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65-06 Ordinance RECORD OF ORDINANCES Dayton Legal Blank, Inc. Form No. 30043 Ordinance No. 65-06 Passed 20 AN ORDINANCE AMENDING THE DUBLIN CODIFIED ORDINANCES TO ADOPT CHAPTER 100 REGARDING THE REGULATION AND FRANCHISING OF CABLE TELEVISION SERVICE AND REGULATION OF COMPETITIVE VIDEO SERVICE (PROJECT LIGHTSPEED) WHEREAS, competitive video service is an important communications service desired by the citizens of the City of Dublin; WHEREAS, cable television service and competitive video service will provide the citizens of the City of Dublin with increased options for communications service; WHEREAS, the Telecommunications Act of 1996, as amended, authorizes, and requires that the City of Dublin regulate the operation of cable television service; and WHEREAS, it is important that the City of Dublin utilize its regulatory authority to achieve the best possible communications services for the citizens of the City of Dublin at reasonable and competitive rates. NOW, THEREFORE, BE IT ORDAINED by the Council of the City of Dublin, State of Ohio, ~ of the elected members concurring that: Section 1. The following Chapter 100 "Cable Service and Competitive Video Service Ordinance" of the Dublin Codified Ordinances is hereby adopted: CHAPTER 100 CABLE SERVICE AND COMPETITIVE VIDEO SERVICE 100.01 Title 100.09 Scope 100.02 Definitions 100.10 Public, Education, and Governmental 100.03 Grant of Authority Access 100.04 Existing Cable Operators 100.11 Service to Schools and Public Franchise Agreement Option Buildings 100.05 Fees For Operation of Cable 100.12 Indemnification Service and Competitive Video 100.13 Insurance and Bonding Service 1.00.1.4 Assignment 100.06 Right-of--Way Provisions 100.99 Penalty 100.07 Permits To Operate Systems in the City 100.08 Service Rates to Subscribers 100.01 TITLE This Chapter shall be known and may be cited as the Cable Service and Competitive Video Service Chapter. 100.02 DEFINITIONS ! (a) Affiliate means any person that directly or indirectly owns or controls the Provider, any person that a Provider directly or indirectly owns or j controls, or any person under common ownership or control with a Provider. (b) Cable Operator means any person or group of persons who has executed a Franchise Agreement and (1) who provides Cable Service over a Cable System and directly or through one or more affiliates owns a significant interest in such Cable System, or (2) who otherwise controls or is responsible for, through any arrangement, the management and operation of such a Cable System. RECORD OF ORDINANCES Dayton Legal Blank, Inc. Form No. 30043 Ordinance No. 65-06 Passed Page 2 20 (c) Cable Service means (a) the one-way transmission to subscribers of (i) video programming, or (ii) other programming service, and (b) subscriber interaction, if any, which is required for the selection or use of such video programming or other programming service. (d) Cable System means a facility, consisting of a set of closed transmission paths and associated signal generation, reception, and control equipment that is designed to provide Cable Service which includes video programming and which is provided to multiple subscribers within a community, but such term does not include (i) a facility that serves only to retransmit the television signals of 1 or more television broadcast stations; (ii) a facility that serves subscribers without using any public right-of--way; (iii) a facility of a common carrier which is subject, in whole or in part, to the provisions of Title II of the Communications Act of 1934, except that such facility shall be considered a Cable System [other than for purposes of 42 U.S.C. § 541 (c)] to the extent such facility is used in the transmission of video programming directly to subscribers, unless the extent of such use is solely to provide interactive on-demand services; (iv) an open video system that complies with 42 U.S.C. § 573; (v) any facilities of any electric utility used solely for operating its electric utility system, or (vi) the facilities of a Competitive Video Service Provider under Chapter 100. (e) The City means the City of Dublin, Ohio. (f) Competitive Video Service means video program provided by a Competitive Video Service Provider and provided through wireline facilities located at least in part in the public rights of way without regard to delivering technology, including Internet protocol technology. This definition does not include video programming provided by a commercial mobile service provider defined in 47 U.S.C. § 332(d). (g) Competitive Video Service Agreement means the agreement executed by the City and a Competitive Video Service Provider pursuant to Chapter 100 of the Dublin Codified Ordinances. (h) Competitive Video Service Provider means an entity providing video services that has not executed a Franchise Agreement with the City as of the effective date of this ordinance and is not a Cable Operator, or an affiliate, successor, or assignee of such Cable Operator. (i) Council