TITLE
Recommendation to request City Attorney to prepare an ordinance, pursuant to the State of California’s Digital Infrastructure and Video Competition Act of 2006, establishing a State video franchise fee, a fee to support Public, Educational and Government (PEG) channel facilities, and a schedule of penalties for any material breach of customer service standards for any State video franchise holder operating within the boundaries of the City of Long Beach. (Citywide)
DISCUSSION
Historically, the granting of cable franchise agreements has been the exclusive lawful domain of local governments. The City of Long Beach (City) exercised this authority when it renewed its current agreement with Charter Communications on May 23, 1997.
The agreement provides the City numerous benefits, including eight PEG channels that are respectively used by the general public, Long Beach City College, California State University at Long Beach, Long Beach Unified School District, and the City.
On August 31, 2006 the California Legislature approved AB 2987, the Digital Infrastructure and Video Competition Act of 2006 (DIVCA). The enactment of DIVCA marked a major change in the regulation of video service (cable) providers in California, establishing a State franchise system, under the authority of the State's Public Utilities Commission, while preserving local franchise revenues. The bill requires that State franchise applicants comply with numerous regulations including City regulations and fees regarding the time, place, and manner of using the public rights-of-way.
DIVCA requires that cable operators pay local government franchise fees of up to five percent of gross revenues from video service. Currently, the City receives five percent of cable companies' gross revenues in Long Beach. The proposed ordinance would contain a franchise fee to ensure Long Beach maintains the percentage of gross revenue it currently receives.
DIVCA allows local entities to establish a fee by ordi...
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