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HomeMy WebLinkAbout021802 ORD - 11/16/1993AN ORDINANCE PRESCRIBING PROCEDURAL REGULATIONS GOVERNING REVIEW OR ESTABLISHMENT OF RATES CHARGED OR TO BE CHARGED BY CABLE OPERATORS TO CABLE TELEVISION SUBSCRIBERS FOR THE BASIC CABLE SERVICE TIER AND ASSOCIATED EQUIPMENT; SPECIFYING PROCEDURES WHEREBY THE VIEWS OF INTERESTED PARTIES MAY BE HEARD CONCERNING RATES CHARGED OR TO BE CHARGED FOR THE BASIC CABLE SERVICE TIER AND ASSOCIATED EQUIPMENT; AND PROVIDING FOR SEVERABILITY. WHEREAS, the Federal Communications Commission ("FCC") has issued rules pursuant to the Cable Television Consumer Protection and Competition Act ("1992 Cable Act") implementing the regulation of cable television subscriber rates; and WHEREAS, these rules allow local franchising authorities to regulate rates for the basic cable service tier and associated equipment; and WHEREAS, it is the intention of the City Council to adopt cable rate regulations consistent with the federal regulations adopted by the FCC pursuant to 47 U.S.C. § 543(b); WHEREAS, the City of Corpus Christi franchises cable television service for the benefit of its citizens; and WHEREAS, the City has submitted its application for certification to regulate Basic Cable Rates to the FCC and it is expedient to adopt the required rate regulations at the earliest possible date to ensure the most competitive rates for the City's cable ratepayers; BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI: SECTION 1. Chapter 55 of the Corpus Christi Code of Ordinances is hereby amended by adding a new Article XV, Cable Television Rate Regulation, to hereafter read as follows: Sec. 55-190. Definitions. (A) Basic Cable Rates means the monthly charges for a subscription to the basic cable service tier and for the associated equipment. (B) Basic Cable Service Tier means a separately available service tier to which subscription is required for access to any other tier of service. The Basic Cable Service Tier shall include, at a minimum, the local and domestic broadcast signals distributed by the cable operator (except for superstations), all channels designated for A:MS5000.025 0 218 'i : abatila 2 public, educational or government use and all local commercial and noncommercial educational television and qualified low-power station signals carried to meet carriage obligations imposed by 47 U.S.C. §§ 534, 535. (C) Benchmark Rate means a per channel rate of charge for cable service and associated equipment which the FCC has determined is reasonable. (D) Cable Act of 1992 means the Cable Television Consumer Protection and Competition Act of 1992. (E) Cable Operator means any person or group of persons: (1) 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 (2) who otherwise controls or is responsible for, through any arrangement, the management and operation of such a cable system. (F) Channel means a unit of cable service identified and selected by a channel number or similar designation. (G) Cost -of -Service Showing means a filing in which the Cable Operator attempts to show that the Benchmark Rate or the Price Cap is not sufficient to allow the Cable Operator to recover fully the costs of providing the Basic Cable Service Tier. (H) FCC means the Federal Communications Commission. (I) Initial Basic Cable Service Rates means the rates which the Cable Operator is charging for the Basic Cable Service Tier, including charges for associated equipment, at the time the City notifies the Cable Operator that the City has been certified by the FCC to regulate Basic Cable Rates and that the City has adopted this ordinance specifying regulations which are consistent with FCC rules. (J) Must -Carry Signal means the signal of any local broadcast station (except a superstation) which is required to be carried on the Basic Cable Service Tier. (K) PEG Channel means the channel capacity designated for public, educational or government use, and facilities and equipment for the use of that channel capacity. A:MS5000.025 7 3 (L) Price Cap shall mean the limits set by the FCC to govern rate increases for the Basic Cable Service Tier (including associated equipment) once the initial regulated per channel rate has been determined. Reasonable Rate Standard means a per channel rate that is at or below the Benchmark Rate or Price Cap level, as applicable. Superstation means a television broadcast station the signal of which is secondarily transmitted by a satellite carrier beyond the local service area of such a station. Sec. 55-191. Rules and Procedures for Review of Initial Basic Cable Service Rates. The following rules and procedures shall apply to allow the City to review a Cable Operator's Initial Basic Cable Service Rates to determine whether such rates are reasonable under applicable laws and regulations. (A) Notice. Upon the City's certification by the FCC to regulate Basic Cable Rates and upon passage of this ordinance, the City shall notify a Cable Operator that the City intends to regulate Basic Cable Rates as authorized by the Cable Act of 1992. This notice shall be sent to a Cable Operator by certified mail, return receipt requested. (B) Cable Operator Response. (1) Within