Cable Act rewrite in Congress, has now focused on having state laws rewritten to accommodate their interests. On its effective date, Senate Bill 117 effectively ended municipal franchising in Ohio and subjected municipalities and townships to a statewide licensing methodology. As such, the City's provisions regarding cable franchising need to be appropriately amended to account for the new Ohio Revised Code provisions. SENATE BILL 7 MODIFICATIONS: SB 117 adds Sections 1332.21 through 1332.34 to the Ohio Revised Code. In the future, cable franchising in Ohio will be referred to as "video service authorization" ( "VSA "). The Director of Commerce of the State of Ohio will ultimately handle all of the cable television licenses (i.e. franchises) in Ohio. VSA providers will make application with, be approved by and, where applicable, be governed by the Ohio Director of Commerce. The term of all new VSA's issued by the Director of Commerce will be ten (10) years. However, Senate Bill 117 phases in statewide control by doing the following: Memo to Council November 1, 2007 Page 2 of 3 Ordinance 89 -07 - Code Amendment re Video Service Providers 1. Existing franchises will be in effect until such time as the existing cable operator elects to abrogate the franchise. 2. All new providers and incumbents with expired franchises may immediately apply for a State- issued VSA. 3. An incumbent cable operator may only apply for and abrogate a franchise when the following occurs: • 120 days before an active franchise expires normally, or • after another person provides or sells video service in that area, or • after ten -day prior notice (required by SB 117) is issued to a municipal corporation (and every person providing video service therein) by another provider that such other provider intends to provide video service in that area, or • after a determination by the FCC that "effective competition" exists in accordance with the requirements of 47 C.F.R. 76.907. The statewide license obtained by cable operators and the phone company providing video service is subject to a variety of regulations by the State of Ohio. However, many of the existing municipally preferred current regulations are to be removed. An abbreviated summary of the changes is as follows: 1. Payments, grants or assistance for public access made by cable operators are prohibited. Current arrangements are grandfathered until January 1, 2012 or whenever the franchise would have expired normally, whichever comes first. 2. Franchise fees can continue to be collected by cities up to a maximum of 5% of gross revenues, but the definition of "gross revenue" is now limited to specific items in accordance with an SB 117 mandated definition. Only subscriber revenues and advertising revenues are included. Inclusion of late fees, home shopping fees, amounts of franchise fees, maintenance fees, and any other amounts are now specifically excluded. Additionally, franchise fee collection will now require an Ohio political subdivision to pass legislation (and notice the providers) that it elects to collect the allowed components of gross revenues and the actual percentage amounts. There is a specific timeline for this process that must be followed in order to effectuate franchise fee collection. It is believed that many jurisdictions will see franchise fee collections from current providers reduced annually by 15% to 33 %. 3. Political subdivisions will no longer be able to require build -out or anti - redlining plans in their community as they have in past cable franchises or local legislation. 4. Institutional networks may no longer be required by cities. Current arrangements existing under franchise will be grandfathered until January 1, 2012. Memo to Council - Ordinance 89 -07 - Code Amendment re Video Service Providers November 1, 2007 Page 3 of 3 5. Traditional franchise requirements to provide complimentary cable service to schools, government buildings and libraries will no longer be allowed in new VSA's. 6. The State of Ohio will have minimal customer service standards that will be enforced by the Director of Commerce. 7. Political subdivisions' cable television audits for improper /underpaid franchise fees amounts are now only able to look back two (2) years prior. Cities will be required to take providers to court to enforce franchise fee obligations. No audits can be conducted based upon a contingency compensation to the auditor. 8. Public, Educational and Government Access ( "PEG ") channels and programming will be limited to a new formula as dictated by SB 117. Maximum channels and tier assignment will be limited, but those communities that do not currently have a PEG channel may require that one be provided in accordance with SB 117 language. RECOMMENDATION: The Law Department recommends approval of Ordinance No. 89 -07 which effectively amends /repeals current Chapter 100 and adds in new provisions that are in compliance with the enacted Senate Bill 117.