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0594ORDIN~NCE NO.~7~ AN ORDIN~NCE OF T~E CITY OF SOUTHI~%KE; PRESCRIBING REGULATIONS FOR RATES C~ARGED TO C~J~LE TELEVISION SUBSCRIBERS FOR TEE BASIC SERVICE TIER; PROVIDING T~AT TBIS ORDIN~NCE IS CUMIYLATIV~E; PROVIDING A SEVERABILITY CLAUSE; PROVIDING FOR PUBLICATION; ~ND PROVIDING AN EFFECTIVE DATE. WtLEREAS, the Federal Conununications Connnission ("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 W~EREAS, 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 W~EREAS, the City of Southlake franchises cable television service for the benefit of its citizens; and WHERE., 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 SOUTfILAKE, TEXAS: SECTION 1. DEFINITIONS. In this ordinance: BASIC CABLE RATES means the monthly charges 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. BENCHMARK means a per channel rate of charge ior cable service - 1 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 other wise controls or is responsible for, through any arrangement, the management and operation of such a cable system. CHANNEL means a unit of cable service identified and selected by a channel number or similar designation. 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 fully recover the costs of providing the basic service tier and to continue to attract capital. EQUIPMENT BASKET means a cost center to which the cable operator assigns the direct costs of service installation, leasing, maintaining and servicing customer equipment. It includes an allocation of all system joint and con%mon costs that installation, leasing, and repairing equipment share with other system activities and a reasonable profit, but excludes general system overhead. FCC means the Federal Cormnunications Commission. HSC means the hourly service charge that allows the cable operator to recover all equipment basket costs, except for the cable operator's costs of purchasing and financing the lease of customer equipment. INITIAL BASIC CABLE RATES means the rates that the cable operator is charging for %he basic service tier, including charges for associated equipment, at the time the city notifies the cable operator of the city's qualification and intent to regulate basic cable rates. MUST-CARRY SIGN~L means the signal of any station (except superstations which is required the basic service tier. local broadcast to be carried on - 2 - PEG CHANNEL means the channel capacity designated for public, educational, or governmental use, 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. SUPERSTATION means any non-local broadcast signal secondarily transmitted by satellite. SECTION 2. INITIAL REVIEW OF 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 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 o£ its rates. (c) Expedited determination and public hearing. (1) If the city council is able to expeditiously determine that the cable operator's rates for the basic service tier and associated equipment are within the FCC's reasonable rate standard, as determined by the applicable bench~ark, the city council shall: (A) hold a public hearing at which interested persons may express their views; and (B) the date the cable city. act to approve the rates within 30 days from operator filed its basic cable rates with the (2) If the city council takes no action within 30 days from the date the cable operator filed its basic cable rates with the city, the proposed rates will continue in effect. - 3 - (d) Extended review period. (1) If the city council is unable to determine whether the rates in issue 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 30 days from the date the cable operator filed its 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) 90 days if the city council needs more time to ensure that a rate is within the FCC's reasonable rate standard; or (B) 150 days if the cable operator has submitted a cost-of-service showing seeking to justify a rate above the applicable benchmark. (2) If the city council has not made a decision within the 90 or 150 day 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 and on whose behalf the amounts are paid. (e) Public hearing. During the extended review period and before taking action on the proposed rate, 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 proposed initial basic rate may request the city secretary to record the objection during the public hearing or may submit the objection in writing anytime 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 current basic cable rate 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 basic cable rates shall be established as follows: (1) If the current basic cable rates are below the benchmark, those rates shall become the initial basic cable rates and the cable operator's rates will be capped at that level. (2) If the current basic cable rates exceed the - 4 - benchmark, the rates shall be the greater of the cable operator's per channel rate on September 30, 1992, reduced by 10 percent, or the applicable benchmark, adjusted for inflation and any change in the number of channels occurring between September 30, 1992 and the initial date of regulation. (3) If the current basic cable rates exceed the benchmark, but the cable operator's per channel rate was below the benchmark on September 30, 1992, the initial basic cable rate shall be the benchmark, adjusted for inflation. (h) Cost-of-service showings. If a cable operator does not wish to reduce the rates to