citation: PUC § 5830

text:
For purposes of this division, the following words have the following meanings:

(a) “Broadband” means any service defined as broadband in the most recent Federal Communications Commission inquiry pursuant to Section 706 of the Telecommunications Act of 1996 (P.L. 104-104).

(b) “Cable operator” means any person or group of persons that either provides cable service over a cable system and directly, or through one or more affiliates, owns a significant interest in a cable system; or that otherwise controls or is responsible for, through any arrangement, the management and operation of a cable system, as set forth in Section 522(5) of Title 47 of the United States Code.

(c) “Cable service” is defined as the one-way transmission to subscribers of either video programming, or other programming service, and subscriber interaction, if any, that is required for the selection or use of video programming or other programming service, as set forth in Section 522(6) of Title 47 of the United States Code.

(d) “Cable system” is defined as set forth in Section 522(7) of Title 47 of the United States Code.

(e) “Commission” means the Public Utilities Commission.

(f) “Franchise” means an initial authorization, or renewal of an authorization, issued by a franchising entity, regardless of whether the authorization is designated as a franchise, permit, license, resolution, contract, certificate, agreement, or otherwise, that authorizes the construction and operation of any network in the right-of-way capable of providing video service to subscribers.

(g) “Franchise fee” means the fee adopted pursuant to Section 5840.

(h) “Holder” or “holder of a state franchise” means a person or group of persons that has been issued a state franchise from the commission pursuant to this division.

(i) “Incumbent cable operator” means a cable operator or OVS serving subscribers under a franchise in a particular city, county, or city and county franchise area on January 1, 2007.

(j) “Local entity” means any city, county, city and county, or joint powers authority within the state within whose jurisdiction a holder of a state franchise under this division may provide cable service or video service.

(k) “Local franchising entity” means the city, county, city and county, or joint powers authority entitled to require franchises and impose fees on cable operators, as set forth in Section 53066 of the Government Code.

(l) “Network” means a component of a facility that is wholly or partly physically located within a public right-of-way and that is used to provide video service, cable service, voice, or data services.

(m) “Open-video system” or “OVS” means those services set forth in Section 573 of Title 47 of the United States Code.

(n) “OVS operator” means any person or group of persons that either provides cable service over an open-video system directly, or through one or more affiliates, owns a significant interest in an open-video system, or that otherwise controls or is responsible for, through any arrangement, the management of an open-video system.

(o) “Public rights-of-way” means the area along and upon any public road or highway, or along or across any of the waters or lands within the state.

(p) “State franchise” means a franchise that is issued pursuant to this division.

(q) “Subscriber” means a person who lawfully receives video service from the holder of a state franchise for a fee.

(r) “Video programming” means programming provided by, or generally considered comparable to programming provided by, a television broadcast station, as set forth in Section 522(20) of Title 47 of the United States Code.

(s) “Video service” means video programming services, cable service, or OVS service provided through facilities located at least in part in public rights-of-way without regard to delivery technology, including Internet protocol or other technology. This definition does not include (1) any video programming provided by a commercial mobile service provider defined in Section 332(d) of Title 47 of the United States Code, or (2) video programming provided as part of, and via, a service that enables users to access content, information, electronic mail, or other services offered over the public Internet.

(t) “Video service provider” means an entity providing video service.

history: (History: Amended by Stats. 2007, Ch. 123, Sec. 2. Effective January 1, 2008.)


kind: section

code: PUC

citation: PUC § 5840

text:
(a) The commission is the sole franchising authority for a state franchise to provide video service under this division. Neither the commission nor any local franchising entity or other local entity of the state may require the holder of a state franchise to obtain a separate franchise or otherwise impose any requirement on any holder of a state franchise except as expressly provided in this division. Sections 53066, 53066.01, 53066.2, and 53066.3 of the Government Code shall not apply to holders of a state franchise.

(b) The application process described in this section and the authority granted to the commission under this section shall not exceed the provisions set forth in this section.

(c) Any person or corporation who seeks to provide video service in this state for which a franchise has not already been issued, after January 1, 2008, shall file an application for a state franchise with the commission. The commission may impose a fee on the applicant that shall not exceed the actual and reasonable costs of processing the application and shall not be levied for general revenue purposes.

(d) No person or corporation shall be eligible for a state-issued franchise, including a franchise obtained from renewal or transfer of an existing franchise, if that person or corporation is in violation of any final nonappealable order relating to either the Cable Television and Video Provider Customer Service and Information Act (Article 3.5 (commencing with Section 53054) of Chapter 1 of Part 1 of Division 2 of Title 5 of the Government Code) or the Video Customer Service Act (Article 4.5 (commencing with Section 53088) of Chapter 1 of Part 1 of Division 2 of Title 5 of the Government Code).

(e) The application for a state franchise shall be made on a form prescribed by the commission and shall include all of the following:

(1) A sworn affidavit, signed under penalty of perjury by an officer or another person authorized to bind the applicant, that affirms all of the following:

(A) That the applicant has filed or will timely file with the Federal Communications Commission all forms required by the Federal Communications Commission before offering cable service or video service in this state.

(B) That the applicant or its affiliates agrees to comply with all federal and state statutes, rules, and regulations, including, but not limited to, the following:

(i) A statement that the applicant will not discriminate in the provision of video or cable services as provided in Section 5890.

(ii) A statement that the applicant will abide by all applicable consumer protection laws and rules as provided in Section 5900.

(iii) A statement that the applicant will remit the fee required by subdivision (a) of Section 5860 to the local entity.

(iv) A statement that the applicant will provide PEG channels and the required funding as required by Section 5870.

(C) That the applicant agrees to comply with all lawful city, county, or city and county regulations regarding the time, place, and manner of using the public rights-of-way, including, but not limited to, payment of applicable encroachment, permit, and inspection fees.

(D) That the applicant will concurrently deliver a copy of the application to any local entity where the applicant will provide service.

(2) The applicant’s legal name and any name under which the applicant does or will do business in this state.

(3) The address and telephone number of the applicant’s principal place of business, along with contact information for the person responsible for ongoing communications with the commission.

(4) The names and titles of the applicant’s principal officers.

(5) The legal name, address, and telephone number of the applicant’s parent company, if any.

(6) A description of the video service area footprint that is proposed to be served, as identified by a collection of United States Census Bureau Block numbers (13 digit) or a geographic information system digital boundary meeting or exceeding national map accuracy standards. This description shall include the socioeconomic status information of all residents within the service area footprint.

(7) If the applicant is a telephone corporation or an affiliate of a telephone corporation, as defined in Section 234, a description of the territory in which the company provides telephone service. The description shall include socioeconomic status information of all residents within the telephone corporation’s service territory.

(8) The expected date for the deployment of video service in each of the areas identified in paragraph (6).

(9) Adequate assurance that the applicant possesses the financial, legal, and technical qualifications necessary to construct and operate the proposed system and promptly repair any damage to the public right-of-way caused by the applicant. To accomplish these requirements, the commission may require a bond.

(f) The commission may require that a corporation with wholly owned subsidiaries or affiliates is eligible only for a single state-issued franchise and prohibit the holding of multiple franchises through separate subsidiaries or affiliates. The commission may establish procedures for a holder of a state-issued franchise to amend its franchise to reflect changes in its service area.

(g) The commission shall commence accepting applications for a state franchise no later than April 1, 2007.

(h) (1) The commission shall notify an applicant for a state franchise and any affected local entities whether the applicant’s application is complete or incomplete before the 30th calendar day after the applicant submits the application.

(2) If the commission finds the application is complete, it shall issue a state franchise before the 14th calendar day after that finding.

(3) If the commission finds that the application is incomplete, it shall specify with particularity the items in the application that are incomplete and permit the applicant to amend the application to cure any deficiency. The commission shall have 30 calendar days from the date the application is amended to determine its completeness.

(4) The failure of the commission to notify the applicant of the completeness or incompleteness of the application before the 44th calendar day after receipt of an application shall be deemed to constitute issuance of the certificate applied for without further action on behalf of the applicant.

(i) The state franchise issued by the commission shall contain all of the following:

(1) A grant of authority to provide video service in the service area footprint as requested in the application.

(2) A grant of authority to use the public rights-of-way, in exchange for the franchise fee adopted under subdivision (q), in the delivery of video service, subject to the laws of this state.

(3) A statement that the grant of authority is subject to lawful operation of the cable service or video service by the applicant or its successor in interest.

(j) The state franchise issued by the commission may be terminated by the video service provider by submitting at least 90 days prior written notice to subscribers, local entities, and the commission.

(k) It is unlawful to provide video service without a state or locally issued franchise.

(l) Subject to the notice requirements of this division, a state franchise may be transferred to any successor in interest of the holder to which the certificate is originally granted, provided that the transferee first submits all of the information required of the applicant by this section to the commission and is in compliance with Section 5970.

(m) In connection with, or as a condition of, receiving a state franchise, the commission shall require a holder to notify the commission and any applicable local entity within 14 business days of any of the following changes involving the holder of the state franchise:

(1) Any transaction involving a change in the ownership, operation, control, or corporate organization of the holder, including a merger, an acquisition, or a reorganization.

(2) A change in the holder’s legal name or the adoption of, or change to, an assumed business name. The holder shall submit to the commission a certified copy of either of the following:

(A) The proposed amendment to the state franchise.