thirty (30) days after receiving this notice from the City, a Cable Operator shall file with the City a schedule specifying its Initial Basic Cable Service Rates (the "Rate Submission"). By this same deadline, a Cable Operator shall file with the City any necessary supporting materials showing how the Cable Operator's Basic Cable Service Rates conform to FCC rate regulations and any supporting material concerning the reasonableness of such rates. (2) For purposes of this ordinance, "filing City" shall be accomplished by delivering to the City Secretary and by delivering such materials to the City Attorney at time. The filing date for rate -related shall be the date of actual receipt by Secretary. A:MS5000.025 1 r with the materials a copy of the same materials the City 4 (C) Consideration of Cable Operator's Initial Basic Cable Service Rates. (1) If the City Council is able to determine that a Cable Operator's Initial Basic Cable Service Rates as specified in its Rate Submission, are reasonable under the FCC's rate regulations, then on or before thirty (30) days after the Cable Operator files the Rate Submission with the City: (a) the City Council shall hold a public hearing at which interested persons may express their views concerning the Rate Submission; and (b) the City Council may act to approve the rates specified in the Rate Submission. (2) If the City Council takes no action regarding the Rate Submission within thirty (30) days after the date it is filed with the City, then the Initial Basic Cable Service Rates will continue in effect subject to subsequent refund orders or other remedial action by the City Council to the extent allowed by applicable laws or regulations. (D) Extended Review Period for Consideration of Cable Operator's Initial Basic Cable Service Rates. (1) If, on or before thirty (30) days after the Rate Submission is filed with the City, the City Council has yet to determine whether the Cable Operator's Initial Basic Cable Service Rates are reasonable according to FCC regulations, then the City Council may issue a tolling order ("Tolling Order") to allow the City Council more time to make a final determination (a "Disposition Order") concerning the reasonableness of such rates. (2) The City Council may issue any such Tolling Order on or before thirty (30) days after the filing date of a Rate Submission. In a Tolling Order, the City Council may obtain the following periods of time to issue a Disposition Order concerning the Cable Operator's Initial Basic Cable Service Rates (the "Extended Review Periods"): (a) 120 days after a Rate Submission filing date to ensure that the Initial Basic Cable Service Rates are within the FCC's Reasonable Rate Standard; or A:MS5000.025 (3) 5 (b) 180 days after a Rate Submission filing date if the Cable Operator has submitted a Cost -of - Service Showing to justify Initial Basic Cable Service Rates above the applicable Benchmark Rate. During an Extended Review Period, the Cable Communications Commission (the "Commission") shall meet to conduct a public hearing at which interested persons may appear to express their views concerning the Cable Operator's Rate Submission. Instead of or in addition to appearing before the Commission, interested persons may submit written objections to the Rate Submission prior to such Commission meeting by filing them with the City Secretary. Written objections may also be submitted to the Commission at the time of the above-described public hearing. To be considered by either the Commission or the City Council, a written objection must state the objector's name and address. (4) At any time after a Rate Submission, the City Council may issue an accounting order (the "Accounting Order"). The Accounting Order shall request that the Cable Operator maintain its books and records to reflect accurately the amounts received by the Cable Operator because of the Initial Basic Cable Service Rates and on whose behalf such amounts are paid. The Accounting Order is intended to facilitate repayment of any rate refunds directly to individual or specific subscribers who pay unreasonable rates. Sec. 55-192. Rules and Procedures for Review of Proposed Rate Increases. The following rules and procedures shall apply to allow the City to review a Cable Operator's proposed increase in rates above the approved Initial Basic Cable Service Rates to determine whether such an increase is reasonable under applicable laws and regulations. "Approved" Initial Basic Cable Service Rates shall be those approved by the City Council in a Disposition Order except as such rates may be modified by a subsequent FCC order. Such an FCC order shall control unless enforcement of that order is stayed or enjoined. (A) Notice. A Cable Operator in the City which desires to increase rates for the Basic Cable Service Tier and associated equipment shall file a written request (the "Rate Increase Submission") with the City at least thirty (30) days before the Cable Operator desires the increase A:M55000.025 6 to take effect. The Cable Operator shall notify cable subscribers of the proposed increase in writing at the billing cycle that is at least thirty (30) days before any proposed