Section § 5800

Explanation

This law is called the Digital Infrastructure and Video Competition Act of 2006. It's the official name for this set of regulations.

This act shall be known and may be cited as the Digital Infrastructure and Video Competition Act of 2006.

Section § 5810

Explanation

This law emphasizes the importance of increasing competition in video and broadband services across California. It highlights the benefits such as more choices for consumers, lower prices, and enhanced technological deployment. The state plans to create a system where service providers can easily offer video, voice, and broadband services throughout the state.

Key principles include fair competition among service providers, ensuring access to advanced cable and video services, protecting local government revenues and public spaces, and adherence to consumer protection laws. Additionally, it emphasizes maintaining public access channels, supporting broadband infrastructure investments, and sustaining the authority of the California Public Utilities Commission.

The law also mandates video service providers to pay local governments for using public spaces and ensures that any new video service franchise respects existing labor agreements. Furthermore, the revenue model should ensure local governments continue receiving the same level of revenue from franchise fees.

(a)CA Public Utilities Code § 5810(a) The Legislature finds and declares all of the following:
(1)CA Public Utilities Code § 5810(a)(1) Increasing competition for video and broadband services is a matter of statewide concern for all of the following reasons:
(A)CA Public Utilities Code § 5810(a)(1)(A) Video and cable services provide numerous benefits to all Californians including access to a variety of news, public information, education, and entertainment programming.
(B)CA Public Utilities Code § 5810(a)(1)(B) Increased competition in the cable and video service sector provides consumers with more choice, lowers prices, speeds the deployment of new communication and broadband technologies, creates jobs, and benefits the California economy.
(C)CA Public Utilities Code § 5810(a)(1)(C) To promote competition, the state should establish a state-issued franchise authorization process that allows market participants to use their networks and systems to provide video, voice, and broadband services to all residents of the state.
(D)CA Public Utilities Code § 5810(a)(1)(D) Competition for video service should increase opportunities for programming that appeals to California’s diverse population and many cultural communities.
(2)CA Public Utilities Code § 5810(a)(2) Legislation to develop this new process should adhere to the following principles:
(A)CA Public Utilities Code § 5810(a)(2)(A) Create a fair and level playing field for all market competitors that does not disadvantage or advantage one service provider or technology over another.
(B)CA Public Utilities Code § 5810(a)(2)(B) Promote the widespread access to the most technologically advanced cable and video services to all California communities in a nondiscriminatory manner regardless of socioeconomic status.
(C)CA Public Utilities Code § 5810(a)(2)(C) Protect local government revenues and control of public rights-of-way.
(D)CA Public Utilities Code § 5810(a)(2)(D) Require market participants to comply with all applicable consumer protection laws.
(E)CA Public Utilities Code § 5810(a)(2)(E) Complement efforts to increase investment in broadband infrastructure and close the digital divide.
(F)CA Public Utilities Code § 5810(a)(2)(F) Continue access to and maintenance of the public, education, and government (PEG) channels.
(G)CA Public Utilities Code § 5810(a)(2)(G) Maintain all existing authority of the California Public Utilities Commission as established in state and federal statutes.
(3)CA Public Utilities Code § 5810(a)(3) The public interest is best served when sufficient funds are appropriated to the commission to provide adequate staff and resources to appropriately and timely process applications of video service providers and to ensure full compliance with the requirements of this division. It is the intent of the Legislature that, although video service providers are not public utilities or common carriers, the commission shall collect any fees authorized by this division in the same manner and under the same terms as it collects fees from common carriers, electrical corporations, gas corporations, telephone corporations, telegraph corporations, water corporations, and every other public utility providing service directly to customers or subscribers subject to its jurisdiction such that it does not discriminate against video service providers or their subscribers.
(4)CA Public Utilities Code § 5810(a)(4) Providing an incumbent cable operator the option to secure a state-issued franchise through the preemption of an existing cable franchise between a cable operator and any political subdivision of the state, including, but not limited to, a charter city, county, or city and county, is an essential element of the new regulatory framework established by this act as a matter of statewide concern to best ensure equal protection and parity among providers and technologies, as well as to achieve the goals stated by the Legislature in enacting this act.
(b)CA Public Utilities Code § 5810(b) It is the intent of the Legislature that a video service provider shall pay as rent a franchise fee to the local entity in whose jurisdiction service is being provided for the continued use of streets, public facilities, and other rights-of-way of the local entity in order to provide service. The Legislature recognizes that local entities should be compensated for the use of the public rights-of-way and that the franchise fee is intended to compensate them in the form of rent or a toll, similar to that which the court found to be appropriate in Santa Barbara County Taxpayers Association v. Board of Supervisors for the County of Santa Barbara (1989) 209 Cal. App. 3d 940.
(c)CA Public Utilities Code § 5810(c) It is the intent of the Legislature that collective bargaining agreements be respected.
(d)CA Public Utilities Code § 5810(d) It is the intent of the Legislature that the definition of gross revenues in this division shall result in local entities maintaining their existing level of revenue from franchise fees.