(B) The certificate of assumed business name.

(3) A change in the holder’s principal business address or in the name of the person authorized to receive notice on behalf of the holder.

(4) Any transfer of the state franchise to a successor in interest of the holder. The holder shall identify the successor in interest to which the transfer is made.

(5) The termination of any state franchise issued under this division. The holder shall identify both of the following:

(A) The number of subscribers in the service area covered by the state franchise being terminated.

(B) The method by which the holder’s subscribers were notified of the termination.

(6) A change in one or more of the service areas of the holder of a state franchise pursuant to this division that would increase or decrease the territory within the service area. The holder shall describe the new boundaries of the affected service areas after the proposed change is made.

(n) Prior to offering video service in a local entity’s jurisdiction, the holder of a state franchise shall notify the local entity that the video service provider will provide video service in the local entity’s jurisdiction. The notice shall be given at least 10 days, but no more than 60 days, before the video service provider begins to offer service.

(o) Any video service provider that currently holds a franchise with a local franchising entity is entitled to seek a state franchise in the area designated in that franchise upon meeting any of the following conditions:

(1) The expiration, prior to any renewal or extension, of its local franchise.

(2) A mutually agreed upon date set by both the local franchising entity and video service provider to terminate the franchise provided in writing by both parties to the commission.

(3) When a video service provider that holds a state franchise provides the notice required pursuant to subdivision (n) to a local jurisdiction that it intends to initiate providing video service in all or part of that jurisdiction, a video service provider operating under a franchise issued by a local franchising entity may elect to obtain a state franchise to replace its locally issued franchise. The franchise issued by the local franchising entity shall terminate and be replaced by a state franchise when the commission issues a state franchise for the video service provider that includes the entire service area served by the video service provider and the video service provider notifies the local entity that it will begin providing video service in that area under a state franchise.

(p) Notwithstanding any rights to the contrary, an incumbent cable operator opting into a state franchise under this section shall continue to serve all areas as required by its local franchise agreement existing on January 1, 2007, until that local franchise otherwise would have expired. However, an incumbent cable operator that is also a telephone corporation with less than 1,000,000 telephone customers in California and is providing video service in competition with another incumbent cable operator shall not be required to provide service beyond the area in which it is providing video service as of January 1, 2007.

(q) (1) There is hereby adopted a state franchise fee payable as rent or a toll for the use of the public rights-of-way by holders of the state franchise issued pursuant to this division. The amount of the state franchise fee shall be 5 percent of gross revenues, as defined in subdivision (d) of Section 5860, or the percentage applied by the local entity to the gross revenue of the incumbent cable operator, whichever is less. If there is no incumbent cable operator or upon the expiration of the incumbent cable operator’s franchise, the amount of the state franchise fee shall be 5 percent of gross revenues, as defined in subdivision (d) of Section 5860, unless the local entity adopts an ordinance setting the amount of the franchise fee at less than 5 percent.

(2) (A) The state franchise fee shall apply equally to all video service providers in the local entity’s jurisdiction.

(B) Notwithstanding subparagraph (A), if the video service provider is leasing access to a network owned by a local entity, the local entity may set a franchise fee for access to the network different from the franchise fee charged to a video service provider for access to the rights-of-way to install its own network.

history: (History: Amended by Stats. 2007, Ch. 123, Sec. 3. Effective January 1, 2008.)

division: 2.5. THE DIGITAL INFRASTRUCTURE AND VIDEO COMPETITION ACT OF 2006


citation: PUC § 5850

text:
(a) A state-issued franchise shall only be valid for 10 years after the date of issuance, and the holder shall apply for a renewal of the state franchise for an additional 10-year period if it wishes to continue to provide video services in the area covered by the franchise after the expiration of the franchise.

(b) Except as provided in this section, the criteria and process described in Section 5840 shall apply to a renewal registration, and the commission shall not impose any additional or different criteria.

(c) Renewal of a state franchise shall be consistent with federal law and regulations.

(d) The commission shall not renew the franchise if the video service provider is in violation of any final nonappealable court order issued pursuant to this division.

history: (History: Amended by Stats. 2007, Ch. 123, Sec. 4. Effective January 1, 2008.)

path: 2.5. THE DIGITAL INFRASTRUCTURE AND VIDEO COMPETITION ACT OF 2006


citation: PUC § 5860

text:
(a) The holder of a state franchise that offers video service within the jurisdiction of the local entity shall calculate and remit to the local entity a state franchise fee, adopted pursuant to subdivision (q) of Section 5840, as provided in this section. The obligation to remit the franchise fee to a local entity begins immediately upon provision of video service within that local entity’s jurisdiction. However, the remittance shall not be due until the time of the first quarterly payment required under subdivision (h) that is at least 180 days after the provision of service began. The fee remitted to a city or city and county shall be based on gross revenues, as defined in subdivision (d), derived from the provision of video service within that jurisdiction. The fee remitted to a county shall be based on gross revenues earned within the unincorporated area of the county. No fee under this section shall become due unless the local entity provides documentation to the holder of the state franchise supporting the percentage paid by the incumbent cable operator serving the area within the local entity’s jurisdiction. The fee shall be calculated as a percentage of the holder’s gross revenues, as defined in subdivision (d). The fee remitted to the local entity pursuant to this section may be used by the local entity for any lawful purpose.

(b) The state franchise fee shall be a percentage of the holder’s gross revenues, as defined in subdivision (d).

(c) No local entity or any other political subdivision of this state may demand any additional fees or charges or other remuneration of any kind from the holder of a state franchise based solely on its status as a provider of video or cable services other than as set forth in this division and may not demand the use of any other calculation method or definition of gross revenues. However, nothing in this section shall be construed to limit a local entity’s ability to impose utility user taxes and other generally applicable taxes, fees, and charges under other applicable provisions of state law that are applied in a nondiscriminatory and competitively neutral manner.

(d) For purposes of this section, the term “gross revenues” means all revenue actually received by the holder of a state franchise, as determined in accordance with generally accepted accounting principles, that is derived from the operation of the holder’s network to provide cable or video service within the jurisdiction of the local entity, including all of the following:

(1) All charges billed to subscribers for any and all cable service or video service provided by the holder of a state franchise, including all revenue related to programming provided to the subscriber, equipment rentals, late fees, and insufficient fund fees.

(2) Franchise fees imposed on the holder of a state franchise by this section that are passed through to, and paid by, the subscribers.

(3) Compensation received by the holder of a state franchise that is derived from the operation of the holder’s network to provide cable service or video service with respect to commissions that are paid to the holder of a state franchise as compensation for promotion or exhibition of any products or services on the holder’s network, such as a “home shopping” or similar channel, subject to paragraph (4) of subdivision (e).

(4) A pro rata portion of all revenue derived by the holder of a state franchise or its affiliates pursuant to compensation arrangements for advertising derived from the operation of the holder’s network to provide video service within the jurisdiction of the local entity, subject to paragraph (1) of subdivision (e). The allocation shall be based on the number of subscribers in the local entity divided by the total number of subscribers in relation to the relevant regional or national compensation arrangement.

(e) For purposes of this section, the term “gross revenue” set forth in subdivision (d) does not include any of the following:

(1) Amounts not actually received, even if billed, such as bad debt; refunds, rebates, or discounts to subscribers or other third parties; or revenue imputed from the provision of cable services or video services for free or at reduced rates to any person as required or allowed by law, including, but not limited to, the provision of these services to public institutions, public schools, governmental agencies, or employees except that forgone revenue chosen not to be received in exchange for trades, barters, services, or other items of value shall be included in gross revenue.

(2) Revenues received by any affiliate or any other person in exchange for supplying goods or services used by the holder of a state franchise to provide cable services or video services. However, revenue received by an affiliate of the holder from the affiliate’s provision of cable or video service shall be included in gross revenue as follows:

(A) To the extent that treating the revenue as revenue of the affiliate, instead of revenue of the holder, would have the effect of evading the payment of fees that would otherwise be paid to the local entity.

(B) The revenue is not otherwise subject to fees to be paid to the local entity.

(3) Revenue derived from services classified as noncable services or nonvideo services under federal law, including, but not limited to, revenue derived from telecommunications services and information services, other than cable services or video services, and any other revenues attributed by the holder of a state franchise to noncable services or nonvideo services in accordance with Federal Communications Commission rules, regulations, standards, or orders.

(4) Revenue paid by subscribers to “home shopping” or similar networks directly from the sale of merchandise through any home shopping channel offered as part of the cable services or video services. However, commissions or other compensation paid to the holder of a state franchise by “home shopping” or similar networks for the promotion or exhibition of products or services shall be included in gross revenue.

(5) Revenue from the sale of cable services or video services for resale in which the reseller is required to collect a fee similar to the franchise fee from the reseller’s subscribers.

(6) Amounts billed to, and collected from, subscribers to recover any tax, fee, or surcharge imposed by any governmental entity on the holder of a state franchise, including, but not limited to, sales and use taxes, gross receipts taxes, excise taxes, utility users taxes, public service taxes, communication taxes, and any other fee not imposed by this section.

(7) Revenue from the sale of capital assets or surplus equipment not used by the purchaser to receive cable services or video services from the seller of those assets or surplus equipment.