the permitted level, the cable operator shall have the opportunity to submit a cost-of-service showing in an attempt to justify a initial basic cable rates 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 10 percent, will prescribe the cable operator's new rates. (i) Decision. (1) By formal resolution. After completion of its review of the cable operator's proposed rates, the city council shall adopt its decision by formal resolution. The decision shall include one of the following: (A) If the proposal is within the FCC's reasonable rate standard or is justified by a cost-of-service analysis, the city council shall approve the initial basic cable rates proposed by the cable operator; or (B) If the proposal is not within the FCC's reasonable rate standard and the cost-of-service analysis, if any, does not justify the proposed rates, the city council shall establish initial basic cable rates that are within the FCC's reasonable rate standard or that are 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), retroactive to September 1, 1993. 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. (3) Statement of reasons for decision and public notice. If rates proposed by a cable operator are disapproved in whole or in part, or if there were objections made by other parties to the proposed rates, the resolution must state the reasons 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. (j) 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 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 after the determination of the initial basic cable rates. (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) act to approve the rate increase within 30 days from the date the cable operator filed its request with the city. 12) If the city council takes no action within 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 - 6 - 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: (A) 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) 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 90 or 150 day 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 to record the objection during the public hearing or may submit the objection in writing anytime 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) Delayed 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 - 7 - FCC. Based on the city council's findings, 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 basic cable rates. (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 review the submission pursuant 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 at anytime before the decision resolution is adopted. (j) Refunds. (1) The city council may order refunds of subscribers' rate payments with interest if: within the above; and (A) the city council was unable to make a decision extended time period as described in Paragraph (c) (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. - 8 - (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 when 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 operator may request the information be kept confidential in accordance with this section. (2) In cases where initial or 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 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. (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. requirements of Subsection (b), council. The city council will Requests which comply with the will be acted upon by the city grant the request if the cable - 9 - 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 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 working days of the city council's decision, and the release of the information will be stayed pending review. SECTION 5. AUTOMATIC RATE ADJUSTMENTS (a) Annual regulations, the channel rate for PI index. inflation adjustment. In accordance with FCC cable operator may adjust its capped base per the basic service tier annually' by the final GNP- (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 consen% 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 10 - service tier becomes subject to regulation 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 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 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 $500 for each day the cable operator fails to comply. SECTION 7. CUMULATIVE CLAUSE This ordinance shall be cumulative of all provisions of ordinances of the City of Southlake, Texas, except where the provisions of this ordinance are in direct conflict with the provisions of such ordinances, in which event the conflicting provisions of such ordinances are hereby repealed. SECTION 8. SEVERABILITY It is hereby declared to be the intention of the City Council that the phrases, clauses, sentences, paragraphs and sections of this ordinance are severable, and if any phrase, clause, sentence, paragraph or section of this ordinance shall be declared unconstitutional by the valid judgment or decree of any court of - 11 - competent jurisdiction, such unconstitutionality shall not affect any of the remaining phrases, clauses, sentences, paragraphs and sections of this ordinance, since the same would have been enacted by the City Council without the incorporation in this ordinance of any such unconstitutional phrase, clause, sentence, paragraph or section. SECTION 9. PUBLICATION IN PAMPHLET FORM The City Secretary of the City of Southlake is hereby authorized to publish this ordinance in book or pamphlet form for general distribution among