Section § 5820

Explanation

This law states that holding a state-issued franchise does not guarantee a permanent right to the current franchise terms, meaning the state can change them. Telephone or video service providers must still comply with state and federal environmental laws, with local entities leading environmental reviews and potentially imposing conditions to lessen environmental impact. Also, franchises providing video services are not considered public utilities, and the law doesn't allow the commission to control video service rates or terms unless specifically stated in this division.

(a)CA Public Utilities Code § 5820(a) Nothing in this division shall be deemed as creating a vested right in a state-issued franchise by the franchise holder or its affiliates that would preclude the state from amending the provisions that establish the terms and conditions of a franchise.
(b)CA Public Utilities Code § 5820(b) Nothing in this division shall be construed to eliminate or reduce a telephone corporation’s or video service provider’s obligations under any applicable state or federal environmental protection laws. The local entity shall serve as the lead agency for any environmental review under this division and may impose conditions to mitigate environmental impacts of the applicant’s use of the public rights-of-way that may be required pursuant to the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resources Code).
(c)CA Public Utilities Code § 5820(c) The holder of a state franchise shall not be deemed a public utility as a result of providing video service under this division. This division shall not be construed as granting authority to the commission to regulate the rates, terms, and conditions of video services, except as explicitly set forth in this division.

Section § 5830

Explanation

This section defines key terms related to providing cable and video services, essential for understanding the rules and regulations for those services in California.

'Broadband' refers to any service classified by the FCC as such. A 'cable operator' is someone who owns or manages a cable system. 'Cable service' and 'cable system' definitions are set by federal law. 'Franchise' is the right to build a network providing video services, and a 'franchise fee' is associated with this right.

'Holder' is a person issued a state franchise, allowing them to provide services within public rights-of-way. Local authorities, termed 'local franchising entities,' can regulate and collect fees from cable operators. 'Video service' includes various programming services delivered through networks situated in public areas.

Other terms like 'network,' 'open-video system' (OVS), and 'public rights-of-way' specify components and areas involved in video service delivery. 'Subscriber' is someone who pays for these services, while the 'video service provider' is the entity delivering these services.

For purposes of this division, the following words have the following meanings:
(a)CA Public Utilities Code § 5830(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)CA Public Utilities Code § 5830(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)CA Public Utilities Code § 5830(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)CA Public Utilities Code § 5830(d) “Cable system” is defined as set forth in Section 522(7) of Title 47 of the United States Code.
(e)CA Public Utilities Code § 5830(e) “Commission” means the Public Utilities Commission.
(f)CA Public Utilities Code § 5830(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)CA Public Utilities Code § 5830(g) “Franchise fee” means the fee adopted pursuant to Section 5840.
(h)CA Public Utilities Code § 5830(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)CA Public Utilities Code § 5830(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)CA Public Utilities Code § 5830(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)CA Public Utilities Code § 5830(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)CA Public Utilities Code § 5830(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)CA Public Utilities Code § 5830(m) “Open-video system” or “OVS” means those services set forth in Section 573 of Title 47 of the United States Code.
(n)CA Public Utilities Code § 5830(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)CA Public Utilities Code § 5830(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)CA Public Utilities Code § 5830(p) “State franchise” means a franchise that is issued pursuant to this division.
(q)CA Public Utilities Code § 5830(q) “Subscriber” means a person who lawfully receives video service from the holder of a state franchise for a fee.
(r)CA Public Utilities Code § 5830(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)CA Public Utilities Code § 5830(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)CA Public Utilities Code § 5830(t) “Video service provider” means an entity providing video service.

