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HomeMy WebLinkAboutOrdinances (O-94-941)-04/19/1994 ORDINANCE NO. 0-94-941 AN ORDINANCE OF THE CITY OF COLLEYVILLE, TEXAS, PRESCRIBING REGULATIONS TO REVIEW RATES CHARGED TO CABLE TELEVISION SUBSCRIBERS FOR THE BASIC SERVICE TIER; PROVIDING THAT THIS ORDINANCE IS CUMULATIVE; PROVIDING A SEVERABILITY CLAUSE; PROVIDING FOR PUBLICATION; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the Federal Communications Commission ("FCC") has issued rules pursuant to the Cable Television Consumer Protection and Competition Act, Pub. L. No. 102-385 (1992) ("1992 Cable Act"), implementing the regulation of cable television subscriber rates; and WHEREAS, these rules allocate the regulation of rates for the basic service tier and associated equipment rates to local franchising authorities and require local authorities to become certified and adopt their own regulations governing the process of rate regulation; and WHEREAS, the City of Colleyville, Texas franchises cable television service for the benefit of its citizens; and WHEREAS, the City has submitted its application for certification to the FCC and it is expedient to adopt the required regulations now, in order to implement regulations at the earliest possible date to obtain the most competitive rates for the City's cable ratepayers; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF COLLEYVILLE, TEXAS THAT: SECTION 1. DEFINITIONS In this ordinance: BASIC CABLE RATES means the monthly charges imposed by a cable operator for a subscription to the basic service tier and the associated equipment. BASIC SERVICE TIER means a separately available service tier to which subscription is required for access to any other tier of service, including as a minimum, but not limited to, all must-carry signals, all PEG channels, and all domestic television signals other than superstations, provided by the cable operator to any subscribers, except a signal of a television station which is secondarily transmitted by a satellite carrier beyond the local service area of such station, and any additional video programming signals as a service added to the basic tier by the cable operator. 1 BENCHMARK means a per channel rate of charge for cable service and associated equipment which the FCC has determined is reasonable. CABLE ACT OF 1992 means the Cable Television Consumer Protection and Competition Act of 1992. CABLE OPERATOR means any person or group of persons: (A) who provide cable service over a cable system and directly or through one or more affiliates owns a significant interest in such a cable system; or (B) who otherwise controls or is responsible for, through any arrangement, the management and operation of such a cable system. CABLE SERVICE means the one-way transmission to subscribers of video programming, or other programming service; and, subscriber interaction, if any, which is required for the selection of such video programming or other programming service. For the purposes of this definition, "video programming" is programming provided by, or generally considered comparable to programming provided by, a television broadcast station; and "other programming service" is information that a cable operator makes available to all subscribers generally. 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: (A) a facility that services only to retransmit the television signals of one or more television broadcast stations; (B) a facility that serves only subscribers in one or more multiple unit dwellings under common ownership, control or management, unless such facility or facilities uses any public right-of-way; (C) 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, as amended, except that such facility shall be considered a cable system to the extent such facility is used in the transmission of video programming directly to subscribers; or (D) any facilities of any electric utility used solely for operating its electric utility systems. CHANNEL means a unit of cable service identified and selected by a channel number or similar designation. 2 ~,.~----~_..__..,.__...,--"-~- I COST OF SERVICE SHOWING means a filing in which the cable operator attempts to show, in a manner consistent with FCC regulations, that the benchmark rate or the price cap is not sufficient to allow the cable operator to fully recover the costs of providing the basic service tier and to continue to attract capital. FCC means the Federal Communications Commission. INITIAL BASIC CABLE RATES means the rates that the cable operator is charging for the basic service tier, including charges for associated equipment, on the date the City notifies the cable operator of the City's qualification and intent to regulate basic cable rates. INITIAL DATE OF REGULATION means the date on which the City notifies the cable operator of the City's qualification and intent to regulate basic cable rates. INITIAL PERMITTED PER CHANNEL CHARGE means the permitted per channel charge on the initial date of regulation which shall be determined by the City Council to be lawful either under the benchmark analysis or through a cost- of-service showing. MAXIMUM MONTHLY CHARGE means the maximum amount per month which a cable operator may charge per subscriber for a tier of regulated programming services offered by a cable system and shall consist of a permitted per channel charge multiplied by the number of channels on the tier, plus a charge for franchise fees. MUST-CARRY SIGNAL means the signal of any local broadcast station (except