increase is effective. (B) Bases for Rate Increases. A request for a rate increase may be based on grounds including inflation and increases in "external costs" ("External Costs"). External Costs are defined by the FCC. Generally, they are categories of costs which a Cable Operator may "pass through" to subscribers without a Cost -of -Service Showing even if resulting rates exceed the applicable Price Cap. In accordance with FCC rules, to the extent that a Cable Operator files a Rate Increase Submission based on increases in External Costs, the City Council shall issue a Disposition Order concerning those portions of the requested rate increase within thirty (30) days. Rate increase issues other than External Cost increases may be disposed of in accordance with the schedule specified below. Any Rate Increase Submission proposing increased rates to reflect increases in External Costs or the annual inflation adjustment must also reflect any decreases in External Costs that have occurred since the time External Costs were most recently subject to review by the City Council. In addition, a Cable Operator shall file with the City revised rates to reflect decreases in External Costs (a "Rate Decrease Submission"). A Rate Decrease Submission shall be filed no later than one year after a decrease in an External Cost occurs. (C) Consideration of Cable Operator's Request to Increase Basic Cable Service Rates. (1) If the City Council is able to determine that a Cable Operator's request to increase rates for the Basic Cable Service Tier (including associated equipment), as specified in its Rate Increase Submission, is reasonable under the FCC's rate regulations, then on or before thirty (30) days after the Cable Operator files the Rate Increase Submission with the City: (a) the City Council shall hold a public hearing at which interested persons may express their views concerning the Rate Increase Submission; and A:M55000.025 7 (b) the City Council may act to approve the rates specified in the Rate Increase Submission. (2) If the City Council takes no action regarding the Rate Increase Submission within thirty (30) days after the date it is filed with the City, then the increased rates will become effective after this thirty -day period subject to subsequent refund orders or other remedial action by the City Council to the extent allowed by applicable laws or regulations. (D) Extended Review Period for Consideration of a Request to Increase Basic Cable Service Rates. (1) If, on or before thirty (30) days after the Rate Increase Submission is filed with the City, the City Council has yet to determine whether the Cable Operator's proposed rate increase is reasonable according to FCC regulations, then the City Council may issue a tolling order ("Tolling Order") to allow the City Council more time to make a final determination (a "Disposition Order") concerning the reasonableness of the proposed rate increase. (2) The City Council may issue any such Tolling Order on or before thirty (30) days after the filing date of a Rate Increase Submission. In a Tolling Order, the City Council may obtain the following periods of time to issue a Disposition Order concerning the proposed rate increase (the "Extended Review Periods"): (3) A:MS5000.025 1 r (a) 120 days after a Rate Increase Submission filing date to ensure that the proposed increase is within the FCC's Reasonable Rate Standard as determined by the applicable Price Cap; or (b) 180 days after a Rate Increase Submission filing date if the Cable Operator has submitted a Cost -of -Service Showing to justify a rate increase above the applicable Price Cap. During an Extended Review Period, the Cable Communications Commission (the "Commission") shall meet to conduct a public hearing at which interested persons may appear to express their views concerning the Cable Operator's Rate Increase Submission. Instead of or in addition to appearing before the Commission, interested persons may 8 submit written objections to the Rate Increase Submission prior to such Commission meeting by filing them with the City Secretary. Written objections may also be submitted to the Commission at the time of the above-described public hearing. To be considered by either the Commission or the City Council, a written objection must state the objector's name and address. (4) During any Extended Review Period, a proposed rate increase shall not be effective. (5) The City Council may issue an Accounting Order before the end of any Extended Review Period. Sec. 55-193. Methods of Rate Analysis. The City Council will review the Initial Basic Cable Service Rates or proposed rate increases utilizing Benchmark Rate, Price Cap, Cost -of -Service, GNP -PI or External Cost analysis, or other methodology, as appropriate, in accordance with applicable laws or regulations. Sec. 55-194. Disposition Orders. After the City Council has completed its review of Initial Basic Cable Service Rates or a proposed rate increase, it shall issue a Disposition Order concerning the Rate Submission or Rate Increase Submission. A Disposition Order shall state the reasons for the City Council's decision. A Disposition Order need not be in writing except when