Section § 5840

Explanation

This law gives the California Public Utilities Commission the authority to issue state franchises for video service providers, making it the sole franchising body. Applicants must apply to the commission, paying fees only to cover application costs. To qualify for a franchise, providers must adhere to service and consumer protection laws. They must also submit detailed applications including service area descriptions and company qualifications. Providers cannot operate without a franchise, and the franchise can transfer to successors or be terminated with proper notice. The franchise fee is set at 5% of gross revenues, potentially less if a local entity dictates. All franchises in an area are subject to the same fee structure, although different rules apply if a local entity owns the network used by the provider.

(a)CA Public Utilities Code § 5840(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)CA Public Utilities Code § 5840(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)CA Public Utilities Code § 5840(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)CA Public Utilities Code § 5840(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)CA Public Utilities Code § 5840(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)CA Public Utilities Code § 5840(e)(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)CA Public Utilities Code § 5840(e)(1)(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)CA Public Utilities Code § 5840(e)(1)(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)CA Public Utilities Code § 5840(e)(1)(B)(i) A statement that the applicant will not discriminate in the provision of video or cable services as provided in Section 5890.
(ii)CA Public Utilities Code § 5840(e)(1)(B)(ii) A statement that the applicant will abide by all applicable consumer protection laws and rules as provided in Section 5900.
(iii)CA Public Utilities Code § 5840(e)(1)(B)(iii) A statement that the applicant will remit the fee required by subdivision (a) of Section 5860 to the local entity.
(iv)CA Public Utilities Code § 5840(e)(1)(B)(iv) A statement that the applicant will provide PEG channels and the required funding as required by Section 5870.
(C)CA Public Utilities Code § 5840(e)(1)(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)CA Public Utilities Code § 5840(e)(1)(D) That the applicant will concurrently deliver a copy of the application to any local entity where the applicant will provide service.
(2)CA Public Utilities Code § 5840(e)(2) The applicant’s legal name and any name under which the applicant does or will do business in this state.
(3)CA Public Utilities Code § 5840(e)(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)CA Public Utilities Code § 5840(e)(4) The names and titles of the applicant’s principal officers.
(5)CA Public Utilities Code § 5840(e)(5) The legal name, address, and telephone number of the applicant’s parent company, if any.
(6)CA Public Utilities Code § 5840(e)(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)CA Public Utilities Code § 5840(e)(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)CA Public Utilities Code § 5840(e)(8) The expected date for the deployment of video service in each of the areas identified in paragraph (6).
(9)CA Public Utilities Code § 5840(e)(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)CA Public Utilities Code § 5840(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)CA Public Utilities Code § 5840(g) The commission shall commence accepting applications for a state franchise no later than April 1, 2007.
(h)Copy CA Public Utilities Code § 5840(h)
(1)Copy CA Public Utilities Code § 5840(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)CA Public Utilities Code § 5840(h)(2) If the commission finds the application is complete, it shall issue a state franchise before the 14th calendar day after that finding.
(3)CA Public Utilities Code § 5840(h)(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)CA Public Utilities Code § 5840(h)(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)CA Public Utilities Code § 5840(i) The state franchise issued by the commission shall contain all of the following:
(1)CA Public Utilities Code § 5840(i)(1) A grant of authority to provide video service in the service area footprint as requested in the application.
(2)CA Public Utilities Code § 5840(i)(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)CA Public Utilities Code § 5840(i)(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)CA Public Utilities Code § 5840(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)CA Public Utilities Code § 5840(k) It is unlawful to provide video service without a state or locally issued franchise.
(l)CA Public Utilities Code § 5840(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)CA Public Utilities Code § 5840(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)CA Public Utilities Code § 5840(m)(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)CA Public Utilities Code § 5840(m)(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)CA Public Utilities Code § 5840(m)(2)(A) The proposed amendment to the state franchise.
(B)CA Public Utilities Code § 5840(m)(2)(B) The certificate of assumed business name.
(3)CA Public Utilities Code § 5840(m)(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)CA Public Utilities Code § 5840(m)(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)CA Public Utilities Code § 5840(m)(5) The termination of any state franchise issued under this division. The holder shall identify both of the following:
(A)CA Public Utilities Code § 5840(m)(5)(A) The number of subscribers in the service area covered by the state franchise being terminated.
(B)CA Public Utilities Code § 5840(m)(5)(B) The method by which the holder’s subscribers were notified of the termination.
(6)CA Public Utilities Code § 5840(m)(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)CA Public Utilities Code § 5840(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)CA Public Utilities Code § 5840(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)CA Public Utilities Code § 5840(o)(1) The expiration, prior to any renewal or extension, of its local franchise.
(2)CA Public Utilities Code § 5840(o)(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)CA Public Utilities Code § 5840(o)(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)CA Public Utilities Code § 5840(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)Copy CA Public Utilities Code § 5840(q)
(1)Copy CA Public Utilities Code § 5840(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)Copy CA Public Utilities Code § 5840(q)(2)
(A)Copy CA Public Utilities Code § 5840(q)(2)(A) The state franchise fee shall apply equally to all video service providers in the local entity’s jurisdiction.
(B)CA Public Utilities Code § 5840(q)(2)(A)(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.