(8) Revenue from directory or Internet advertising revenue, including, but not limited to, yellow pages, white pages, banner advertisement, and electronic publishing.

(9) Revenue received as reimbursement by programmers of specific, identifiable marketing costs incurred by the holder of a state franchise for the introduction of new programming.

(10) Security deposits received from subscribers, excluding security deposits applied to the outstanding balance of a subscriber’s account and thereby taken into revenue.

(f) For the purposes of this section, in the case of a video service that may be bundled or integrated functionally with other services, capabilities, or applications, the state franchise fee shall be applied only to the gross revenue, as defined in subdivision (d), attributable to video service. Where the holder of a state franchise or any affiliate bundles, integrates, ties, or combines video services with nonvideo services creating a bundled package, so that subscribers pay a single fee for more than one class of service or receive a discount on video services, gross revenues shall be determined based on an equal allocation of the package discount, that is, the total price of the individual classes of service at advertised rates compared to the package price, among all classes of service comprising the package. The holder’s offering a bundled package shall not be deemed a promotional activity. If the holder of a state franchise does not offer any component of the bundled package separately, the holder of a state franchise shall declare a stated retail value for each component based on reasonable comparable prices for the product or service for the purpose of determining franchise fees based on the package discount.

(g) For the purposes of determining gross revenue under this division, a video service provider shall use the same method of determining revenues under generally accepted accounting principals as that which the video service provider uses in determining revenues for the purpose of reporting to national and state regulatory agencies.

(h) The state franchise fee shall be remitted to the applicable local entity quarterly, within 45 days after the end of the quarter for that calendar quarter. Each payment shall be accompanied by a summary explaining the basis for the calculation of the state franchise fee. If the holder does not pay the franchise fee when due, the holder shall pay a late payment charge at a rate per year equal to the highest prime lending rate during the period of delinquency, plus 1 percent. If the holder has overpaid the franchise fee, it may deduct the overpayment from its next quarterly payment.

(i) Not more than once annually, a local entity may examine the business records of a holder of a state franchise to the extent reasonably necessary to ensure compensation in accordance with this section. The holder shall keep all business records reflecting any gross revenues, even if there is a change in ownership, for at least four years after those revenues are recognized by the holder on its books and records. If the examination discloses that the holder has underpaid franchise fees by more than 5 percent during the examination period, the holder shall pay all of the reasonable and actual costs of the examination. If the examination discloses that the holder has not underpaid franchise fees, the local entity shall pay all of the reasonable and actual costs of the examination. In every other instance, each party shall bear its own costs of the examination. Any claims by a local entity that compensation is not in accordance with subdivision (a), and any claims for refunds or other corrections to the remittance of the holder of a state franchise, shall be made within three years and 45 days of the end of the quarter for which compensation is remitted, or three years from the date of the remittance, whichever is later. Either a local entity or the holder may, in the event of a dispute concerning compensation under this section, bring an action in a court of competent jurisdiction.

(j) The holder of a state franchise may identify and collect the amount of the state franchise fee as a separate line item on the regular bill of each subscriber.

history: (History: Amended by Stats. 2007, Ch. 123, Sec. 5. Effective January 1, 2008.)


citation: PUC § 5870

text:
(a) The holder of a state franchise shall designate a sufficient amount of capacity on its network to allow the provision of the same number of public, educational, and governmental access (PEG) channels, as are activated and provided by the incumbent cable operator that has simultaneously activated and provided the greatest number of PEG channels within the local entity under the terms of any franchise in effect in the local entity as of January 1, 2007. For the purposes of this section, a PEG channel is deemed activated if it is being utilized for PEG programming within the local entity’s jurisdiction for at least eight hours per day. The holder shall have three months from the date the local entity requests the PEG channels to designate the capacity. However, the three-month period shall be tolled by any period during which the designation or provision of PEG channel capacity is technically infeasible, including any failure or delay of the incumbent cable operator to make adequate interconnection available, as required by this section.

(b) The PEG channels shall be for the exclusive use of the local entity or its designee to provide public, educational, and governmental channels. The PEG channels shall be used only for noncommercial purposes. However, advertising, underwriting, or sponsorship recognition may be carried on the channels for the purpose of funding PEG-related activities. The PEG channels shall all be carried on the basic service tier. To the extent feasible, the PEG channels shall not be separated numerically from other channels carried on the basic service tier and the channel numbers for the PEG channels shall be the same channel numbers used by the incumbent cable operator unless prohibited by federal law. After the initial designation of PEG channel numbers, the channel numbers shall not be changed without the agreement of the local entity unless the change is required by federal law. Each channel shall be capable of carrying a National Television System Committee (NTSC) television signal.

(c) (1) If less than three PEG channels are activated and provided within the local entity as of January 1, 2007, a local entity whose jurisdiction lies within the authorized service area of the holder of a state franchise may initially request the holder to designate not more than a total of three PEG channels.

(2) The holder shall have three months from the date of the request to designate the capacity. However, the three-month period shall be tolled by any period during which the designation or provision of PEG channel capacity is technically infeasible, including any failure or delay of the incumbent cable operator to make adequate interconnection available, as required by this section.

(d) (1) The holder shall provide an additional PEG channel when the nonduplicated locally produced video programming televised on a given channel exceeds 56 hours per week as measured on a quarterly basis. The additional channel shall not be used for any purpose other than to continue programming additional government, education, or public access television.

(2) For the purposes of this section, “locally produced video programming” means programming produced or provided by any local resident, the local entity, or any local public or private agency that provides services to residents of the franchise area; or any transmission of a meeting or proceeding of any local, state, or federal governmental entity.

(e) Any PEG channel provided pursuant to this section that is not utilized by the local entity for at least eight hours per day as measured on a quarterly basis may no longer be made available to the local entity, and may be programmed at the holder’s discretion. At the time that the local entity can certify to the holder a schedule for at least eight hours of daily programming, the holder of the state franchise shall restore the channel or channels for the use of the local entity.

(f) The content to be provided over the PEG channel capacity provided pursuant to this section shall be the responsibility of the local entity or its designee receiving the benefit of that capacity, and the holder of a state franchise bears only the responsibility for the transmission of that content, subject to technological restraints.

(g) (1) The local entity shall ensure that all transmissions, content, or programming to be transmitted by a holder of a state franchise are provided or submitted in a manner or form that is compatible with the holder’s network, if the local entity produces or maintains the PEG programming in that manner or form. If the local entity does not produce or maintain PEG programming in that manner or form, then the local entity may submit or provide PEG programming in a manner or form that is standard in the industry. The holder shall be responsible for any changes in the form of the transmission necessary to make it compatible with the technology or protocol utilized by the holder to deliver services. If the holder is required to change the form of the transmission, the local entity shall permit the holder to do so in a manner that is most economical to the holder.

(2) The provision of those transmissions, content, or programming to the holder of a state franchise shall constitute authorization for the holder to carry those transmissions, content, or programming. The holder may carry the transmission, content, or programming outside of the local entity’s jurisdiction if the holder agrees to pay the local entity or its designee any incremental licensing costs incurred by the local entity or its designee associated with that transmission. A local entity shall not enter into a licensing agreement that imposes higher proportional costs for transmission to subscribers outside the local entity’s jurisdiction.

(3) The PEG signal shall be receivable by all subscribers, whether they receive digital or analog service, or a combination thereof, without the need for any equipment other than the equipment necessary to receive the lowest cost tier of service. The PEG access capacity provided shall be of similar quality and functionality to that offered by commercial channels on the lowest cost tier of service unless the signal is provided to the holder at a lower quality or with less functionality.

(h) Where technically feasible, the holder of a state franchise and an incumbent cable operator shall negotiate in good faith to interconnect their networks for the purpose of providing PEG programming. Interconnection may be accomplished by direct cable, microwave link, satellite, or other reasonable method of connection. Holders of a state franchise and incumbent cable operators shall provide interconnection of the PEG channels on reasonable terms and conditions and may not withhold the interconnection. If a holder of a state franchise and an incumbent cable operator cannot reach a mutually acceptable interconnection agreement, the local entity may require the incumbent cable operator to allow the holder to interconnect its network with the incumbent’s network at a technically feasible point on the holder’s network as identified by the holder. If no technically feasible point for interconnection is available, the holder of a state franchise shall make an interconnection available to the channel originator and shall provide the facilities necessary for the interconnection. The cost of any interconnection shall be borne by the holder requesting the interconnection unless otherwise agreed to by the parties.

(i) A holder of a state franchise shall not be required to interconnect for, or otherwise to transmit, PEG content that is branded with the logo, name, or other identifying marks of another cable operator or video service provider. For purposes of this section, PEG content is not branded if it includes only production credits or other similar information displayed at the conclusion of a program. The local entity may require a cable operator or video service provider to remove its logo, name, or other identifying marks from PEG content that is to be made available through interconnection to another provider of PEG capacity.

(j) In addition to any provision for the PEG channels required under subdivisions (a) to (i), inclusive, the holder shall reserve, designate, and, upon request, activate a channel for carriage of state public affairs programming administered by the state.

(k) All obligations to provide and support PEG channel facilities and institutional networks and to provide cable services to community buildings contained in a locally issued franchise existing on December 31, 2006, shall continue until the local franchise expires, until the term of the franchise would have expired if it had not been terminated pursuant to subdivision (o) of Section 5840, or until January 1, 2009, whichever is later.

