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THE CITY OF O ■ CITY COUNCIL AGENDA REPORT pLEASANTONe October 19, 2010 Economic Development TITLE: CONSIDER ADOPTION OF AN ORDINANCE IMPLEMENTING THE STATE DIGITAL INFRASTRUCTURE AND VIDEO COMPETITION ACT (DIVCA) BY ADDING A NEW CHAPTER 6.54, STATE VIDEO FRANCHISES, TO THE PLEASANTON MUNICIPAL CODE, WHICH WILL INCLUDE A FRANCHISE FEE OF 5% AND A PUBLIC, EDUCATIONAL, AND GOVERNMENTAL (PEG) FEE OF 1% SUMMARY The City has historically regulated cable television providers which use the right -of -way in Pleasanton. The City's current cable franchise agreement imposes: a 5% franchise fee paid from the cable provider's gross cable revenues; and fee of 50¢ per month per subscriber for public, educational, and governmental (PEG) support. These fees are provided by the cable television provider(s) to the City on a quarterly basis; the franchise fee goes to the City's general fund and the subscriber fee is passed through to Tri- Valley Community Television to host public, educational and governmental programming. With state law now preempting the video field and granting state franchises, the City is authorized to adopt an ordinance to regulate such state video franchises in order to collect a 5% franchise fee and a 1% PEG fee, set monetary penalties for failure to comply with state customer service standards, and maintain local control over public rights -of -way. RECOMMENDATION Introduce the proposed ordinance to add a new Chapter 6.54 State Video Franchises to the Municipal Code, which will include a 5% franchise fee and 1% PEG fee for state franchise holders operating in Pleasanton, set penalties for violations of state customer service standards, and reaffirm encroachment permit requirements. FINANCIAL STATEMENT Adoption of the proposed ordinance would result in the City collecting the maximum amount of revenue to support public, educational and governmental (PEG) channels permitted by law. This change will not impact the amount of cable franchise fees currently collected for the City's General Fund, although it will effectively double the amount of PEG revenue currently collected by the City for Tri - Valley Community Television. Thus, there is no material impact to the City's General Fund.