Section § 5850

Explanation

If a company with a state-issued license to provide video services in California wants to continue doing so beyond 10 years, it must apply to renew the license for another 10-year term. The renewal process follows specific criteria set out in a different section and can't be changed by the state commission. Any violations of court orders might prevent the renewal from being approved. The whole process needs to line up with federal laws, too.

(a)CA Public Utilities Code § 5850(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)CA Public Utilities Code § 5850(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)CA Public Utilities Code § 5850(c) Renewal of a state franchise shall be consistent with federal law and regulations.
(d)CA Public Utilities Code § 5850(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.

Section § 5860

Explanation

This law states that companies holding a state franchise to provide video services must pay a franchise fee to local governments based on their revenue from these services. The fee calculation is based on 'gross revenues,' which includes the money they receive from subscribers for video services, equipment rentals, and certain advertising and promotional income. However, some types of income, like bad debt and refunds, are not included. These payments are made quarterly, and if late, additional charges apply. Local governments have the right to review the company's records to ensure the fees are correctly paid, and they can settle disputes in court if necessary. Companies can list these fees separately on customer bills.

(a)CA Public Utilities Code § 5860(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)CA Public Utilities Code § 5860(b) The state franchise fee shall be a percentage of the holder’s gross revenues, as defined in subdivision (d).
(c)CA Public Utilities Code § 5860(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)CA Public Utilities Code § 5860(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)CA Public Utilities Code § 5860(d)(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)CA Public Utilities Code § 5860(d)(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)CA Public Utilities Code § 5860(d)(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)CA Public Utilities Code § 5860(d)(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)CA Public Utilities Code § 5860(e) For purposes of this section, the term “gross revenue” set forth in subdivision (d) does not include any of the following:
(1)CA Public Utilities Code § 5860(e)(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)CA Public Utilities Code § 5860(e)(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)CA Public Utilities Code § 5860(e)(2)(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)CA Public Utilities Code § 5860(e)(2)(B) The revenue is not otherwise subject to fees to be paid to the local entity.
(3)CA Public Utilities Code § 5860(e)(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)CA Public Utilities Code § 5860(e)(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)CA Public Utilities Code § 5860(e)(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)CA Public Utilities Code § 5860(e)(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)CA Public Utilities Code § 5860(e)(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)CA Public Utilities Code § 5860(e)(8) Revenue from directory or Internet advertising revenue, including, but not limited to, yellow pages, white pages, banner advertisement, and electronic publishing.
(9)CA Public Utilities Code § 5860(e)(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)CA Public Utilities Code § 5860(e)(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)CA Public Utilities Code § 5860(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)CA Public Utilities Code § 5860(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)CA Public Utilities Code § 5860(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)CA Public Utilities Code § 5860(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)CA Public Utilities Code § 5860(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.