the public, and the operative provisions of this ordinance as so published shall be admissible in evidence in all courts without further proof than the production thereof. SECTION 10. PUBLICATION The City Secretary of the City of Southlake is hereby directed to publish the proposed ordinance or its caption and penalty together with a notice setting out the time and place for a public hearing thereon at least 10 days before the second reading of this ordinance, and if this ordinance provides for the imposition of any penalty, fine or forfeiture for any violation of any of its provisions, then the City Secretary shall additionally publish this ordinance or its caption and penalty, in the official City newspaper one time within 10 days after passage of this ordinance, as required by Section 3.13 of the Charter of the City of Southlake. SECTION 11. EFFECTIVE DATE This ordinance shall be in full force and effect from and after its passage and publication as required by law, and it is so ordained. · 1993 . u L ,,,, ........ % ...-k ... .. ~ ." l%~ '.~ ..' ON FIRST READING ON T A OF ATTEST: dITY SECRETARY - 12 PASSED AND APPROVED ON SECOND READING ON THIS ~ DAY OF .-"4 ." ~ ",: ~% MA~0 , .. ~/~ .- ~ ATT~T: APPROVED AS TO FORM AND LEGALITY: Date: {~/~ ~,/ /~ - 13- Fort Worth Star-Telegram 400 W.SEVENTH STREET•FORT WORTH,TEXAS 76102 STATE OF TEXAS ty of Tarrant Before me, a Notary Public in and for said County and State, this day personally appeared PENNY GRAY Billing Specialist for the Fort Worth Star-Telegram , published by the Star-Telegram Inc . at Fort Worth, in Tarrant County, Texas ; and who, after being duly sworn, did depose and say that the following clipping of an advertisement was published in the above named paper on the following dates : DATE AD INVOICE NO. DESCRIPTION T AD SIZE. NCHUNE _ -RATE AMOUNT OCT 08, 2558072 CL . 358 1X51 L 51 . 43 ' 21 . 93 oct8 ORDINANCE NO.594 AN ORDINANCE OF THE CITY OF SOUTHLAKE; PRESCRIBING REGULA- TIONS FOR RATE CHARGED TO CABLE TEI SCR IBERS FOR THE BVIION ASIC SERVICE TIER- PROVID- ING THAT THIS ORD!, PROVIDINGUA CUMULATIVE - -- -- BILITY CLAUSE;PROVID- ING FOR PUBLICATION AND PROVIDING AN EF- FECTIVE DATE. ENFORCEMENT (e)Refunds. oecaymayr - i der the cable operator to re- I fund to subscribers a portion of previously paid rate under-N E D the following circumstances: (l)A portion ofthepreviously - - - - - BS RIBED A D SWORN mid rates anexbeen d ter- THIS THE 8th D OF/] O{/ACT. , 1 3 0 permitted tier charge or ��.!OF abovetheactual costof equip- NOTARY PUBLIC meet•or ,,��a �4 (2) the cable operator has ir:�' Pke4ryt failed to comply with a valid `' UNQI rat15[ erissuedbythecity. TARRANT COL , EXAS �I, '4''�{ (b)Fines. If the cable opera- is•' c COMM! for falls to comply with a rate I� .14 decision or refund order the .iti�, , .i,� FT.�. i cof eto a f ine of$5001for ea h s+'F�-*�` y daythe cable operator fallsto IIIIcompl PASS D Al.. APPROVED TTY HEHE CITIY`^OFF SO COUNCIL D U H- LAKE,THISJHE 5th day of OctobeFr, 199Zt+ lakes ickes,YMayor of South- Attest: Sandra L.LeGrand,City Sec- retar Aoprovedastbform: — TEAR ALONG Taylor Jr.,Chv Attorne E.Allen y RETURN THE LOWER PORTION WITH YOUR PAYMENT REMIT TO : 400 W . SEVENTH, FW, TX 76102 p�gp�pp Fort WorthStar-Telegram ACCOUNT AMOUNT 2558072 NUMBER CIT57 DUE 21 . 93 PAGE 3bF 1 S CITY OF SOUTHLAKE - 667 N CARROLL AVE [PLEASEPAY SOUTHLAKE TX 76092 9595 THISAMOUNT 21 . 93 ATTN : SANDRA LEGRAND PLEASE WRITE IN AMOUNT ENCLOSED Fort Worth Star-Telegram 400 W.SEVENTH STREET•FORT WORTH,TEXAS 76102 4 T E STATE OF TEXAS my of Tarrant Before me, a Notary Public in and for said County and State , this day personally appeared PENNY GRAY Billing Specialist for the Fort Worth Star—Telegram , published by the Star—Telegram Inc . at Fort Worth , in Tarrant County, Texas ; and who, after being duly sworn, did depose and say that the following clipping of an advertisement was published in the above named paper on the following dates : DATE AD INVOICE NO. DESCRIPTION AD SIZE TAL INCH/LINE RATE AMOUNT SEP 24 2549788 CL . 358 1X36 L 36 . 43 15 . 48 sep24 NG NOTICE OF PUBLIC HEAR- NOTICE IS HEREBY GIV- 1 EN 1L ALL INTERESTED PER SONS that the City Coun- cil of the City of Southlake, Texas,wlllbe holdinga public hearing during the Regular City Council meetingg to be held on October 5 1993,bbe�gyin- ning at 7:00 p.m.the meetin wl I I be held in the CITY Councl I Chambers of City Hall, 667 North Carroll Avenue,South- lake, Texas. The purpose of _.. -... the public hearingisfoconsid- er the fol lowin@ ordinance: ORDINANCE NO.594 4A-0-4- AN ORDINANCE OF THE N SWORN PRTY ESCRFB NGU SOUTHLAKE; • 24th SEPT. , 1993 TIONS FOR RATES THIS THE $A-Y--B� CHARGED R CABLE NOTARY PUELIC � �TELEVISION SUB- C-/ 0SCRIBERSFOTO E BASIC CABLE - ___-- ---- SERVICE TIER ORDI- -PROVID- ING THAT THIS ORDI- NANCE IS CUMULATIVE; TARRANT COUNTY, TEXAS laF)pi)4 PROVIDING A SEVERA �Aap`4' BILITY CLASUE;PROVID- / ING FOR PUBLICATION; {'� AND PROVIDING AN EF- y* �e FECTIVE DATe, .,..pp City of Southlake,Texas V ilhr Sandra L.LeGrand 44 �T,f City Secretary —TEAR ALONG THIS PERFORATION AND RETURN THE LOWER PORTION WITH YOUR PAYMENT-�� REMIT TO : 400 W . SEVENTH , FW, TX 76102 FiENn 7 G`: .► D0012a496N X XIN D 4 06 D(. W006,-2osi FbrtWQyth Star-Telegram ACCOUNT C I T 5 7 AMOUNT 15 . 4 8 NUMBER DUE \\ 1 1 y I tee t•ti PAGE OF CITY OF SOUTHLAKE 10 667 N CARROLL AVE 15 . 48 SOUTHLAKE TX 76092-9595 PLEASE PAY NS THIS AMOUNT , ATTN : SANDY LEGRAND PLEASE WRITE IN AMOUNT ENCLOSED