means the elected City Council for the City of Dublin, Ohio. (j) Franchise means an initial authorization, or renewal thereof (including a renewal of an authorization which has been granted subject to section 47 USC § 546), issued by the Franchising Authority, whether such authorization is designated as a franchise, permit, license, resolution, contract, certificate, agreement, or otherwise, which authorizes the construction or operation of a Cable System by a Cable Operator in the City of Dublin. (k) Franchise Agreement means the agreement executed by the Franchising Authority and a Cable Operator pursuant to Chapter 100 of the Dublin Codified Ordinances. (1) Franchising Authority means the City of Dublin, Ohio. RECORD OF ORDINANCES Dayton Legal Blank, Inc. Fotm No. 30043 Ordinance No. 65-06 Passed Page 3 20 (m) Gross Revenues means all consideration of any kind or nature, including without limitation, cash, credits, property, and in-kind contributions (services or goods) received by the Provider from the provision of Service within the franchise area. (1) Included Items: Subject to paragraph (2), the term "Gross Revenues" shall include the following: A. All charges and fees paid by subscribers for the provision of Service, including fees attributable to Service when sold individually or as part of a package or bundle, or functionally integrated, with services other than the Service; and B. All revenue derived from the Provider's Service pursuant to compensation arrangements for advertising attributable to the local Service area. (2) For the purposes of this section, the term "gross revenues" shall not include the following: A. Any revenue not actually received, even if billed, such as bad debt net of any recoveries of bad debt; B. Refunds, rebates, credits or discounts to subscribers or a municipality to the extent not already offset by clause (i) and to the extend such refund, rebate, credit, or discount is attributable to the Service; C. Any revenues received by the Provider or its Affiliates from the provision of services or capabilities other than the Service, including telecommunications services, information services, and services, capabilities, and applications that may be sold as part of a package or bundle, or functionally integrated, with the Service; D. Any revenues received by the Provider or its affiliates for the provision of directory or Internet advertising, including yellow pages, white pages, banner advertisement, and electronic publishing; E. Any requirements or charges for managing the public rights-of--way with respect to a Franchise or Competitive Video Agreement under this section, including payments for bonds, security funds, letters of credit, insurance, indemnification, penalties, or liquidated damages; F. Any amounts attributable to the provision of Service to customers at no charge, including the provision or such Service to the public institutions without charge; G. Any tax, fee, or assessment of general applicability imposed on the customer or the transaction by a Federal, State, or local government or any other governmental entity, collected by the provider, and required to be remitted to the taxing entity, including sales and use taxes and utility user taxes; RECORD OF ORDINANCES Dayton Legal Blank, Inc. Form No. 30043 Ordinance No. 65-06 Passed Page 4 20 H. Any forgone revenue from the provision of Service at no charge to any person; I. Sales of capital assets or surplus equipment; J. Reimbursement by programmers of marketing costs actually incurred by the Provider operator for the introduction of new programming; and K. The sale of Services for resale to the extent the purchaser certifies in writing that it will resell the Service and pay a Provider fee with respect hereto. (n) Person means an individual, partnership, association, joint stock company, trust, corporation or governmental entity. (o) Provider means either a Cable Operator or a Competitive Video Service Provider. (p) Service means either a Cable Service or Competitive Video Service. 100.03 GRANT OF AUTHORITY (a) In accordance with and subject to Chapter 98 of the Dublin Codified Ordinances and upon executing a Franchise Agreement, a Cable Operator is authorized to occupy or use the public right of ways within the geographical boundaries of the City to construct, operate, maintain, repair, and upgrade existing facilities and install new facilities for the purpose of operating a Cable System within the boundaries of the City. The Cable Operator may enter private property only as permitted by the owner of such private property for the purpose of constructing, operating, maintaining, repairing, and upgrading facilities. (b) In accordance with and subject to Chapter 98 of the Dublin Codified Ordinances and upon executing a Competitive Video Service Agreement, a Competitive Video Service Provider is authorized to occupy or use the public right of ways within the geographical boundaries of the City to construct, operate, maintain, repair, and upgrade existing facilities and install new facilities for the purpose of providing Competitive Video Service within the geographical boundaries of the City. Additionally, the Competitive Video Service Provider may enter private property only as permitted by the owner of such private property for the purpose of constructing, operating, maintaining, repairing, and upgrading facilities. (c) A Provider must comply with state and federal law, if applicable, and agree in its respective Franchise Agreement or Competitive Video Service Agreement to comply with the requirements set forth. in Chapter 100. 