(l) After January 1, 2007, and until the expiration of the incumbent cable operator’s franchise, if the incumbent cable operator has existing unsatisfied obligations under the franchise to remit to the local entity any cash payments for the ongoing costs of public, educational, and government access channel facilities or institutional networks, the local entity shall divide those cash payments among all cable or video providers as provided in this section. The fee shall be the holder’s pro rata per subscriber share of the cash payment required to be paid by the incumbent cable operator to the local entity for the costs of PEG channel facilities. All video service providers and the incumbent cable operator shall be subject to the same requirements for recurring payments for the support of PEG channel facilities and institutional networks, whether expressed as a percentage of gross revenue or as an amount per subscriber, per month, or otherwise.

(m) In determining the fee described in subdivision (l) on a pro rata per subscriber basis, all cable and video service providers shall report, for the period in question, to the local entity the total number of subscribers served within the local entity’s jurisdiction, which shall be treated as confidential by the local entity and shall be used only to derive the per subscriber fee required by this section. The local entity shall then determine the payment due from each provider based on a per subscriber basis for the period by multiplying the unsatisfied cash payments for the ongoing capital costs of PEG channel facilities by a ratio of the reported subscribers of each provider to the total subscribers within the local entity as of the end of the period. The local entity shall notify the respective providers, in writing, of the resulting pro rata amount. After the notice, any fees required by this section shall be remitted to the applicable local entity quarterly, within 45 days after the end of the quarter for the preceding calendar quarter, and may only be used by the local entity as authorized under federal law.

(n) A local entity may, by ordinance, establish a fee to support PEG channel facilities consistent with federal law that would become effective subsequent to the expiration of any fee imposed pursuant to subdivision (l). If no such fee exists, the local entity may establish the fee at any time. The fee shall not exceed 1 percent of the holder’s gross revenues, as defined in Section 5860. Notwithstanding this limitation, if, on December 31, 2006, a local entity is imposing a separate fee to support PEG channel facilities that is in excess of 1 percent, that entity may, by ordinance, establish a fee no greater than that separate fee, and in no event greater than 3 percent, to support PEG activities. The ordinance shall expire, and may be reauthorized, upon the expiration of the state franchise.

(o) The holder of a state franchise may recover the amount of any fee remitted to a local entity under this section by billing a recovery fee as a separate line item on the regular bill of each subscriber.

(p) A court of competent jurisdiction shall have exclusive jurisdiction to enforce any requirement under this section or resolve any dispute regarding the requirements set forth in this section, and no provider may be barred from the provision of service or be required to terminate service as a result of that dispute or enforcement action.

history: (History: Amended by Stats. 2007, Ch. 123, Sec. 6. Effective January 1, 2008.)


citation: PUC § 5880

text: Holders of state franchises shall comply with the Emergency Alert System requirements of the Federal Communications Commission in order that emergency messages may be distributed over the holder’s network. Any provision in a locally issued franchise authorizing local entities to provide local emergency notifications shall remain in effect, and shall apply to all holders of a state-issued franchise in the same local area, for the duration of the locally issued franchise, until the term of the franchise would have expired were the franchise not terminated pursuant to subdivision (o) of Section 5840, or until January 1, 2009, whichever is later.

history: (History: Amended by Stats. 2007, Ch. 123, Sec. 7. Effective January 1, 2008.)


citation: PUC § 5885

text:
(a) The local entity shall allow the holder of a state franchise under this division to install, construct, and maintain a network within public rights-of-way under the same time, place, and manner as the provisions governing telephone corporations under applicable state and federal law, including, but not limited to, the provisions of Section 7901.1.

(b) Nothing in this division shall be construed to change existing law regarding the permitting process or compliance with the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resources Code) for projects by a holder of a state franchise.

(c) (1) For purposes of this section, an “encroachment permit” means any permit issued by a local entity relating to construction or operation of facilities pursuant to this division.

(2) A local entity shall either approve or deny an application from a holder of a state franchise for an encroachment permit within 60 days of receiving a completed application. An application for an encroachment permit is complete when the applicant has complied with all statutory requirements, including the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resources Code).

(3) If the local entity denies an application for an encroachment permit, it shall, at the time of notifying the applicant of the denial, furnish to the applicant a detailed explanation of the reason for the denial.

(4) The local entity shall adopt regulations prescribing procedures for an applicant to appeal the denial of an encroachment permit application issued by a department of the local entity to the governing body of the local entity.

(5) Nothing in this section precludes an applicant and a local entity from mutually agreeing to an extension of any time limit provided by this section.

(d) A local entity may not enforce against the holder of a state franchise any rule, regulation, or ordinance that purports to allow the local entity to purchase or force the sale of a network.

history: (History: Added by Stats. 2006, Ch. 700, Sec. 3. Effective January 1, 2007.)


citation: PUC § 5890

text:
(a) A cable operator or video service provider that has been granted a state franchise under this division may not discriminate against or deny access to service to any group of potential residential subscribers because of the income of the residents in the local area in which the group resides.

(b) Holders or their affiliates with more than 1,000,000 telephone customers in California satisfy subdivision (a) if all of the following conditions are met:

(1) Within three years after it begins providing video service under this division, at least 25 percent of households with access to the holder’s video service are low-income households.

(2) Within five years after it begins providing video service under this division and continuing thereafter, at least 30 percent of the households with access to the holder’s video service are low-income households.

(3) Holders provide service to community centers in underserved areas, as determined by the holder, without charge, at a ratio of one community center for every 10,000 video subscribers. The holder shall not be required to take its facilities beyond the appropriate demarcation point outside the community center building or perform any inside wiring. The community center may not receive service from more than one state franchise holder at a time under this section. For purposes of this section, “community center” means any facility operated by an organization that has qualified for the California Teleconnect Fund, as established in Section 280 and that will make the holder’s service available to the community.

(c) Holders or their affiliates with fewer than 1,000,000 telephone customers in California satisfy this section if they offer video service to all customers within their telephone service area within a reasonable time, as determined by the commission. However, the commission shall not require the holder to offer video service if the cost to provide video service is substantially above the average cost of providing video service in that telephone service area.

(d) When a holder provides video service outside of its telephone service area, is not a telephone corporation, or offers video service in an area where no other video service is being offered, other than direct-to-home satellite service, there is a rebuttable presumption that discrimination in providing service has not occurred within those areas. The commission may review the holder’s proposed video service area to ensure that the area is not drawn in a discriminatory manner.

(e) For holders or their affiliates with more than 1,000,000 telephone customers in California, either of the following shall apply:

(1) If the holder is predominantly deploying fiber optic facilities to the customer’s premise, the holder shall provide access to its video service to a number of households at least equal to 25 percent of the customer households in the holder’s telephone service area within two years after it begins providing video service under this division, and to a number at least equal to 40 percent of those households within five years.

(2) If the holder is not predominantly deploying fiber optic facilities to the customer’s premises, the holder shall provide access to its video service to a number of households at least equal to 35 percent of the households in the holder’s telephone service area within three years after it begins providing video service under this division, and to a number at least equal to 50 percent of these households within five years.

(3) A holder shall not be required to meet the 40-percent requirement in paragraph (1) or the 50-percent requirement in paragraph (2) until two years after at least 30 percent of the households with access to the holder’s video service subscribe to it for six consecutive months.

(4) If 30 percent of the households with access to the holder’s video service have not subscribed to the holder’s video service for six consecutive months within three years after it begins providing video service, the holder may submit validating documentation to the commission. If the commission finds that the documentation validates the holder’s claim, then the commission shall permit a delay in meeting the 40-percent requirement in paragraph (1) or the 50-percent requirement in paragraph (2) until the time that the holder does provide service to 30 percent of the households for six consecutive months.

(f) (1) After two years of providing service under this division, the holder may apply to the state franchising authority for an extension to meet the requirements of subdivision (b), (c), or (e). Notice of this application shall also be provided to the telephone customers of the holder, the Secretary of the Senate, and the Chief Clerk of the Assembly.

(2) Upon application, the franchising authority shall hold public hearings in the telephone service area of the applicant.

(3) In reviewing the failure to satisfy the obligations contained in subdivision (b), (c), or (e), the franchising authority shall consider factors that are beyond the control of the holder, including, but not limited to, the following:

(A) The ability of the holder to obtain access to rights-of-way under reasonable terms and conditions.

(B) The degree to which developments or buildings are not subject to competition because of existing exclusive arrangements.

(C) The degree to which developments or buildings are inaccessible using reasonable technical solutions under commercially reasonable terms and conditions.

(D) Natural disasters.

(4) The franchising authority may grant the extension only if the holder has made substantial and continuous effort to meet the requirements of subdivision (b), (c), or (e). If an extension is granted the franchising authority shall establish a new compliance deadline.

(g) Local governments may bring complaints to the state franchising authority that a holder is not offering video service as required by this section, or the state franchising authority may open an investigation on its own motion. The state franchising authority shall hold public hearings before issuing a decision. The commission may suspend or revoke the franchise if the holder fails to comply with the provisions of this division.

(h) If the state franchising authority finds that the holder is in violation of this section, it may, in addition to any other remedies provided by law, impose a fine not to exceed 1 percent of the holder’s total monthly gross revenue received from provision of video service in the state each month from the date of the decision until the date that compliance is achieved.