a written decision is required by FCC regulations. Public notice of such a written decision shall be given by publishing a notice of the decision one time in a newspaper of general circulation in the city. Sec. 55-195. Remedies. A Disposition Order concerning a Rate Submission or Rate Increase Submission may approve or deny a submission, in whole or in part, and provide for any remedies allowed by applicable laws or regulations. The City Council may order: (A) prospective rate reductions (rate rollbacks); (B) the imposition of prescribed rates; and (C) refunds (with interest). Prior to prescribing a rate (a "Prescribed Rate") in a Disposition Order, the City Council shall provide a Cable Operator notice, by certified mail, return receipt requested, of its intention to impose a Prescribed Rate. Then, the Cable Operator A:MS5000.025 9 may file a written submission with the City stating why the proposed Prescribed Rate should not be imposed. Such a submission shall be filed with the City no later than ten (10) days after the date a Cable Operator receives notice of the City Council's intention to impose a Prescribed Rate. If a Disposition Order specifies a Prescribed Rate, the Disposition Order shall affirmatively demonstrate why the Initial Basic Service Rates or a proposed rate increase are unreasonable and why the Prescribed Rate is reasonable. In its Disposition Order, the City Council may order refunds to subscribers to the full extent allowed by applicable laws or regulations. Without limiting the availability of the refund remedy, refunds to subscribers may be ordered in circumstances where: (D) a Cable Operator fails to comply with a rate decision (Disposition Order) and continues to charge rates which are unreasonable under FCC regulations; (E) the City Council finds that Initial Basic Cable Service Rates are unreasonable under FCC regulations and that such rates are not supported by a persuasive Cost -of - Service Showing by the Cable Operator; or (F) the City Council has issued a Tolling Order but has not completed its review of the proposed rate increase by the end of the applicable Extended Review Period and the proposed rate increase is later found to be unreasonable under FCC regulations. Refunds shall be paid in accordance with applicable laws or regulations; however, in circumstances where a Cable Operator can, without undue administrative difficulty or unreasonable burden, identify actual subscribers who have paid unreasonable charges, the City Council encourages a Cable Operator to pay refunds directly to those subscribers either through direct payment or as a specifically identified credit to their bills. Before refunds may be ordered, the City Council shall afford a Cable Operator due process by giving it notice and an opportunity to participate. Thus, the City Council shall provide a Cable Operator notice, by certified mail, return receipt requested, of its intention to order refunds. Then, a Cable Operator may file a written submission with the City stating why refunds should not be ordered. Such a submission shall be filed with the City no later than ten (10) days after the Cable Operator receives the notice. The submission shall also state to whom and how refunds will be repaid if refunds are ordered over the objection of the Cable Operator. If a Cable Operator does not intend to pay ordered refunds directly to the subscribers who have paid the charges, the submission shall specify in detail the nature of the undue A:M55000.025 7 10 administrative difficulties or unreasonable burdens which prevent such repayment. Sec. 55-196. Obtaining Information From a Cable Operator to Evaluate Rate Submissions or Rate Increase Submissions. (A) After a Rate Submission or Rate Increase Submission is filed with the City, the Cable Operator may be required to file additional information with the City regarding its submission as follows. In cases where a submission specifies or proposes rates which exceed the FCC's presumptively reasonable level, the City Council may collect additional information, including confidential or proprietary information, to make a rate determination. Such information may include, but is not limited to, information concerning the Cable Operator's actual costs including equipment costs. (B) In cases where the submission specifies or proposes rates which appear to comply with the FCC's reasonableness standard, requests for additional information should relate to having the Cable Operator properly document that its prices are in accord with the FCC's reasonableness standard. (C) The burden of proof is on a Cable Operator to demonstrate that its Initial Basic Cable Service Rates, or proposed increases in these rates, comply with 47 U.S.C. § 543 and FCC regulations. Thus, a Cable Operator shall file with the City sufficient information to allow the City Council to make such determinations. (D) To protect confidentiality of Rate Submission or Rate Increase Submission materials, or other materials filed with the City in connection with such submissions, the following procedures shall apply. (1) Information filed with the City will be considered routinely available for public inspection unless a Cable