TITLE
Recommendation to authorize City Manager, or designee, to allocate Public, Education, and Government (PEG) fee revenue equally among the three categories of cable access providers, each receiving one-third of the total available; and
Increase appropriations in the General Services Fund Group in the Technology and Innovation Department by $902,120, offset by PEG fee revenue. (Citywide)
DISCUSSION
The enactment of the Digital Infrastructure and Video Competition Act of 2006 (DIVCA) marked a major change in the regulation of video service providers in California. Essentially, DIVCA replaced the local franchising process with a State process under the authority of the California Public Utilities Commission (CPUC). Changes in DIVCA included the creation of a PEG fee to be permitted under the Federal Communications Act, while at the same time eliminating the requirement that local cable company operators provide their own Cable Access facilities and support. DIVCA states that video franchises issued by the CPUC are for a ten-year term.
In September 2007, the City Council adopted an ordinance setting the City’s PEG fee at 1.04 percent of the cable providers’ gross revenue. Since the ten-year term of video franchises expired, a reauthorization to collect this PEG fee was required. On August 14, 2018, the City Council adopted an ordinance reauthorizing the City’s existing PEG fee for public, education, and government channel facilities, collected from State-issued video franchise holders operating in the City. Under the Federal Communications Act, the fee is required to be used to support PEG channel facilities and to create PEG channel content and is restricted to be used for spending on capital items only. The fees cannot be used for operational expenses such as staffing, or any other reoccurring costs. If PEG funding is used for any activity other than purchasing capital items for PEG channel facilities, the local cable/video providers may deduct that amoun...
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