(i) If a court finds that the holder of the state franchise is in violation of this section, the court may immediately terminate the holder’s state franchise, and the court shall, in addition to any other remedies provided by law, impose a fine not to exceed 1 percent of the holder’s total gross revenue of its entire cable and service footprint in the state in the full calendar month immediately prior to the decision.

(j) As used in this section, the following definitions shall apply:

(1) “Access” means that the holder is capable of providing video service at the household address using any technology, other than direct-to-home satellite service, providing two-way broadband Internet capability and video programming, content, and functionality, regardless of whether any customer has ordered service or whether the owner or landlord or other responsible person has granted access to the household. If more than one technology is utilized, the technologies shall provide similar two-way broadband Internet accessibility and similar video programming.

(2) “Customer’s household” means those residential households located within the holder’s existing telephone service area that are customers of the service by which that telephone service area is defined.

(3) “Household” means, consistent with the United States Census Bureau, a house, an apartment, a mobilehome, a group of rooms, or a single room that is intended for occupancy as separate living quarters. Separate living quarters are those in which the occupants live and eat separately from any other persons in the building and which have direct access from the outside of the building or through a common hall.

(4) “Low-income household” means those residential households located within the holder’s existing telephone service area where the average annual household income is less than thirty-five thousand dollars ($35,000) based on the United States Census Bureau estimates adjusted annually to reflect rates of change and distribution through January 1, 2007.

(k) Nothing in this section shall be construed to require a holder to provide video service outside its wireline footprint or to match the existing service area of any cable operator.

history: (History: Amended by Stats. 2007, Ch. 123, Sec. 8. Effective January 1, 2008.)


citation: PUC § 5895

text:
(a) The commission shall collect granular data on the actual locations served by the holder of a state franchise.

(b) The commission shall adopt customer service requirements for a holder of a state franchise and adjudicate any customer complaints.

(c) The commission shall not publicly disclose any personally identifiable information collected pursuant to this section.

(d) All information submitted to the commission pursuant to this section shall be disclosed to the public only as provided for pursuant to Section 583.

(e) For purposes of this section, “actual locations” include addresses.

history: (History: Amended by Stats. 2022, Ch. 801, Sec. 2. (AB 2752) Effective January 1, 2023.)


citation: PUC § 5900

text:
(a) The holder of a state franchise shall comply with Sections 53055, 53055.1, 53055.2, and 53088.2 of the Government Code, and any other customer service standards pertaining to the provision of video service established by federal law or regulation or adopted by subsequent enactment of the Legislature. All customer service and consumer protection standards under this section shall be interpreted and applied to accommodate newer or different technologies while meeting or exceeding the goals of the standards.

(b) The holder of a state franchise shall comply with Section 637.5 of the Penal Code and the privacy standards contained in Section 551 and following of Title 47 of the United States Code.

(c) The local entity shall enforce all of the customer service and protection standards of this section with respect to complaints received from residents within the local entity’s jurisdiction, but it may not adopt or seek to enforce any additional or different customer service or other performance standards under Section 53055.3 or subdivision (q), (r), or (s) of Section 53088.2 of the Government Code, or any other law.

(d) The local entity shall, by ordinance or resolution, provide a schedule of penalties for any material breach by a holder of a state franchise of this section. A monetary penalty shall not be assessed for a material breach if it is out of the reasonable control of the holder. Further, a monetary penalty shall not be imposed before January 1, 2007. Any schedule of monetary penalties adopted pursuant to this section shall not exceed five hundred dollars ($500) for each day of each material breach, not to exceed one thousand five hundred dollars ($1,500) for each occurrence of a material breach. However, if a material breach of this section has occurred, and the local entity has provided notice and a fine or penalty has been assessed, and if a subsequent material breach of the same nature occurs within 12 months, the penalties may be increased by the local entity to a maximum of one thousand dollars ($1,000) for each day of each material breach, not to exceed three thousand dollars ($3,000) for each occurrence of the material breach. If a third or further material breach of the same nature occurs within those same 12 months, and the local entity has provided notice and a fine or penalty has been assessed, the penalties may be increased to a maximum of two thousand five hundred dollars ($2,500) for each day of each material breach, not to exceed seven thousand five hundred dollars ($7,500) for each occurrence of the material breach. With respect to video providers subject to a franchise or license, any monetary penalties assessed under this section shall be reduced dollar-for-dollar to the extent any liquidated damage or penalty provision of a current cable television ordinance, franchise contract, or license agreement imposes a monetary obligation upon a video provider for the same customer service failures, and no other monetary damages may be assessed.

(e) The local entity shall give the video service provider written notice of any alleged material breach of the customer service standards of this division and allow the video provider at least 30 days from receipt of the notice to remedy the specified material breach.

(f) A material breach for purposes of assessing penalties shall be deemed to have occurred for each day within the jurisdiction of each local entity, following the expiration of the period specified in subdivision (e), that any material breach has not been remedied by the video service provider, irrespective of the number of customers or subscribers affected.

(g) Any penalty assessed pursuant to this section shall be remitted to the local entity, which shall submit one-half of the penalty to the Digital Divide Account established in Section 280.5.

(h) Any interested person may seek judicial review of a decision of the local entity in a court of appropriate jurisdiction. For this purpose, a court of law shall conduct a de novo review of any issues presented.

(i) This section shall not preclude a party affected by this section from using any judicial remedy available to that party without regard to this section. Actions taken by a local legislative body, including a local franchising entity, pursuant to this section shall not be binding on a court of law. For this purpose, a court of law shall conduct de novo review of any issues presented.

(j) For purposes of this section, “material breach” means any substantial and repeated failure of a video service provider to comply with service quality and other standards specified in subdivision (a).

(k) The Public Advocate’s Office of the Public Utilities Commission may advocate on behalf of video subscribers regarding renewal of a state-issued franchise and enforcement of this section, and Sections 5890 and 5950. For this purpose, the office shall have access to any information in the possession of the commission subject to all restrictions on disclosure of that information that are applicable to the commission.

history: (History: Amended by Stats. 2023, Ch. 131, Sec. 201. (AB 1754) Effective January 1, 2024.)


citation: PUC § 5910

text:
(a) The holder of a state franchise shall perform background checks of applicants for employment, according to current business practices.

(b) A background check equivalent to that performed by the holder shall also be conducted on all of the following:

(1) Persons hired by a holder under a personal service contract.

(2) Independent contractors and their employees.

(3) Vendors and their employees.

(c) Independent contractors and vendors shall certify that they have obtained the background checks required pursuant to subdivision (b), and shall make the background checks available to the holder upon request.

(d) Except as otherwise provided by contract, the holder of a state franchise shall not be responsible for administering the background checks and shall not assume the costs of the background checks of individuals who are not applicants for employment of the holder.

(e) (1) Subdivision (a) only applies to applicants for employment for positions that would allow the applicant to have direct contact with or access to the holder’s network, central office, or subscriber premises, and perform activities that involve the installation, service, or repair of the holder’s network or equipment.

(2) Subdivision (b) only applies to persons that have direct contact with or access to the holder’s network, central office, or subscriber premises, and perform activities that involve the installation, service, or repair of the holder’s network or equipment.

(f) This section does not apply to temporary workers performing emergency functions to restore the network of a holder to its normal state in the event of a natural disaster or an emergency that threatens or results in the loss of service.

history: (History: Amended by Stats. 2007, Ch. 123, Sec. 10. Effective January 1, 2008.)


citation: PUC § 5920

text:
A holder of a state franchise employing more than 750 total employees in California shall annually report to the commission all of the following:

(a) The number of California residents employed by the holder, calculated on a full-time or full-time equivalent basis.

(b) The percentage of the holder’s total domestic workforce, calculated on a full-time or full-time equivalent basis.

(c) The types and numbers of jobs by occupational classification held by residents of California employed by holders of state franchises and the average pay and benefits of those jobs and, separately, the number of out-of-state residents employed by independent contractors, companies, and consultants hired by the holder, calculated on a full-time or full-time equivalent basis, when the holder is not contractually prohibited from disclosing the information to the public. This paragraph applies only to those employees of an independent contractor, company, or consultant that are personally providing services to the holder, and does not apply to employees of an independent contractor, company, or consultant not personally performing services for the holder.

(d) The number of net new positions proposed to be created directly by the holder of a state franchise during the upcoming year by occupational classifications and by category of full-time, part-time, temporary, and contract employees.

history: (History: Amended by Stats. 2015, Ch. 612, Sec. 64. (SB 697) Effective January 1, 2016.)


citation: PUC § 5930

text:
(a) Notwithstanding any other provision of this division, any video service provider that currently holds a franchise with a local franchising entity in a county that is a party, either alone or in conjunction with any other local franchising entity located in that county, to a stipulation and consent judgment executed by the parties thereto and approved by a federal district court shall neither be entitled to seek a state franchise in any area of that county, including any unincorporated area and any incorporated city of that county, nor abrogate any existing franchise before July 1, 2014. Prior to July 1, 2014, the video service provider shall continue to be exclusively governed by any existing franchise with a local franchising entity for the term of that franchise and any and all issues relating to renewal, transfer, or otherwise in relation to that franchise shall be resolved pursuant to that existing franchise and otherwise applicable federal and local law. This subdivision shall not be deemed to extend any existing franchise beyond its term.