superstations) which is required to be carried on the cable system and for which the local broadcast station has notified the cable operator of its election for must-carry rights. PEG CHANNEL means the channel capacity designated for public, educational, or governmental use required by the franchise of the cable system to be provided to subscribers, and facilities and equipment for the use of that channel capacity. PRICE CAP means the ceiling set by the FCC on future increases in basic cable rates regulated by the City, based on a formula using the GNP fixed weight price index, reflecting general increases in the cost of doing business and changes in overall inflation. REASONABLE RATE STANDARD means a per channel rate that is at or below the benchmark or price cap level. SUBSEQUENT PERMITTED PER CHANNEL CHARGE means the permitted charge per channel after the.initial date of regulation determined pursuant to a cost-of- service showing or the prior permitted per channel charge previously approved by the City Council, adjusted for inflation and external costs in accordance with the price cap analysis. 3 SUPERSTATION means any non-local broadcast signal secondarily transmitted by satellite. SECTION 2. REVIEW OF INITIAL BASIC CABLE RATES (a) Notice. Upon the adoption of this ordinance and the certification of the City by the FCC, the City shall immediately notify all cable operators in the City, by certified mail, return receipt requested, that the City intends to regulate subscriber rates charged for the basic service tier and associated equipment as authorized by the Cable Act of 1992. (b) Cable operator response. Within thirty (30) days of receiving notice from the City, a cable operator shall file with the City, its current rates for the basic service tier and associated equipment and any supporting material concerning the reasonableness of its rates, including FCC Form 393 or any other forms prescribed by the FCC to be used by cable operators to demonstrate the reasonableness of their rates. (c) Expedited determination and public hearing. (1) If the City Council is able to expeditiously determine that the initial basic rates appear to be within the FCC'S reasonable rate standard, as determined by the applicable benchmark analysis in 2 (g) below, the City Council shall: (A) hold a public hearing at which interested persons may express their views; and (B) after consideration of the views of interested persons, either (i) act to approve the rates within thirty (30) days from the date the cable operator filed its basic cable rates with the City, or (ii) act to extend the review period as provided in section 2 (d) below. (d) Extended review period. (1) If the City Council is unable to determine whether the initial basic cable rates are within the FCC's reasonable rate standard based on the material before it, or if the cable operator submits a cost-of-service showing, the City Council shall, within thirty (30) days from the date the cable operator filed its initial basic cable rates with the City and by adoption of a formal resolution, invoke the following additional periods of time, as applicable, to make a final determination: (A) ninety (90) days if the City Council needs more time to ensure that a rate is within the FCC's reasonable rate standard; or (B) one hundred fifty (150) days if the cable operator has submitted a cost-of-service showing seeking to justify a rate above the applicable benchmark. 4 . -...--"T , (2) If the City Council has not made a decision within the ninety (90) or one hundred fifty (150) day period, the City Council shall issue a brief written order at the end of the period directing the cable operator to keep accurate account of all amounts received by reason of the initial basic cable rates and on whose behalf the amounts are paid. (e) Public hearing. During the extended review period and before taking action on the initial basic cable rates, the City Council shall hold at least one public hearing at which interested persons may express their views and record objections. (f) Objections. An interested person who wishes to make an objection to the initial basic cable rates may request the City Secretary to record the objection during the public hearing or may submit the objection in writing any time before the decision resolution is adopted. In order for an objection to be made part of the record, the objector must provide the City Secretary with the objector's name and address. (g) Benchmark analysis. If a cable operator submits its initial basic cable rates schedule as being in compliance with the FCC's reasonable rate standard, the City Council shall review the rates using the benchmark analysis in accordance with the standard form authorized by the FCC. Based on the City Council's findings, the initial maximum monthly charge shall be established as follows: (1) The initial permitted per channel charge shall be determined as follows: (A) If the initial basic cable rates contain a per channel charge for regulated programming services and equipment in effect on the date of initial regulation equal to or below the benchmark per channel charge, as adjusted forward for inflation from September 30, 1992, to the date of initial regulation, then the permitted per channel charge shall be the per channel charge in effect on the date of initial regulation, adjusted for equipment. (B) If: (i) the initial basic cable rates contain a per channel charge for regulated programming services and equipment in effect on the date of initial regulation above the benchmark