Section § 5870

Explanation

This law outlines the responsibilities of state franchise holders in California regarding public, educational, and governmental (PEG) access channels. Franchise holders must provide the same number of PEG channels as the local cable operator with the most channels as of January 1, 2007, with a time frame for compliance. These channels must be used exclusively for noncommercial purposes, though they may generate funding through advertising and sponsorships.

PEG channels should be on the same basic service tier as commercial channels, and their use is measured quarterly. A local entity can request up to three PEG channels if fewer were available in 2007. An extra channel can be added based on local programming volume. If a PEG channel isn’t used for 8 hours daily, the franchise holder can repurpose it until usage increases.

The local entity manages PEG content, and the franchise holder is only responsible for transmission. Franchise holders aren't obligated to carry PEG content branded with competitor information. Fees for supporting PEG channels can be imposed, and franchise holders can pass these fees to subscribers. Courts are responsible for resolving disputes under this law section.

(a)CA Public Utilities Code § 5870(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)CA Public Utilities Code § 5870(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)Copy CA Public Utilities Code § 5870(c)
(1)Copy CA Public Utilities Code § 5870(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)CA Public Utilities Code § 5870(c)(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)Copy CA Public Utilities Code § 5870(d)
(1)Copy CA Public Utilities Code § 5870(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)CA Public Utilities Code § 5870(d)(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)CA Public Utilities Code § 5870(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)CA Public Utilities Code § 5870(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)Copy CA Public Utilities Code § 5870(g)
(1)Copy CA Public Utilities Code § 5870(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)CA Public Utilities Code § 5870(g)(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)CA Public Utilities Code § 5870(g)(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)CA Public Utilities Code § 5870(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)CA Public Utilities Code § 5870(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)CA Public Utilities Code § 5870(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)CA Public Utilities Code § 5870(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)CA Public Utilities Code § 5870(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)CA Public Utilities Code § 5870(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)CA Public Utilities Code § 5870(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)CA Public Utilities Code § 5870(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)CA Public Utilities Code § 5870(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.

Section § 5880

Explanation

This law requires that companies with state-issued franchises must follow the Federal Communications Commission's rules for the Emergency Alert System. This ensures they can broadcast emergency messages over their networks. Additionally, if there are local franchise agreements that allow for local emergency notifications, they will continue to be valid for their original duration or until the specific date mentioned, which is January 1, 2009, whichever comes later.

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.

Section § 5885

Explanation

This law explains the rules for local entities when dealing with state franchise holders who want to build or maintain networks in public areas. It mandates that these franchises can work under the same rules as telephone companies, ensuring they're not allowed to change existing permit and environmental laws. When applying for a permit, known as an encroachment permit, local entities must decide on the application within 60 days and provide reasons for denial if applicable. There must also be a system for appealing denied applications. Local entities can't enforce rules that would let them buy or force the sale of a franchise's network.

(a)CA Public Utilities Code § 5885(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)CA Public Utilities Code § 5885(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)Copy CA Public Utilities Code § 5885(c)
(1)Copy CA Public Utilities Code § 5885(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)CA Public Utilities Code § 5885(c)(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)CA Public Utilities Code § 5885(c)(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)CA Public Utilities Code § 5885(c)(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)CA Public Utilities Code § 5885(c)(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)CA Public Utilities Code § 5885(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.

Section § 5890

Explanation

This law ensures that cable operators or video service providers with a state franchise cannot deny service to potential customers based on their income. For providers with over 1 million telephone customers in California, they must meet specific thresholds of providing service to low-income households within set timeframes and offer free service to community centers in underserved areas. Providers with fewer customers must extend service within their areas unless it's exceptionally costly. There is a presumption against discrimination if they're the only provider in an area. If providers predominantly use fiber optics, they have additional deployment targets. Providers can apply for deadline extensions for certain requirements if circumstances beyond their control occur. Local governments can report non-compliance, and fines can be imposed for violations. If a court finds a provider in violation, it can terminate their franchise.