100.04 EXISTING CABLE OPERATORS FRANCHISE AGREEMENT OPTION Any incumbent Cable Operator providing Cable Service in the City on the effective date of this Ordinance may immediately opt out of its existing Franchise Agreement with the City and enter into a Franchise Agreement under this Chapter. 100.05 FEES FOR OPERATION OF CABLE SERVICE AND COMPETITIVE VIDEO SERVICE RECORD OF ORDINANCES Dayton Legal Blank, Inc. Form No. 30043 Ordinance No. 65-06 Passed Page 5 20 (a) As compensation for rights granted under Chapter 100, Cable Operators shall pay to the City a franchise fee of 5% of the Cable Operator's Gross Revenues. (b) As compensation for rights granted under Chapter 100, Competitive Video Service Providers shall pay to the City a fee of 5% of the Competitive Video Service Provider's Gross Revenues. (c) Consistent with Ohio Revised Code 4939.05(B)(4), any franchise fees, free service, or other non-monetary compensation provided by a Cable Operator or Competitive Video Service Provider under this Chapter will be credited, offset, or deducted from any public way fee or like charge assessed in Chapter 98 of the City of Dublin Codified Ordinances. (d) The City shall have the right to audit and to re-compute any amounts determined to be payable in satisfaction of the fees set forth in this Section. Any such audit shall be upon reasonable written notice to the Provider and there shall not be more than one audit per year and only one audit with respect to any given period of time. Any additional amount due the City as a result of the audit shall be paid by Provider within 30 days after the Provider receives a written notice from the City. The notice which the City sends to Provider shall include a copy of the audit report. Provider shall pay the cost of the audit if the City determines that the annual payment to the City for the preceding year is thereby increased by more than five percent (5%). (e) In the event that payment of any fee set forth in this Section, which has been recomputed pursuant to Section (d) above is not made on or before the expiration of thirty (30) days following written notice by the City, Provider shall be charged and shall pay, in addition to the amount due, interest on the amount due equal to the prevailing prime rate plus two hundred (200) basis points of interest compounded daily from the due date for payment of the recomputed amount. The prevailing prime rate shall be the prime rate of Huntington Bank in Columbus, Ohio. 1.00.06 RIGHT-OF-WAY PROVISIONS Cable Operators operating Cable Systems and Competitive Video Service Providers providing Competitive Video Service in the City shall abide by all right of way provisions as set forth in this Chapter and in Chapter 98 of the City of Dublin Codified Ordinances. 100.07 PERMITS TO OPERATE SYSTEMS IN THE CITY (a) No person shall offer to subscribers a Cable Service or Competitive Video Service within the City except pursuant to this Chapter of the City of Dublin Codified Ordinances. A Cable Operator, however, not electing under Section 100.04 to enter into a Franchise Agreement under Chapter 100 may continue to provide Cable Service under its existing agreement. (b) All Franchise Agreements and Competitive Video Service Agreements granted by ordinance pursuant to this Chapter shall be nonexclusive. Council reserves the right to issue as many such agreements as it deems advisable in the public interest. (c) The Franchise Agreements or Competitive Video Service Agreements shall take effect and will be in force from and after the earliest period RECORD OF ORDINANCES Dayton Legal Blank, Inc. Form No. 30043 Ordinance No. 65-06 Passed Page 6 20 allowed by law, and upon the filing by the Provider with the City Administrator of its acceptance, in writing, of each and all of the terms and provisions of the Franchise Agreement or Competitive Video Service Agreement; provided, however, if the Provider shall fail to file such written acceptance within thirty days after the passage of the ordinance by Council, then the ordinance granting the Franchise Agreement or Competitive Video Agreement shall be null and void. (d) If any section, subsection, sentence, clause, phrase or portion of this Chapter is for any reason held invalid or unconstitutional by any court of competent jurisdiction, or in conflict with rules and regulations of the Federal Communications Commission, then such portion shall be deemed a separate, distinct and independent provision of this