per channel charge, as adjusted forward for inflation from September 30,1992, until the initial date of regulation, and: (ii) the per channel charge for regulated programming services and equipment in effect on September 30, 1992, was above the benchmark per channel charge, then the initial permitted per channel charge is nine-tenths of the per channel charge in effect on September 30, 1992, but no lower than the benchmark per channel charge, additionally adjusted for inflation from September 30, 1992, to the initial date of regulation, for equipment, and for any changes in the number of channels. (C) If: (i) the initial basic cable rates contain a per channel charge for regulated programming services and equipment in effect on the date of initial regulation above the benchmark per channel charge, as adjusted forward for inflation from September 30, 1992, until the initial date of regulation, and: (ii) the per channel charge for 5 T-- regulated programming services and equipment in effect on September 3D, 1992, was below the benchmark per channel charge, then the initial permitted per channel charge is the benchmark rate per channel adjusted for inflation from September 30, 1992, to the initial date of regulation, for equipment, and for any changes in the number of channels offered on all regulated tiers. (2) The initial maximum monthly charge shall be determined by multiplying the initial permitted per channel charge times the number of channels on the basic service tier plus a charge for franchise fees. (h) Cost-of-service showings. If a cable operator does not wish to reduce the rates to the level permitted using the benchmark analysis, the cable operator shall have the opportunity to submit a cost-of-service showing in an attempt to justify a maximum monthly charge per subscriber above the FCC's reasonable rate standard. The City Council will review a cost-of-service submission pursuant to FCC standards for cost-of- service review. The City Council may approve initial basic cable rates above the benchmark if the cable operator makes the necessary showing; however, a cost-of-service determination resulting in rates below the benchmark or below the cable operator's September 30, 1992 rates minus ten percent (10%), will prescribe the cable operator's new rates. (i) Decision. (1) By formal resolution. After completion of its review of the cable operator's initial basic cable rates, the City Council shall adopt its decision by formal resolution. The decision shall include one of the following: (A) If the initial basic cable rates are within the FCC's reasonable rate standard or are justified by a cost-of-service analysis, the City Council shall approve the initial basic cable rates as the maximum monthly charge per subscriber; or (B) If the initial basic cable rates are not within the FCC's reasonable rate standard and the cost-of-service analysis, if any, does not justify such rates, the City Council shall establish the maximum monthly charge per subscriber that is within the FCC's reasonable rate standard or that is justified by a cost-of-service analysis. (2) Rollbacks and refunds. If the City Council determines that the initial basic cable rates as submitted exceed the reasonable rate standard or that the cable operator's cost-of-service showing justifies lower rates, the City Council may order the rates reduced in accordance with Paragraph (g) or (h) above, as applicable. In addition, the City Council may order the cable operator to pay to subscribers, refunds of the excessive portion of the rates with interest (computed at applicable rates published by the Internal Revenue Service for tax refunds and additional tax payments). The method for paying any refund and the interest rate will be in accordance with FCC regulations as directed in the City Council's decision resolution. 6 (3) Statement of reasons for decision and public notice. If initial basic cable rates of a cable operator are disapproved in whole or in part, or if there were objections made by other parties to the initial basic cable rates, the resolution must state the reason for the decision and the City Council must give public notice of its decision. Public notice will be given by advertisement once in the official newspaper of the City. 0) Appeal. The City Council's decision concerning rates for the basic service tier or associated equipment, may be appealed to the FCC in accordance with applicable federal regulations. SECTION 3. REVIEW OF REQUEST FOR INCREASE IN BASIC CABLE RATES (a) Notice. A cable operator in the City who wishes to increase the rates for the basic service tier or associated equipment shall file a request with the City and notify all subscribers at least thirty (30) days before the cable operator desires the increase to take effect. This notice may not be given more often than annually and not until at least one year after the determination of the initial maximum monthly charge per subscriber. (b) Expedited determination and public hearing. (1) If the City Council is able to expeditiously determine that the cable operator's rate increase request for basic cable service is within the FCC's reasonable rate standard, as determined by the applicable price cap, the City Council shall: (A) hold a public hearing at which interested persons may express their views; and (B) after consideration of the views of interested persons, either (i) act to approve the rates within thirty (30) days from the date the cable operator filed its basic cable rates with the City, or (ii) act to extend