(b) When an incumbent cable operator is providing service under an expired franchise or a franchise that expires before January 2, 2008, the local entity may extend that franchise on the same terms and conditions through January 2, 2008. A state franchise issued to any incumbent cable operator shall not become operative prior to January 2, 2008.

(c) When a video service provider that holds a state franchise provides the notice required pursuant to subdivision (n) of Section 5840 to a local entity, the local franchising entity may require all incumbent cable operators to seek a state franchise and shall terminate the franchise issued by the local franchising entity when the commission issues a state franchise for the video service provider that includes the entire service area served by the video service provider and the video service provider notifies the local entity that it will begin providing video service in that area under a state franchise.

history: (History: Amended by Stats. 2007, Ch. 123, Sec. 11. Effective January 1, 2008.)


citation: PUC § 5940

text: The holder of a state franchise under this division who also provides stand-alone, residential, primary line, basic telephone service shall not increase this rate to finance the cost of deploying a network to provide video service.


citation: PUC § 5950

text: The commission shall not permit a telephone corporation that is providing video service directly or through its affiliates pursuant to a state-issued franchise as an incumbent local exchange carrier to increase rates for residential, primary line, basic telephone service above the rate as of July 1, 2006, until January 1, 2009, unless that telephone corporation is regulated under rate of return regulation. However, the commission may allow rate increases to reflect increases in inflation as shown in the Consumer Price Index published by the Bureau of Labor Statistics. This section does not affect the authority of the commission to authorize an increase in rates for basic telephone service that is bundled with other services and priced as a bundle. Nothing in this section is intended to prohibit implementation of commission decision D. 06-04-071 to the extent it has not been implemented prior to July 1, 2006.


citation: PUC § 5970

text:
Subject to the requirements of this division, a state franchise may be transferred to any successor in interest of the holder to which the certificate originally is granted, whether this transfer is by merger, sale, assignment, bankruptcy, restructuring, or any other type of transaction, provided that the following conditions are met:

(a) The transferee submits to the commission all of the information required by this division of an applicant.

(b) The transferee agrees that any collective bargaining agreement entered into by a video service provider shall continue to be honored, paid, or performed to the same extent as would be required if the video service provider continued to operate under its franchise for the duration of that franchise unless the duration of that agreement is limited by its terms or by federal or state law.


citation: PUC § 6001

text:
Every franchise or privilege to erect or lay telegraph or telephone wires, to construct or operate street or interurban railroads upon any public street or highway, to lay gas pipes for the purpose of carrying gas for light, heat, or power, to erect poles or wires for transmitting electricity for light, heat, or power, along or upon any public street or highway, or to exercise any other privilege whatever proposed to be granted by the governing or legislative body of any county, city and county, or city shall be granted upon the conditions in this article provided, and not otherwise, except when such franchises are granted pursuant to Chapters 2 or 3 of this division.

This article does not apply to franchises or privileges for railroads, or telegraph or telephone lines doing an interstate business, or to renewals of franchises for piers, chutes, or wharves, or to community antenna television systems, or to franchises or privileges for purposes not involving the furnishing of any service or commodity to the public or any portion thereof.

history: (History: Amended by Stats. 1968, Ch. 173.)

chapter: 1. Franchise Provisions in General

article: 1. Manner of Granting

path: 3. PUBLIC UTILITY FRANCHISES BY LOCAL GOVERNMENTS > 1. Franchise Provisions in General > 1. Manner of Granting


text:
(a) All franchises, licenses, permits, or other privileges granted to a public utility by any city, county, or city and county holding a freeholder’s charter, to use, or to construct, or lay and use, under, along, across, or upon the public streets, ways, alleys, and places within the municipality, facilities which are part of a pipeline system transmitting oil or products thereof, shall be granted upon the terms and conditions provided in, and in accordance with, this chapter or Chapter 2 (commencing with Section 6201).

(b) It is the intent of the Legislature, in enacting this section, to preempt the ordinance of any chartered municipality insofar as that ordinance governs the granting of franchises to construct facilities which are part of a pipeline system transmitting oil or other products thereof.

history: (History: Added by Stats. 1989, Ch. 1444, Sec. 2.)

division: 3. PUBLIC UTILITY FRANCHISES BY LOCAL GOVERNMENTS

article: 1. Manner of Granting


citation: PUC § 6002

text: The grantor may, in such a franchise, impose such other and additional terms and conditions not in conflict with this article, whether governmental or contractual in character, as in the judgment of the legislative body thereof are to the public interest.

history: (History: Enacted by Stats. 1951, Ch. 764.)

article: 1. Manner of Granting


citation: PUC § 6003

text: No clause or condition of any kind shall be inserted in any franchise or grant offered or sold under the terms of this article which shall directly or indirectly restrict free and open competition in bidding therefor, and no clause or provision shall be inserted in any franchise offered for sale, which shall in anywise favor one person, firm, or corporation, as against another, in bidding for the purchase thereof.

article: 1. Manner of Granting


citation: PUC § 6004

text: An applicant for a franchise or privilege shall file with the governing or legislative body of the county or municipality an application, and thereupon that body shall, in its discretion, advertise the fact of the application, together with a statement that it is proposed to grant the franchise or privilege, in one or more newpapers of the county, city and county, or city wherein the franchise or privilege is to be exercised.

article: 1. Manner of Granting


citation: PUC § 6005

text: The advertisement shall state that bids will be received for the franchise and that it will be awarded to the highest bidder. The advertisement shall be published once a day for 10 successive days, or as often during that period as the paper is published, if it is a daily newspaper. If there is no daily newspaper published in the county, city and county, or city, it shall be published in a weekly newspaper once a week for four successive weeks. In either case the full publication shall be completed not less than 20 nor more than 30 days before any further action can be taken thereon.

article: 1. Manner of Granting


citation: PUC § 6006

text: The publication shall state the character of the franchise or privilege proposed to be granted, the term for which it is granted, and, if it is for a street railroad, the route to be traversed; that sealed bids therefor will be received up to a certain hour and day named therein, and that the successful bidder and his assigns shall during the life of the franchise pay to the county or municipality two percent (2%) of the gross annual receipts of the grantee arising from the use, operation, or possession of the franchise.

article: 1. Manner of Granting


citation: PUC § 6007

text: The advertisement shall also contain a statement that the franchise will be struck off, sold, and awarded to the person, firm, or corporation making the highest cash bid therefor; that at the time of the opening of the bids any responsible person, firm, or corporation present or represented may bid for the franchise or privilege a sum not less than 10 percent above the highest sealed bid therefor, and the bid so made may be raised not less than 10 percent by any other responsible bidder and the bidding may so continue until the franchise is finally struck off, sold, and awarded to the highest bidder therefor in lawful money of the United States.

article: 1. Manner of Granting


citation: PUC § 6008

text: Each sealed bid shall be accompanied with cash or a certified check payable to the treasurer of the county or municipality for the full amount of the bid, and no sealed bid shall be considered unless the cash or check is enclosed therewith. The successful bidder shall deposit at least 10 percent of the amount of his bid with the clerk of the county or municipality before the franchise is struck off to him. If he fails to make the deposit immediately his bid shall not be received, and is void, and the franchise shall then and there be again offered for sale to the bidder who makes the highest cash bid therefor, subject to the same conditions as to deposit. This procedure shall be had until the franchise is struck off, sold, and awarded to a bidder who makes the necessary deposit of at least 10 percent of the amount of his bid.

article: 1. Manner of Granting


citation: PUC § 6009

text: The successful bidder shall deposit with the clerk of the county or municipality, within 24 hours of the acceptance of his bid, the remaining 90 percent of the amount thereof. If the bidder fails to deposit with the clerk of the county or municipality the remaining 90 percent of his bid within 24 hours after its acceptance, the award to him of the franchise shall be set aside, the deposit made by him shall be forfeited, and no further proceedings for a sale of the franchise shall be had unless it is readvertised and again offered for sale in the manner provided in this article.

article: 1. Manner of Granting


citation: PUC § 6010

text:
(a) The advertisement may also contain a statement that the successful bidder for any franchise or privilege struck off, sold, and awarded under this article shall file a bond running to the county, city and county, or city, approved by the governing body. The advertisement may require a bond executed by an admitted surety insurer. The bond shall be in a penal sum prescribed by the governing body and set forth in the advertisement for bids, and conditioned that the bidder shall well and truly observe, fulfill, and perform each term and condition of the franchise, and that in case of any breach of condition of the bond, the whole amount of the penal sum therein named shall be deemed to be liquidated damages.