chapter, and such holding shall not effect the validity of the remaining portions thereof. (e) Any Franchise Agreements or Competitive Video Service Agreements executed pursuant to this chapter may be revoked, after a full due process hearing, by a simple majority vote of Council upon the recommendation of the City Administrator, for violation of material provisions of this chapter, after giving the Provider ninety days notice in ~ writing of intention to revoke such permit, unless such violation is ~ corrected during the period of notice, or unless the Provider has made a reasonable attempt to correct the violation during that time. (f) The term of each Franchise Agreement and Competitive Video Service Agreement shall be determined by Council and set forth in such Agreement, the effective date to be pursuant to subsection (c) above. (g) All renewals shall be in accordance with federal law, if applicable. I 100.08 SERVICE RATES TO SUBSCRIBERS (a) Providers may set their own service rates and conditions of service. (b) An up-to-date copy of all the Provider's rates, rules, regulations and policies having to do with subscriber service must be made available to customer, or on the Provider's web site, and provided to the City Administrator upon request. 100.09 SCOPE (a) This is an enabling ordinance authorizing the use of the City's right of way for the provision of Cable Service and Competitive Video Service in the City, but it does not take the place of any license or permit that may be additionally required by law of the Provider, either currently or at some later date. (b) It shall be the responsibility of the Provider to obtain any and all such licenses or permits necessary to the operation and conduct of its business activities. (c) Failure of the Provider to obtain and conform to the material provisions of any and all such franchises, licenses, or permits, and to make prescribed payments if required as a condition of their issuance, shall be 'I~~ considered a violation of this chapter, and subject the Provider to the penalties set forth in Section 100.10. RECORD OF ORDINANCES Dayton Legal Blank, Inc. Form No. 30043 Ordinance No. 65-06 Passed Page ~ 20 100.10 PUBLIC, EDUCATION, AND GOVERNMENTAL ACCESS (a) A Provider shall designate a sufficient amount of capacity on its f network to allow the provision of a comparable number of public, educational, and governmental (PEG) channels or hours of programming, at the City's discretion, that have been activated and provided as of the effective date of this Ordinance, provided such programming is submitted in a manner and form that is capable of being accepted and transmitted by the Provider and compatible with the Provider's technology. (b) Any programming made available under this section shall be solely for noncommercial governmental and educational purposes and the content shall be the sole responsibility of the City. (c) Providers shall cooperate with the City to develop an appropriate notification over the Cable Service or Competitive Video Service in the event of a public safety emergency or in the alternative, providers shall comply with the EAS requirements of the FCC and such other public safety or emergency requirements as may be set forth in the applicable Agreement. 100.11 SERVICE TO SCHOOLS AND PUBLIC BUILDINGS (a) Providers offering service in the City collectively must offer one free installation and free monthly basic Service to one outlet at each public I ~ and parochial school, City government building, fire station, police ~ i station, and library buildings. However, any new public and parochial school, City government building, fire station, police station, and library buildings, built after the effective date of this Chapter, not within 150 feet of the nearest usable trunk, shall not be required to be served. Each such Provider shall have the responsibility to offer a free installation and free monthly basic Service to a share of such schools, governmental, or library buildings. Each such Provider's share shall be proportionate to the total number of such Providers, unless other negotiated compensation has been provided to the City. (b) Such Providers shall meet as necessary and determine who will provide Service to which school or public building under Section 100.12(a). If Providers are unable to reach agreement as to who will provide free Service to which school, governmental, or library building, the City Manager will confer with the Providers and determine the assignments in a reasonable manner. This obligation will apply to a new Provider of Service once that Provider's Service is available on the section of its system that passes the school or public building assigned to that Provider. Until such time, the incumbent Provider of Service to that location will provide Service to such school or public building. The City Manager may delegate these duties to another city official. 