the review period as provided in section 3(c) below. (2) If the City Council takes no action within thirty (30) days from the date the cable operator filed its request with the City, the proposed rates will go into effect. (c) Extended review period. (1) If the City Council is unable to determine whether the rate increase is within the FCC's reasonable rate standard based on the material before it, or if the cable operator submits a cost-of-service showing, the City Council shall, by adoption of a formal resolution, invoke the following additional periods of time, as applicable, to make a final determination: 7 (A) ninety (90) days if the City Council needs more time to ensure that the requested increase is within the FCC's reasonable rate standard as determined by the applicable price cap; and (B) one hundred fifty (150) days if the cable operator has submitted a cost-of-service showing seeking to justify a rate increase above the applicable price cap. (2) The proposed rate increase is tolled during the extended review period. (3) If the City Council has not made a decision within the ninety (90) or one hundred fifty (150) days period, the City Council shall issue a brief written order at the end of the period requesting the cable operator to keep accurate account of all amounts received by reason of the proposed rate increase and on whose behalf the amounts are paid. (d) Public hearing. During the extended review period and before taking action on the requested rate increase, the City Council shall hold at least one public hearing at which interested persons may express their views and record objections. (e) Objections. An interested person who wishes to make an objection to the proposed rate increase may request the City Secretary record the objection during the public hearing or may submit the objection in writing any time before the decision resolution is adopted. In order for an objection to be made part of the record, the objector must provide the City Secretary with the objector's name and address. (f) Delay determination. If the City Council is unable to make a final determination concerning a requested rate increase within the extended time period, the cable operator may put the increase into effect, subject to subsequent refund if the City Council later issues a decision disapproving any portion of the increase. (g) Price cap analysis. If a cable operator presents its request for a rate increase as being in compliance with the FCC's price cap, the City Council shall review the rate using the price cap analysis in accordance with the standard form authorized by the FCC. Based on the City Council's finding, the basic cable rates shall be established as follows: (1) If the proposed basic cable rate increase is within the price cap established by the FCC, the proposed rates shall become the new maximum monthly charges. (2) If the proposed basic cable rate increase exceeds the price cap established by the FCC, the City Council shall disapprove the proposed rate increase and order an increase that is in compliance with the price cap. (h) Cost-of-service showings. If a cable operator submits a cost-of-service showing in an attempt to justify a rate increase above the price cap, the City Council will 8 . -..,. review the submission pursuant to the FCC standards for cost-of-service review. The City Council may approve a rate increase above the price cap if the cable operator makes the necessary showing; however, a cost-of-service determination resulting in a rate below the price cap or below the cable operator's then current rate will prescribe the cable operator's new rate. (i) Decision. The City Council's decision concerning the requested rate increase shall be adopted by formal resolution. If a rate increase proposed by a cable operator is disapproved in whole or in part, or if objections were made by other parties to the proposed rate increase, the resolution must state the reasons for the decision. Objections may be made at the public hearing by a person requesting the City Secretary to record the objection or may be submitted in writing any time before the decision resolution is adopted. U) Refunds. (1) The City Council may order refunds of subscribers' rate payments with interest if: (A) the City Council was unable to make a decision within the extended time period as described in Paragraph (c) above; and (B) the cable operator implemented the rate increase at the end of the extended review period; and (C) the City Council determines that the rate increase as submitted exceeds the applicable price cap or that the cable operator failed to justify the rate increase by a cost-of-service showing, and the City Council disapproves any portion of the rate increase. (2) the method for paying any refund and the interest rate will be in accordance with FCC regulations as directed in the City Council's decision resolution. (k) Appeal. The City Council's decision concerning rates for the basic service tier or associated equipment may be appealed to the FCC in accordance with applicable federal regulations. SECTION 4. CABLE OPERATOR INFORMATION (a) City may require. (1) In those cases where the cable operator has submitted initial rates or proposed an increase that exceeds the reasonable rate standard, the City Council may require the cable operator to produce information in addition to that submitted, including proprietary information, if needed to make a rate determination. In these cases, a cable 9 operator may request the information be kept confidential in accordance