(b) The bond if required shall be filed with the governing body within the time specified in the advertisement and if no time is specified within five days after the franchise is awarded. The franchise shall be granted by ordinance to the person, firm, or corporation to whom it has been struck off, sold or awarded. If the bond is not filed within the time required, the award of the franchise may be set aside at any time prior to the filing and, if set aside, any money paid for the franchise shall be forfeited, and if an ordinance has been enacted granting the franchise, the governing or legislative body may repeal the ordinance and the franchise shall, in the discretion of the governing or legislative body, be readvertised and again offered for sale in the same manner and under the same restrictions, as provided in this article.

history: (History: Amended by Stats. 1982, Ch. 517, Sec. 357.)

article: 1. Manner of Granting


text: Notwithstanding any other provision of this article, any franchise heretofore or hereafter granted shall not be invalid or subject to revocation because the bond required by law at the time of the award of such franchise shall not have been filed within the time then prescribed, provided the bond is filed prior to the setting aside of the award or, as the case may be, the repeal of the ordinance granting such franchise.

history: (History: Added by Stats. 1955, Ch. 286.)

article: 1. Manner of Granting


citation: PUC § 6011

text: If the franchise is a renewal of a right already in existence, payment of the percentage of gross receipts shall begin at once upon the granting of the franchise. If the franchise is not a renewal of a right already in existence, no percentage shall be paid for the first five (5) years succeeding the date of the franchise, but thereafter the percentage shall be payable annually. If payment is not made, the franchise shall be forfeited.

article: 1. Manner of Granting


citation: PUC § 6012

text: If the franchise granted is an extension of an existing street railroad system, the gross receipts shall be estimated to be one-half of the proportion of the total gross receipts of the system which the mileage of this extension bears to the total mileage of the whole system. This estimate is conclusive as to the amount of the gross receipts of the extension.

article: 1. Manner of Granting


citation: PUC § 6013

text: Work to erect or lay telegraph or telephone wires, to construct street or interurban railroads, to lay gas pipes for the purpose of carrying gas for light, heat, or power, to erect poles or wires for transmitting electricity for light, heat, or power, along or upon any public street or highway, or to exercise any other privilege whatever, a franchise for which has been granted pursuant to this article, shall be commenced in good faith within not more than four months from the granting of the franchise. If not so commenced the franchise shall be declared forfeited.

article: 1. Manner of Granting


citation: PUC § 6014

text: Work to construct street or interurban railroads shall be completed within not more than three years from the granting of the franchise, and if not so completed the franchise shall be forfeited. For good cause shown, the governing or legislative body may by resolution extend the time for completion, not exceeding three months.

article: 1. Manner of Granting


citation: PUC § 6015

text: Work under any franchise other than for a street or interurban railroad shall be prosecuted diligently and in good faith so as to meet and fill the reasonable needs of the inhabitants of the territory for the service of which the franchise is granted.

article: 1. Manner of Granting


citation: PUC § 6016

text: The Attorney General, upon the complaint of any county or municipality, or, in his discretion, upon the complaint of any taxpayer, shall sue for the forfeiture of any franchise granted under this article, for the noncompliance with any condition thereof.

article: 1. Manner of Granting


citation: PUC § 6017

text: Any member of a governing or legislative body of any county, city and county, or city, who, by his vote, violates or attempts to violate any of the provisions of this article is guilty of a misdemeanor and may be punished therefor as provided by law, and may be deprived of his office by the decree of a court of competent jurisdiction, after trial and conviction.

article: 1. Manner of Granting


citation: PUC § 6041

text: In all cases where application is made to the governing or legislative body of a city or city and county for permission and authority to lay railroad tracks through streets or public highways of any city or city and county, the authorities before granting such permission and authority, in addition to the terms and restrictions which they are by law authorized to impose shall exact and require from the persons or corporation asking such permission and authority, as a condition precedent to the granting of permission, a satisfactory promise and undertaking to permit and allow mail carriers in the employ of the United States Government, at all times while engaged in the actual discharge of duty, to ride on the cars of such railroad without paying any sum of money whatever for fare or otherwise. All such permissions and franchises shall be subject to all other provisions of the laws of this State applicable to street railroads in general, and subject to regulations from city or city and county authorities.

article: 2. Transportation of Mail Carriers

path: 3. PUBLIC UTILITY FRANCHISES BY LOCAL GOVERNMENTS > 1. Franchise Provisions in General > 2. Transportation of Mail Carriers


citation: PUC § 6091

text: All cities and cities and counties are empowered to grant franchises for the laying of pipes in the streets, roads, avenues, alleys, and public highways therein, for carrying steam heat under high pressure to be used, distributed, and sold to the inhabitants thereof for heating purposes.

article: 4. Steam Heat Franchises

path: 3. PUBLIC UTILITY FRANCHISES BY LOCAL GOVERNMENTS > 1. Franchise Provisions in General > 4. Steam Heat Franchises


citation: PUC § 6092

text: The granting of franchises under this article shall be pursuant to Article 1 of this chapter.

article: 4. Steam Heat Franchises


citation: PUC § 6201

text: This chapter may be cited as the Franchise Act of 1937.

history: (History: Enacted by Stats. 1951, Ch. 674.)

article: 1. General Provisions

path: 3. PUBLIC UTILITY FRANCHISES BY LOCAL GOVERNMENTS > 2. Gas, Oil, Electric, and Water Franchises by Municipalities > 1. General Provisions


text: As used in this chapter, “industrial gas” means any substance which is in a gaseous state at ambient conditions of temperature and pressure used for commercial, industrial, or scientific purposes, but does not include any gaseous hydrocarbon used for light, heat, power, or feedstock.

history: (History: Added by Stats. 1984, Ch. 197, Sec. 1.)

chapter: 2. Gas, Oil, Electric, and Water Franchises by Municipalities

article: 1. General Provisions


text: As used in this chapter, municipality includes counties, but no county shall grant a franchise pursuant to this chapter in any incorporated area.

history: (History: Added by Stats. 1971, Ch. 422.)

article: 1. General Provisions


citation: PUC § 6202

text: The legislative body of any municipality may grant a franchise to any person, firm, or corporation, whether operating under an existing franchise or not, to use, or to construct and use, poles, wires, conduits, and appurtenances for transmitting and distributing electricity for all purposes, or to use, or to lay and use, pipes and appurtenances for transmitting and distributing gas or industrial gas for all purposes, or to use, or to lay and use, pipes and appurtenances for transmitting and distributing oil or products thereof for all purposes, or to lay and use pipes, ditches, flumes, conduits, and appurtenances for transmitting and distributing water for all purposes, under, along, across, or upon the public streets, ways, alleys, and places within the municipality, upon the terms and conditions provided in this chapter.

history: (History: Amended by Stats. 1984, Ch. 197, Sec. 2.)

article: 1. General Provisions


citation: PUC § 6203

text: The legislative body may in such a franchise impose such other and additional terms and conditions not in conflict with this chapter, whether governmental or contractual in character, as in the judgment of the legislative body are to the public interest.

article: 1. General Provisions


citation: PUC § 6204

text: This chapter provides a procedure, alternative to the procedure provided in Article 1 of Chapter 1 of this division, for the granting of franchises by municipalities. When any proceeding is initiated under this chapter for the granting of a franchise, the provisions of this chapter exclusively govern the granting of such franchise.

article: 1. General Provisions


citation: PUC § 6205

text: This chapter does not apply to any municipality having a freeholders’ charter adopted and ratified under the Constitution and having in such charter provisions for the issuance of franchises by the municipality, but nothing contained in this chapter shall restrict the right of any such chartered municipality to avail itself of the provisions of this chapter wherever it may lawfully do so. The provisions of this chapter relating to the payment of a percentage of gross receipts shall not be construed as a declaration of legislative judgment as to the proper compensation to be paid a chartered municipality for the right to exercise franchise privileges therein.

article: 1. General Provisions


text:
(a) Notwithstanding Section 6205, all franchises, licenses, permits, or other privileges granted to a public utility by any city, county, or city and county holding a freeholder’s charter containing provisions for the issuance of franchises, to use, or to construct or lay and use, under, along, across, or upon the public streets, ways, alleys, and places within the municipality, facilities which are part of a pipeline system transmitting oil or products thereof, shall be granted upon the terms and conditions provided in, and in accordance with, either this chapter or Chapter 1 (commencing with Section 6001).

(b) On and after January 1, 1990, the compensation to be paid for the franchises, licenses, permits, or other privileges granted by any city, county, or city and county, including those holding a freeholder’s charter, shall be as provided in Section 6231.5.

(c) It is the intent of the Legislature, in enacting this section, to preempt the ordinance of any chartered municipality insofar as that ordinance governs the granting of franchises to construct facilities which are part of a pipeline system transmitting oil or products thereof.

history: (History: Added by Stats. 1989, Ch. 1444, Sec. 3.)

article: 1. General Provisions


citation: PUC § 6231

text:
An applicant for a franchise shall file with the legislative body of the municipality in which the franchise is desired an application stating all of the following:

(a) The name of the applicant.

(b) The purpose and term, whether definite or indeterminate, for which the franchise is desired.

(c) That the applicant if granted the franchise will pay to the municipality during the life of the franchise 2 percent of the applicant’s gross annual receipts arising from the use, operation, or possession of the franchise, except that this payment shall be not less than 1 percent of the applicant’s gross annual receipts derived from the sale within the limits of the municipality of the utility service for which the franchise is awarded. If the application is for a franchise complementary to a franchise derived under Section 19 of Article XI of the California Constitution as that section existed prior to its amendment on October 10, 1911, then the applicant shall pay annually, if the application is for an electric franchise, 2 percent of the applicant’s gross annual receipts arising from the use, operation, or possession of the franchise, except that this payment shall be not less than one-half of 1 percent of the applicant’s gross annual receipts from the sale of electricity within the limits of the municipality under both the electric franchises; or, if the application is for a gas, oil pipeline, or water franchise, 2 percent of the applicant’s gross annual receipts arising from the use, operation, or possession of the franchise, except that this payment shall be not less than 1 percent of the gross annual receipts from the sale of gas or water within the limits of the municipality under both the gas franchises or both the water franchises.

