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Item 15 - Resolution Authorizing Submission of Certification Application to FCC AGENDA REPORT SUMMARY ~ .... ,-~ REPLACEMENT ..:r0: Honorable Mayor and Members of the City Council FROM: James L. Bowersox, City Man~ INITIATED BY: Robert L. Thomas, Director of Community servi~ Patrick R. Foley, Principal Management Analyst DATE: June 15, 1993 SUBJECT: A Resolution Authorizing the Submission of a Certification Application to the Federal Communications Commission Adopting Regulations that are Consistent with the Federal Communications Commission's Basic Service Rate Rules and Regulations; and Establishing Certain Procedural Laws and Regulations which Provide a Reasonable Opportunity for Consideration of the Views of Interested Parties in Rate Regulation Proceedings Taken Hereunder ABSTRACT The Cable Television Consumer Protection and Competition Act of 1992 has become law. Under the provisions of this law, the City of Poway may obtain certification from the Federal Communications Commission (FCC) to regulate basic cable service rates. Under the terms of the 1992 Cable Act, effective competition does not exist in Poway. Staff -is recommending that the City Council adopt the attached resolution. ENVIRONMENTAL REVIEW This action is not subject to CEQA review. FISCAL IMPACT The City receives over $250,000 annually in franchise fees from the cable operators. An allocation of $50,000 will be included in the FY 1993-94 budget for the purpose of hiring consultants to assist staff in the regulation and enforcement of cable rates. ADDITIONAL PUBLIC NOTIFICATION AND CORRESPONDENCE Additional notification sent to Robert McRann, Cox Cable; Ann Burr, Southwestern Cable TV; and William Marticorena, Rutan & Tucker. RECOMMENDATION It is recommended that the City Council adopt the attached Resolution Authorizing the Submission of a Certification Application to the Federal Communications Commission, Adopting Regulations that are Consistent with the Federal Communications Commission's Basic Service Rate Rules and Regulations; and Establishing Certain Procedural Laws and Regulations which provide a Reasonable Opportunity for Consideration of the View of _Interested Parties in Rate Regulation Proceedings taken hereunder. ACTION 1 of 7 i' '~'J 1 c 19cn ITEM ' . ~;' J: ....) .~'" .. AGENDA REPORT CITY OF POW A Y This report is included on the Consent Calendar, There will be no separate discussion of the report prior to approval by the City Council unless members of the Council, staff or public request it to be removed from the Consent Calendar and discussed separately. If you wish to have this report pulled for discussion, please fill out a slip indicating the report number and give it to the City Clerk prior to the beginning of the City Council meeting. R E V I S E D TO: Honorable Mayor and Members of the City Council FROM: James L. Bowersox, City Manager INITIATED BY: Robert L. Thomas, Director of Community servic~ Patrick R. Foley, Principal Management Analyst DATE: June 15, 1993 SUBJECT: A Resolution Authorizing the Submission of a Certification Application to the Federal Communications Commission Adopting Regulations that are Consistent with the Federal Communications Commission's Basic Service Rate Rules and Regulations; and Establishing Certain Procedural Laws and Regulations which Provide a Reasonable Opportunity for Consideration of the Views of Interested Parties in Rate Regulation Proceedings taken Hereunder BACKGROUND The Cable Television Protection and Competition Act of 1992 has become law. This new legislation restores to local governments significant authority to control cable rates and enforce customer service standards. FINDINGS On May 3, 1993, the Federal Communications Commission (FCC) released Report and Order in MM docket No. 92-266, containing the rate regulations for cable service and leased access. The provisions become effective June 21, 1993. Under the terms and conditions of the Cable Act, effective competition does not exist in the City of Poway. Staff is requesting authorization to obtain certification from the FCC for the City to regulate basic cable service rates in Poway. Cable rates remain deregulated until certification. The cable rates will become fixed 30 days after the City becomes certified by the FCC. The FCC will regulate cable rates only if the franchise authority does not have franchise fees to cover the cost of regulation. To receive certification from the FCC it is necessary for the City to adopt and administer regulations pertaining to basic cable service that are consistent with the regulations adopted by the FCC pursuant to 47 U.S.C. ss 543(b). ACTION: I 2 of 7 JUN 1 5 1993 rrEM 13 - Agenda Report 1992 Cable Television Act June 15, 1993 -- Page 2 The City's rules and regulations pertaining to rate regulation proceedings provide a reasonable opportunity for consideration of the views of interested parties. All interested parties will be given the opportunity to provide their input to the City Council. Under the current cable franchise agreements with Cox Cable and Southwestern Cable, the City of Poway has the legal authority to adopt cable rates in compliance with the Cable Television Consumer Protection and Competition Act of 1992, and to have staff administer the rates. ENVIRONMENTAL REVIEW This action is not subject to CEQA review. FISCAL IMPACT The City receives over $250,000 annually in franchise fees from the cable operators. An allocation of $50,000 will be included in the FY 1993-94 budget for the purpose of hiring consultants to assist staff in the regulation and enforcement of cable rates. ADDITIONAL PUBLIC NOTIFICATION AND CORRESPONDENCE Additional notification sent to Robert McRann, President and General Manager, Cox Cable; Ann Burr, President, Southwestern Cable