(a)CA Public Utilities Code § 5890(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)CA Public Utilities Code § 5890(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)CA Public Utilities Code § 5890(b)(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)CA Public Utilities Code § 5890(b)(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)CA Public Utilities Code § 5890(b)(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)CA Public Utilities Code § 5890(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)CA Public Utilities Code § 5890(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)CA Public Utilities Code § 5890(e) For holders or their affiliates with more than 1,000,000 telephone customers in California, either of the following shall apply:
(1)CA Public Utilities Code § 5890(e)(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)CA Public Utilities Code § 5890(e)(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)CA Public Utilities Code § 5890(e)(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)CA Public Utilities Code § 5890(e)(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)Copy CA Public Utilities Code § 5890(f)
(1)Copy CA Public Utilities Code § 5890(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)CA Public Utilities Code § 5890(f)(2) Upon application, the franchising authority shall hold public hearings in the telephone service area of the applicant.
(3)CA Public Utilities Code § 5890(f)(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)CA Public Utilities Code § 5890(f)(3)(A) The ability of the holder to obtain access to rights-of-way under reasonable terms and conditions.
(B)CA Public Utilities Code § 5890(f)(3)(B) The degree to which developments or buildings are not subject to competition because of existing exclusive arrangements.
(C)CA Public Utilities Code § 5890(f)(3)(C) The degree to which developments or buildings are inaccessible using reasonable technical solutions under commercially reasonable terms and conditions.
(D)CA Public Utilities Code § 5890(f)(3)(D) Natural disasters.
(4)CA Public Utilities Code § 5890(f)(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)CA Public Utilities Code § 5890(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)CA Public Utilities Code § 5890(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)CA Public Utilities Code § 5890(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)CA Public Utilities Code § 5890(j) As used in this section, the following definitions shall apply:
(1)CA Public Utilities Code § 5890(j)(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)CA Public Utilities Code § 5890(j)(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)CA Public Utilities Code § 5890(j)(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)CA Public Utilities Code § 5890(j)(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)CA Public Utilities Code § 5890(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.

Section § 5895

Explanation

This law section requires the commission to gather specific data about where state franchise holders are providing services. They must also set and enforce customer service rules, and handle any related complaints. Importantly, any personal information collected through this process must remain private and not be shared publicly, unless it complies with another legal section (Section 583). Additionally, 'actual locations' means they need to collect address data.

(a)CA Public Utilities Code § 5895(a) The commission shall collect granular data on the actual locations served by the holder of a state franchise.
(b)CA Public Utilities Code § 5895(b) The commission shall adopt customer service requirements for a holder of a state franchise and adjudicate any customer complaints.
(c)CA Public Utilities Code § 5895(c) The commission shall not publicly disclose any personally identifiable information collected pursuant to this section.
(d)CA Public Utilities Code § 5895(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)CA Public Utilities Code § 5895(e) For purposes of this section, “actual locations” include addresses.

Section § 5900

Explanation

This law outlines the obligations of state franchise holders providing video services in terms of customer service and consumer protection. They must adhere to existing and new standards from various legal sources and technology changes. Local entities can enforce these standards but cannot create new ones. Penalties apply for breaches, with increasing fine amounts for repeated violations within a year. However, if multiple financial obligations exist for the same issue, deductions are applied. Providers are notified of breaches and given a month to fix them. Penalties collected are shared with the Digital Divide Account. Individuals can challenge local entity decisions in court, which will review issues afresh. "Material breach" refers to significant, repeated service failures. The Public Advocate’s Office can advocate for video subscribers' rights concerning franchise renewal and this law, having access to relevant information from the commission under privacy rules.

(a)CA Public Utilities Code § 5900(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)CA Public Utilities Code § 5900(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)CA Public Utilities Code § 5900(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)CA Public Utilities Code § 5900(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)CA Public Utilities Code § 5900(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)CA Public Utilities Code § 5900(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)CA Public Utilities Code § 5900(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)CA Public Utilities Code § 5900(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)CA Public Utilities Code § 5900(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)CA Public Utilities Code § 5900(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)CA Public Utilities Code § 5900(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.