Notwithstanding any other provision of this section, if the application is for a franchise for a nonpublic utility pipeline for industrial gas or oil or products thereof, the application shall state that the applicant, if granted the franchise, will pay to the municipality during the life of the franchise either a specified percentage agreed to by the applicant and the municipality of the gross annual receipts of the applicant arising from the use, operation, or possession of the franchise or an annual franchise fee in an amount agreed to by the applicant and the municipality or an annual franchise fee computed by multiplying the sum of one-half cent ($0.005) times the nominal internal diameter of the pipe, expressed in inches, times the number of lineal feet of the pipe within the public streets, ways, alleys, or other public places within the municipality.

history: (History: Amended by Stats. 1984, Ch. 197, Sec. 3.)

article: 2. Manner of Granting

path: 3. PUBLIC UTILITY FRANCHISES BY LOCAL GOVERNMENTS > 2. Gas, Oil, Electric, and Water Franchises by Municipalities > 2. Manner of Granting


text:
(a) An applicant for a franchise to build and operate a pipeline system transmitting oil or products thereof shall file with the legislative body of the municipality in which the franchise is desired an application stating all of the following:

(1) The name of the applicant.

(2) The purpose and term, whether definite or indeterminate, for which the franchise is desired.

(3) That the applicant, if granted the franchise, permit, license, or other privilege, will pay to the municipality an annual fee computed as follows:

The length of pipe expressed in feet located within the franchised area shall be multiplied by the applicable base rate, as adjusted pursuant to subdivision (d), in accordance with the following schedule:Pipe size (internalBase ratediameter in inches)per lineal foot 0–4$0.088 60.132 80.176100.220120.264140.308160.352180.396200.440220.484240.528260.572280.616300.660For pipelines with an internal diameter not listed above, the fees shall be in the same proportion to the fees of a 12-inch-diameter pipe as the diameter of the unlisted pipe is to 12 inches.

(b) The annual payment for each lineal foot of pipeline shall be computed and revised each calendar year as follows:

(1) The applicable base rate shall be multiplied by the Consumer Price Index for the area, as published by the United States Department of Labor, Office of Information for the month of September immediately preceding the month in which payment is due and payable, and divided by the Consumer Price Index for June 30, 1989, which is declared to be 100.0. Under no circumstances shall the multiplying factor be less than one.

(2) If the United States Department of Labor, Office of Information discontinues the preparation or publication of a Consumer Price Index for the area, and if no translation table prepared by the Department of Labor is available so as to make those statistics which are then available applicable to the index of June 30, 1989, the municipality shall prescribe a rate of payment which shall, in its judgment, vary from the rates specified in this section in approximate proportion as commodity consumer prices then current vary from commodity consumer prices current in December 1988. On this point, the determination by the municipality shall be final and conclusive.

(c) No fee paid to any municipality pursuant to a franchise, permit, license, or other privilege issued under an ordinance which is in effect on September 1, 1989, which exceeds the fee computed under this section shall be reduced. On or after January 1, 1990, a municipality may collect an additional amount which represents the percentage increase in the Consumer Price Index for the area during the preceding calendar year applied to that fee. The formula used in arriving at that fee shall be applicable to any replacement, modification, or extension of the pipeline. Upon expiration of a franchise, permit, license, or other privilege, the municipality may renew or extend the franchise, permit, license, or other privilege, using the local formula contained in an ordinance which is in effect on September 1, 1989. However, the fee shall not exceed the greater of the fee actually paid on September 1, 1989, or the fee computed pursuant to this section.

(d) Notwithstanding any other provision of law, until January 1, 1990, a municipality which is involved in eminent domain proceedings in which a court order for possession has been issued relating to an easement for a pipeline system transmitting oil or products thereof may adopt an ordinance setting its fee without following the provisions of this section. Upon expiration of the ordinance, the municipality may renew or extend the franchise, license, permit, or other privilege, utilizing the local formula in effect on January 1, 1990, or the fee computed pursuant to this section, whichever is greater.

(e) Notwithstanding any other provision of this section, if the application is for a franchise for a nonpublic utility pipeline for industrial gas or oil or products thereof, the application shall state that the applicant, if granted the franchise, will pay to the municipality during the life of the franchise either of the following:

(1) A specified percentage agreed to by the applicant and the municipality of the gross annual receipts of the applicant arising from the use, operation, or possession of the franchise.

(2) An annual franchise fee in an amount agreed to by the applicant and the municipality, or an annual franchise fee computed by multiplying the sum of one-half of the nominal internal diameter of the pipe, expressed in inches, by the number of lineal feet of the pipe within the public streets, ways, alleys, or other public places within the municipality.

(f) Any nonpublic utility pipeline system transmitting oil or products thereof covered by subdivision (e) on December 31, 1989, that converts to public utility status shall continue to pay the fee established pursuant to subdivision (e) for the remaining term of its franchise, license, permit, or other privilege. Upon expiration of its franchise, license, permit, or other privilege, a nonpublic utility pipeline system transmitting oil or products thereof that has converted or seeks to convert to public utility status shall establish to the satisfaction of the franchising authority all of the following:

(1) Its property is dedicated to the service of the public.

(2) Its rates for transportation are established pursuant to tariffs filed with the Public Utilities Commission.

(3) Its accounts and records are established pursuant to rules and regulations adopted by the commission.

(4) It has filed an appropriate annual report with the commission.

(5) Its rates for transportation are just, reasonable, and nondiscriminatory, as evidenced either by an order of the commission approving those rates, or an application for approval of its rates that is pending with the commission.

history: (History: Added by Stats. 1989, Ch. 1444, Sec. 4.)

article: 2. Manner of Granting


citation: PUC § 6232

text:
Upon receipt of the application the legislative body of the municipality may pass its resolution declaring its intention to grant the franchise applied for, stating the character of the franchise, setting forth a notice of the day, hour, and place when and where all persons having any objection to the granting thereof may appear before the legislative body and be heard thereon, and directing the clerk of the legislative body to publish the notice at least once within fifteen (15) days after the passage of the resolution in a newspaper of general circulation within the municipality.

The time fixed for the hearing shall be not less than twenty (20) nor more than sixty (60) days after the date of the passage of the resolution.

article: 2. Manner of Granting


citation: PUC § 6233

text: The notice of the time and place of hearing objections shall state that the grantee of the franchise and its successors and assigns will, during the life of its franchise, pay to the municipality the percentage specified in its application, that the percentage will be paid annually from the date of the granting of the franchise, and in the event such payment is not made the franchise will be forfeited. The notice shall also designate the term, whether definite or indeterminate, for which the franchise is proposed to be granted.

article: 2. Manner of Granting


citation: PUC § 6234

text:
At any time not later than the hour set for the hearing of objections, any person interested may make written protest stating objections against the granting of the franchise. The protest shall be signed by the protestant and be delivered to the clerk of the legislative body. At the time set for hearing objections the legislative body shall proceed to hear and pass upon all protests so made and its decision shall be final and conclusive, subject to the right of referendum of the people. The legislative body may adjourn the hearing from time to time.

If no protest in writing is delivered to the clerk up to the hour set for hearing, or such protests as are filed have been heard and determined by the legislative body to be insufficient, or have been overruled or denied, the legislative body may grant the franchise. The franchise shall be granted by ordinance adopted in the manner prescribed by law for the enactment of ordinances by the granting body.

article: 2. Manner of Granting


citation: PUC § 6235

text: A franchise granted under this chapter does not become effective until the grantee files written acceptance thereof with the clerk of the granting municipality. When so filed the acceptance constitutes a continuing agreement by the grantee that if and when the granting municipality thereafter annexes, or consolidates with, additional territory, all franchises, rights and privileges owned by the grantee therein, except a franchise derived under Section 19 of Article XI of the Constitution as that section existed prior to the amendment thereof adopted October 10, 1911, shall be deemed abandoned within the limits of the additional territory.

article: 2. Manner of Granting


citation: PUC § 6261

text: Any franchise granted under this chapter with respect to a given utility service is in lieu of all other franchises, rights, or privileges owned by the grantee, or by any successor of the grantee to any rights under the franchise, for transmitting and distributing the utility service within the limits of the municipality as such limits exist at the time of the granting of the franchise or as they may thereafter exist except any franchise derived under Section 19 of Article XI of the Constitution as that section existed prior to the amendment thereof adopted October 10, 1911. The acceptance of any such franchise granted under this chapter shall operate as an abandonment of all such franchises, rights, and privileges within the limits of such municipality as such limits at any time exist, in lieu of which the franchise is granted under this chapter.

article: 3. Scope of Franchise

path: 3. PUBLIC UTILITY FRANCHISES BY LOCAL GOVERNMENTS > 2. Gas, Oil, Electric, and Water Franchises by Municipalities > 3. Scope of Franchise


citation: PUC § 6262

text: No franchise granted under this chapter in any way impairs or affects the right of the granting municipality to acquire the property of the grantee by purchase or condemnation, and nothing contained in such a franchise shall be construed to contract away, modify or abridge either for a term or in perpetuity the municipality’s right of eminent domain in respect to any public utility.

article: 3. Scope of Franchise