TV; and William Marticorena, Rutan & Tucker. RECOMMENDATION It is recommended that the City Council adopt the attached Resolution Authorizing the Submission of a Certification Application to the Federal Communications Commission, Adopting Regulations that are Consistent with the Federal Communications Commission's Basic Service Rate Rules and Regulations; and Establishing Certain Procedural Laws and Regulations which provide a Reasonable Opportunity for Consideration of the View of Interested Parties in Rate Regulation Proceedings taken hereunder. JLB:RLT:PRF:sf (c:\wpwin\agenda\cablrate.fcc) - 3 of 7 JUN 1 5 1993 ITEM 13 RESOLUTION NO. 93- A RESOLUTION OF THE CITY OF POWAY, CALIFORNIA AUTHORIZING THE SUBMISSION OF A CERTIFICATION APPLICATION TO THE FEDERAL COMMUNICATIONS COMMISSION, ADOPTING REGULATIONS THAT ARE CONSISTENT WITH THE FEDERAL COMMUNICATIONS COMMISSION'S BASIC SERVICE RATE RULES AND REGULATIONS; AND ESTABLISHING CERTAIN PROCEDURAL LAWS AND REGULATIONS WHICH PROVIDE A REASONABLE OPPORTUNITY FOR CONSIDERATION OF THE VIEW OF INTERESTED PARTIES IN RATE REGULATION PROCEEDINGS TAKEN HEREUNDER WHEREAS, the Cable Television Consumer Protection and Competition Act of 1992 (the 1992 Cable Act) provides, in relevant part, that franchising authorities can regulate the rates for Basic Cable Service, as defined in the 1992 Cable Act, in accordance with Basic Service Rate regulations prescribed by the Federal Communications Commission (the "Commission") upon certification by the Commission; and WHEREAS, the Commission has adopted final rules and re9ulations implementing Section 623 of the 1992 Cable Act in the Report and Order and Further Notice of Proposed Rulemaking, MM Docket 92-2266, Released May 3, 1993, effective June 21, 1993; and WHEREAS, a franchising authority seeking jurisdiction to re9ulate Basic Service Rates, as defined in the 1992 Cable Act, must obtain authorization from the Commission to so regulate; and WHEREAS, to receive such approval, the franchising authority must file a written certification with the Commission certifying that: 1. The franchising authority will adopt and administer regulations with respect to the rates subject to regulation under Section 623 of the 1992 Cable Act that are consistent with the regulations prescribed by the Commission thereunder; and 2. The franchising authority has the legal authority to adopt, and the personnel to administer, such regulations; and 3. Procedural laws and regulations applicable to rate regulation proceedings have been adopted, or will be adopted, by such franchising authorities which provide a reasonable opportunity for consideration of the views of interested parties; and WHEREAS, the City of Poway as the governing body, hereby desires to authorize the City Manager or his designee, to file on its behalf all necessary forms, documents, and otherwise with the Commission which are necessary and proper to allow it to regulate Basic Service Rates, as defined in the 1992 Cable Act; and WHEREAS, the City of Poway now desires to adopt regulations with respect to the regulation of Basic Service Rates which are consistent with the regulations prescribed by the Commission and to adopt procedural laws and regulations applicable to rate regulation proceedings which provide a reasonable opportunity for consideration of the views of interested parties. JUN 1 5 1993 ITEM 13 4 nf 7 - - Resolution , 93- Page 2 ,- NOW, THEREFORE, BE IT RESOLVED, that the City of Poway does hereby resolve as follows: Sect ion 1. Under the laws of the United States, the Constitution and Statues of the State of California, and the ordinances, agreements, and procedures of the City of Poway, the City of Poway possesses the legal authority to adopt the regulations contained herein, Section 2. The City of Poway possesses sufficient personnel to administer the regulations adopted herein, Section 3. The City of Poway has no actual knowledge that the cable system, or cable systems, operating in its jurisdiction are subject to Effective Competition and thus, based upon the presumption of established in Section 76.609 of the Code of Federal Regulations, (CFR) the cable operator, or cable operators, operating within its jurisdiction are not subject to Effective Competition. Section 4. The City Manager or his designee, are hereby authorized, empowered, and instructed to file necessary and proper forms, certifications, documents, and otherwise as prescribed in CRF ss 76.610 Commission by (1) registered mail, return receipt requested; or (2) hand delivery to the commission and a date stamp copy obtained. A copy of the certification form described herein shall be served on the cable operator, or cable operators, on or before the date said certification form is filed with the Commission. Section 5. Upon certification by the Commission, the City Manager shall give, by registered mail, return receipt requested or hand delivery, written notification to the cable operator, or cable operators, that the City of Poway has been so certified to so regulate Basic Service Rates and the cable operator, or cable operators, shall thereby be directed, pursuant to CRF ss 76.930 to file a schedule of rates for the Basic Service Tier and associated equipment with the City of Poway within thirty (30) days as provided in CRF ss 96,930. Section 6. Upon receipt of the schedule of rates for the Basic Service Tier and associated equipment as provided in Section 5 above from the cable operator, or cable operators, such .schedule of rates and charges shall be referred to staff for review and evaluation pursuant to the substantive and procedural standards set forth in CRF ss ss 76.900-76.985 and the Report and Order and Further Notice of Proposed Rulemaking in MM Docket 92-266. Section 7. After a cable operator, or cable operators, have submitted for