with this section. (2) In cases where initial proposed rates comply with the reasonable rate standard, the City Council may request additional information only in order to document that the cable operator's rates are in accord with the standard. (b) Request for confidentiality. (1) A cable operator submitting proprietary information to the City Council may request in writing that the information not be made routinely available for public inspection. A copy of the request shall be attached to and cover all of the information and all copies of the information to which it applies. Any such request shall be submitted to the office of the City Attorney to ensure compliance with Chapter 552, Government Code, V.T.C.A., the Open Records Act. (2) If feasible, the information to which the request applies shall be physically separated from any information to which the request does not apply. If this is not feasible, the portion of the information to which the request applies shall be identified. (3) Each request shall contain a statement of the reasons for withholding inspection and a statement of the facts upon which those reasons are based. (4) Casual requests which do not comply with the requirements of this subsection shall not be considered. (c) City Council action. Requests which comply with the requirements of Subsection (b), will be acted upon by the City Council. The City Council will grant the request if the cable operator presents by a preponderance of the evidence, a case for nondisclosure consistent with applicable federal regulations. If the request is granted, the ruling will be placed in a public file in lieu of the information withheld from public inspection. If the request does not present a case for nondisclosure and the City Council denies the request, the City Council shall take one of the following actions: (1) If the information has been submitted voluntarily without any direction from the City, the cable operator may request that the City return the information without considering it. Ordinarily, the City will comply with this request. Only in the unusual instance that the public interest so requires, will the information be made available for public inspection. (2) If the information was required to be submitted by the City Council, the I information will be made available for public inspection. (d) Appeal. If the City Council denies the request for confidentiality, the cable operator may seek review of that decision from the FCC within five (5) working days of the City Council's decision, and the release of the information will be stayed pending review. 10 I' SECTION 5. AUTOMATIC RATE ADJUSTMENTS (a) Annual inflation adjustment. In accordance with FCC regulations, the cable operator may adjust its capped base per channel rate for the basic service tier annually by the final GNP-PI index. (b) Other external costs. (1) The FCC regulations also allow the cable operator to increase its rate for the basic service tier automatically to reflect certain external cost factors to the extent that the increase in cost of those factors exceeds the GNP-PI. These factors include retransmission consent fees, programming costs, state and local taxes applicable to the provision of cable television service, and costs of franchise requirements. The total cost of an increase in a franchise fee may be automatically added to the base per channel rate, without regard to its relation to the GNP-PI. (2) For all categories of external costs other than retransmission consent and franchise fees, the starting date for measuring changes in external costs for which the basic service per channel rate may be adjusted will be the date on which the basic service tier becomes subject to regulations or February 28, 1994, whichever occurs first The permitted per channel charge may not be adjusted for costs of retransmission consent fees or changes in those fees incurred before October 6, 1994. (c) Notification and review. The cable operator shall notify the City at least thirty (30) days in advance of a rate increase based on automatic adjustment items. The City shall review the increase to determine whether the item or items qualify as automatic adjustments. If the City makes no objection within thirty (30) days of receiving notice of the increase, the increase may go into effect. SECTION 6. ENFORCEMENT (a) Refunds. The City may order the cable operator to refund to subscribers a portion of previously paid rates under the following circumstances: (1) A portion of the previously paid rates have been determined to be in excess of the permitted tier charge or above the actual cost of equipment; or (2) The cable operator has failed to comply with a valid rate order issued by the City. (b) Fines. If the cable operator fails to comply with a rate decision or refund order, the cable operator shall be subject to a fine of FIVE HUNDRED AND 00/100 DOLLARS ($500.00) for each day the cable operator fails to comply. 11 ..,~..~-~~_._- SECTION 7. EFFECTIVE DATE This ordinance shall become effective immediately upon passage and publication as required by law. AND IT IS SO ORDERED. The first reading and public hearing being conducted on the ----.11 t1rC ~ , 1994. The Aecond reading and public hearing being conducted on the pr/ J , 1994. The ird reading and public hearing being conducted on the I ,1994. ATTEST: CITY OF COLLEYVILLE Qur- ;J~' Jean Harris, CMC City Secretary aYJ/.z(J( Ed McKnight Mayor APPROVED AS TO FORM AND LEGALITY: 4Z7lk- Ross T. Foster City Attorney 12 /j--Jj day of 6~ /9rf day of day of