Section § 5910

Explanation

This law requires companies holding a state franchise to conduct background checks on job applicants, specifically for roles that involve access to important equipment and locations like networks and subscriber premises. The same background checks must also be done on independent contractors, vendors, and their employees if they have similar access and responsibilities.

These contractors and vendors must confirm they've done these checks and share the results if asked. The franchise holder doesn't have to manage or pay for these checks for non-employees unless agreed otherwise. However, temporary workers fixing emergency issues, like after a natural disaster, are exempt from these checks.

(a)CA Public Utilities Code § 5910(a) The holder of a state franchise shall perform background checks of applicants for employment, according to current business practices.
(b)CA Public Utilities Code § 5910(b) A background check equivalent to that performed by the holder shall also be conducted on all of the following:
(1)CA Public Utilities Code § 5910(b)(1) Persons hired by a holder under a personal service contract.
(2)CA Public Utilities Code § 5910(b)(2) Independent contractors and their employees.
(3)CA Public Utilities Code § 5910(b)(3) Vendors and their employees.
(c)CA Public Utilities Code § 5910(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)CA Public Utilities Code § 5910(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)Copy CA Public Utilities Code § 5910(e)
(1)Copy CA Public Utilities Code § 5910(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)CA Public Utilities Code § 5910(e)(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)CA Public Utilities Code § 5910(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.

Section § 5920

Explanation

This California Public Utilities Code requires companies with state franchises that have over 750 employees in California to provide an annual report to the commission. They must include: the number of full-time equivalent employees who are California residents, the percentage of their domestic workforce, and details about job types and average pay for those residing in California. It also requires information about workers from other states hired through contractors, if allowed. Finally, they must report on new job positions expected in the next year.

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)CA Public Utilities Code § 5920(a) The number of California residents employed by the holder, calculated on a full-time or full-time equivalent basis.
(b)CA Public Utilities Code § 5920(b) The percentage of the holder’s total domestic workforce, calculated on a full-time or full-time equivalent basis.
(c)CA Public Utilities Code § 5920(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)CA Public Utilities Code § 5920(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.

Section § 5930

Explanation

This section outlines rules for video service providers and cable operators in California regarding franchise agreements with local entities. Providers with existing agreements cannot apply for a state franchise or terminate their local franchise before July 1, 2014, in applicable counties with specific court-approved judgments. They must abide by their current agreements until then.

If a cable operator's franchise expired or expires by January 2, 2008, local entities can extend the agreement under its current terms until that date. For incumbents, a state franchise can't start until after January 2, 2008.

When a provider with a state franchise gives notice to local entities, those entities can mandate incumbent cable operators to seek a state franchise. The local agreement will end when a state franchise covers the provider's service area and the provider begins offering state-regulated services.

(a)CA Public Utilities Code § 5930(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)CA Public Utilities Code § 5930(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)CA Public Utilities Code § 5930(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.

Section § 5940

Explanation

If a company has a state franchise and offers basic residential phone service, it cannot raise the rates for these phone services to pay for building a video service network.

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.

Section § 5950

Explanation

This law states that from July 1, 2006, to January 1, 2009, traditional phone companies (acting as local carriers and offering video services) cannot raise rates for basic home phone lines above the rates set on July 1, 2006. However, they can increase rates if adjusted for inflation based on the Consumer Price Index. The rule doesn’t apply to rate hikes for phone service bundled with other services, and it doesn't stop the enforcement of specific commission decisions made before July 1, 2006.

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.

Section § 5970

Explanation

This law allows the transfer of a state franchise, like a license to operate a service, to another party who's taking over from the current holder. This can happen through various means, such as selling, merging, or restructuring, as long as two conditions are met: The new party must provide all required information to the commission, and they must agree to uphold any existing worker agreements, like union deals, just as the original holder would have.

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)CA Public Utilities Code § 5970(a) The transferee submits to the commission all of the information required by this division of an applicant.
(b)CA Public Utilities Code § 5970(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.