review its existing rates for the 8asic Service Tier and associated equipment costs, or proposed changes in these rates (including increases in the base line channel charge that results from reductions in the number of channels in a tier), the existing rates will remain in effect or the proposed rates will become effective after thirty (30) days from the date of submission; provided, however, that the City may hold this thirty (30) day deadline for an additional time by issuing a brief written order as provided - in CRF ss 76.933(b) or within thirty (30) days of the date of submission explaining that it needs additional time to review the rates. JUN 1 5 1993 ITEM 13 ~ ".;: 7 Resol. on No. 93- Page 3 Section 8. If the City of Poway is unable to determine, based upon the material submitted by the cable operator, that the existing or proposed rates are within the Commission's permitted basic service tier charge or actual cost-of-equipment as defined in CRF ss ss 76.922 and 76.923, or if a cable operator has submitted a cost of service showing pursuant to ss ss 76,937(c) and 76.924, seeking to justify a rate above the Commission's Basic Service Tier charge is defined in CRF ss ss 76.922 and 76.923, the City of Poway may toll the thirty (30) day deadline in Section 7 to request and/or consider additional information to consider the comments from interested parties as follows: a. For an additional ninety (90) days in cases not involving cost-of- service showings; or b. For an additional one hundred fifty (150) days in cases involving cost-of-service showings. Section 9. If the City of Poway has availed itself of the additional ninety (90) or one hundred fifty (150) days permitted above, and has taken no action within these additional time periods, then the proposed rates will go into effect at the end of the ninety (90) or one hundred fifty (150) day periods, or existing rates will remain in effect as such times, subject to refunds if the City of Poway subsequently issues a written decision disapproving any portion of such rates, provided, however, that in order to order refunds, the City of Poway shall issue a brief written order to the cable operator, or cable operators, by the end of the ninety (90) or one hundred fifty (150) day period permitted above directing the cable operator, or cable operators, to keep an accurate account of all amounts received by reason of the rate in issue and on whose behalf such amounts were paid. Section 10. Upon receipt of a submission by a cable operator, or cable operators pursuant to Section 5 above, the City of Poway shall give public notice by way of publication of said submission in a newspaper of general circulation in the jurisdiction within fourteen (14) days of receipt by the City of Poway thereof. Said publication notice shall state, in substance, that the City of Poway is considering the submission of the cable operator reproduced therein, the date of submission by the cable operator, that said rates will become effective within thirty (30) days from the date of submission unless the City of Poway extends the review time pursuant to Section 8, and that interested parties may file written comments with the City Clerk within seven (7) days of publication. Sect ion 11. If, and to the extent, that the City of Poway extends the review period pursuant to Section 8, it shall then act upon the rate submission only at a public hearing which has been duly advertised and noticed pursuant to the requirements of Government Codes Section 6066. At said noticed public hearing, which may be continued from time to time, all interested part i es i nc 1 ud i ng, but not 1 i mited, to, subscri bers, shall possess a reasonable opportunity to express their views regarding the matters before the City Council. 6 of 7 JUN 15 1993 ITEM 13 - - Resolution No. 93- Page 4 - Section 12. The City of Poway shall issue a written decision in a rate- making proceeding whenever it disapproves an initial rate for the Basic Tier or associated equipment, in whole or in part, disapproves a request for a rate increase in whole or in part, or approves a request for an increase in whole or in part over the objections of interested parties. The City of Poway is not required to issue a written decision that approves an unopposed existing or proposed rate for the basic service tier or associated equipment. Any written decision required herein shall only be issued and released at an open and public meeting of the City council and the text shall be made available for public distribution at the offices of the City Clerk during normal business hours commencing the next business day after adoption by the City Council . Section 13. These regulations may be amended, from time to time, by the City Council with or without concurrence or consent of the cable operator, or cable operators, affected thereby. Section 14. If, and to the extent, a cable operator, or cable operators, submits a cost-of-service showing pursuant to CRF ss ss 76.937(c) and 76.924 seeking to justify a rate above the Commission's Basic Service Tier charge as defined in CRF ss ss 76.922 and 76.923, the City of Poway shall, within ninety (90) days of the date of submission, adopt rules, regulations, and procedures consistent with the rules and regulations of the Commission relating to the procedural and substantive criteria to applied by the City of Poway to said cost-of-service submission. Section 15. The City shall possess all remedies available to it under federal, state, and local law including, but not limited to, those remedies provided in CRF ss ss 76.940 and 76.943. PASSED, APPROVED, AND ADOPTED by the City Council of the City of Poway at a regularly scheduled meeting thereof this 15th day June, 1993. Don Higginson, Mayor ATTEST: Marjorie K. Wahlsten, City Clerk JUN 1 5 1993 ITEM 13 7 of 7