100.12 INDEMNIFICATION The Provider shall indemnify and save harmless the City and all contractors, h r f fr m 11 laims demands causes of officers, employees and representatives t o eo o a c , action, copyright action, liability, judgments, costs and expenses or losses for injury or death to persons or damage to property owned by, and Worker's Compensation claims against any parties indemnified herein, arising out of, caused by, or as a result of the Provider's construction, lines, cable, erection, maintenance, use or presence of, or RECORD OF ORDINANCES Dayton Legal Blank, Inc. Form No. 30043 Ordinance No. 65-06 Passed Page g , 20 removal of any poles, wires, conduit, appurtenances thereto, or equipment or attachments thereto. The Provider, however, shall not indemnify (1) the City for any liabilities, damages, cost and expense resulting from the willful misconduct or negligence of the City, its officers, employees and agents or (2) third parties for any activity or function conducted in connection with any access channel or any emergency messages under Section 100.11(c). 100.13 INSURANCE AND BONDING Providers shall comply with all the insurance and bonding requirements of Chapter 98 of the City of Dublin Codified Ordinances. 100.14 ASSIGNMENT A Provider may not assign or transfer its Franchise Agreement or Competitive Video Service Agreement or any interest therein, without the prior consent of City, which consent shall not be unreasonable withheld; except that the Provider may assign or transfer its agreement or any interest therein to its affiliate upon written notice and without prior consent of the City. 100.99 PENALTY In addition to the provisions of Section 100.07(e), having to do with revocation of permits, whoever violates any provision of this chapter shall be deemed guilty of a misdemeanor of the fourth degree; any such violation shall constitute a separate offense of each successive day continued. Section 2: This ordinance shall take effect and be in force on the earliest date permitted by law. Passed this the ~ day of ~(1~ Z?, 2006. I , is Mayor -Presiding Officer ATTEST: Clerk of Council I hereby certify that copies of this Ordinance/Resolution were posted in the City of Dublin in accordance with Section 731.25 of the Ohio Revised Code. U~J D ty Clerk of Council, Dublin, Ohio MEMORANDUM TO: Dublin City Council Jane S. Brautigam, City Manager FROM: Stephen J. Smith, Law Director Gregory J. Dunn RE: Ordinance #65-06 Adopting Chapter 100 Regarding the Regulation and Franchising of Cable Television Service and Regulation of Competitive Video Service (Project Lightspeed) DATE: October 11, 2006 AT&T and the City of Dublin have completed negotiations that will permit AT&T to deploy and operate a fiber optic based broadband communication system in the City of Dublin. This system would provide broadband services, phone and video by using internet protocol ("IP") technology and is referred to as "Project Lightspeed". In the event that Ordinance 65-06 passes and a subsequent resolution authorizing AT&T to serve Dublin is approved by City Council, AT&T would begin deploying these technologically advanced services in Dublin by the first quarter of 2007. This deployment would provide Dublin with another alternative source of broadband services. It is anticipated that competition will occur between the incumbent video and broadband providers, Time Warner and Wide Open West (WOW) and AT&T. This competition will include possible price reductions, better customer service and new services. AT&T's proposed method of deploying Project Lightspeed will utilize, to some extent, existing phone lines so that disruptions to yards and aesthetic problems should be kept to a minimum. The legal device by which we will allow additional competition is the creation of a new Cable Television and Video Competition Ordinance for the City of Dublin that will give providers of video services the option of choosing to be regulated as a cable television company or as a video services provider using internet protocol. Either way a provider chooses to be regulated, the regulations will be the same. Therefore, the important franchise issues such as franchise fees, service to the schools and other issues are contained in the Ordinance. Ultimately, we will give Time Warner and WOW the option of choosing to opt in to this regulatory scheme. Should they decline, they could continue to be regulated pursuant to their existing franchises. This competitive video ordinance was crafted to create a level playing field between cable operators, such as Time Warner, and competitive video providers, such as AT&T. Although we cannot guarantee that the cable operators will not take some sort of action against this, and similar ordinances around the country, every consideration has been made to make this legislation competitively neutral to the maximum extent possible from a municipal perspective. In this case, it is the Law Department's position that the significant benefits of competition outweigh the small risk of litigation. We recognize that this memorandum was necessarily technical in nature, and we will be available to answer any questions.