Operator files a written request with the City requesting confidential treatment. If no request for confidentiality is made, the City Council assumes no obligation to consider the need for nondisclosure but, in the unusual instance, the City Council may determine on its own motion, and in accordance with applicable law, that the materials should be withheld from public inspection. A: MS5000.025 T r 11 (2) A copy of the request shall be attached to and shall cover all of the materials to which it applies including all copies of those materials. This also includes copies of materials delivered to the City Attorney in accordance with the requirements of this ordinance. Such written request shall specify in detail all materials to which the request pertains. If feasible, the materials to which the request applies shall be physically separated from any materials to which the request does not apply. (3) (4) A request shall contain a statement of the reasons for withholding the materials from public inspection and of the facts upon which those reasons are based. If the request is that materials be withheld from inspection for a limited period of time, that period will be specified. (5) Requests for confidentiality which do not comply with the requirements of this section 55-196(D) will not be considered. (6) The City Council will grant the request if it finds by a preponderance of the evidence that nondisclosure is consistent with the provisions of the Freedom of Information Act ("FOIA"). If the request is granted, a copy of an order in this regard will be available for public inspection instead of the materials sought to be kept confidential. (7) If materials are filed voluntarily (i.e., absent any direction by the City Council), the Cable Operator submitting them may request the City Council to return the materials, without considering them, if the request for confidentiality is denied. In that event, the materials will ordinarily be returned. Only in the unusual instance where the public interest so requires will the materials be made available for public inspection. (8) If submission of materials is required by the City Council and the request for confidentiality is denied, the materials will be made available for public inspection. A:M55000.025 (9) 12 If the City Council denies a request for confidentiality, the Cable Operator which submitted the request may, within five (5) working days, file an application for review by the FCC. If the application for review is denied, the Cable Operator shall notify the City Attorney immediately in writing. The Cable Operator will be afforded five (5) working days in which to seek a judicial stay of the FCC ruling. If these periods expire without action by the Cable Operator, the materials will be returned to the Cable Operator which submitted them or they will be placed in a public file. Sec. 55-197. Disposition Order Appeals and Motions for Rehearing. A Disposition Order may be appealed to the FCC in accordance with applicable laws or regulations. If an appeal to the FCC is initiated, a Cable Operator shall also file a motion for rehearing in accordance with Section 23(D)(5) of Ordinance Number 16133. Proceedings before the City Council in connection with such a motion for rehearing may render moot such an FCC appeal thus saving the public money which might otherwise be spent prosecuting such an appeal to conclusion. Sec. 55-198. Rate Consultant Costs. When TCI Cablevision of Texas, Inc. ("TCI") files a Rate Submission or Rate Increase Submission, or to the extent its rates for services are reviewed by the City Council in accordance with its franchise with the City, the City may retain consultants. Costs of such consultants shall be borne equally by the City and TCI in accordance with Section 23(D)(4) of Ordinance Number 16133. SECTION 2. If for any reason any section, paragraph, subdivision, clause, phrase, word or provision of this ordinance shall be held invalid or unconstitutional by final judgment of a court of competent jurisdiction, it shall not affect any other section, paragraph, subdivision, clause, phrase, word or provision of this ordinance for it is the definite intent of this City Council that every section, paragraph, subdivision, clause, phrase, word or provision hereof be given full force and effect for its purpose. A:MS5000.025 That the foregoing ordinance was read for the first time and passed to its second reading on this the 2(c day of Oct-ob ✓ 19 C3 , by the following vote: Mary Rhodes Dr. Jack Best Melody Cooper Cezar Galindo Betty Jean Longoria Cktoak Cc (L&y Edward A. Martin _n Dr. David McNichols (,1�1 k' David Noyola Clif Moss uttA L_ That the foregoing ordinance was read for the second time and passe�V finally on this the Flo day of OK ink6t r , 19 , by the following vote: Mary Rhodes t-st Edward A. Martin Dr. Jack Best � Dr. David McNichols (AV - Melody " YMelody Cooper (AY - David Noyola 0//9e,�,�i Cezar Galindo Clif Moss Betty Jean Longoria l/612.- PAASED AND APPROVED, this the 1(0 day of KIVe., Ytv , 1 ATTEST: City Secretary APPROVED: 02:.2DAY OF JAMES R. BRAY, JR., CITY ATTORNEY Assistant City Attorney \forms\044 MAYOR THE CI CORPUS CHRISTI 021802 , 19 93