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HomeMy WebLinkAbout8464-94 Amending Chapter 7 of the South Bend Service Charges of any Cable Television System ORDINANCE No. 8464-94 Passed by the Common Council of the City of South Bend, Indiana. February 14, 94 — 19 Attest: `' �d"��""""J City Clerk IRENE K. GAMMON Attest: ► ,/� President of Common Council Presented by me to the Mayor of the City of South Bend, Indiana_ February 15, 199 _ City Clerk IRENE K. GAMMON Approved and signed by me 19 C.240&—e.5- Mayor • ORDINANCE NO. t `4 In & q 4 AN ORDINANCE OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AMENDING CHAPTER 7 OF THE SOUTH BEND MUNICIPAL CODE TO PROVIDE FOR THE REGULATION OF BASIC SERVICE TIER RATES AND RELATED EQUIPMENT, INSTALLATION AND SERVICE CHARGES OF ANY CABLE TELEVISION SYSTEM OPERATING IN THE CITY OF SOUTH BEND STATEMENT OF PURPOSE AND INTENT The purpose of this Ordinance is to amend Chapter 7 of the South Bend Municipal Code to implement basic tier rate regulation as authorized by the Cable Television Consumer Protection and Competition Act of 1992 (Act) . As part of the certification process outlined by the Act, the Federal Communications Commission (FCC) requires local franchising authorities to adopt regulations consistent with regulations adopted by the FCC pursuant to 47 U. S .C. Section 543 (b) , and that the procedural laws and regulations applicable to rate regulation proceedings provide a reasonable opportunity for consideration of the views of interested parties . Pursuant to this Ordinance, the City of South Bend, Indiana, by its Board of Public Works, will regulate the rates for the basic tier of cable programming and associated equipment. It provides regulations for initial rate determinations as well as subsequent rate increases . NOW, THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AS FOLLOWS : Section I . Chapter 7 of the South Bend Municipal Code is amended by adding Article II . Cable Television Rate Regulation, to read as follows : ARTICLE II. CABLE TELEVISION RATE REGULATION Sec. 7 .14. Definitions. (a) As used in this chapter: (1) Basic Cable Rates means the monthly charges for a subscription to the basic service tier and the associated equipment . (2) Basic Service Tier means a separately available service tier to which subscription is required for access to any other tier of service, including as a minimum, but not limited to, all must-carry signals, all PEG channels, and all domestic television signals other than superstations . (3) Benchmark means a per channel rate of charge for cable service and associated equipment which the FCC has determined is reasonable . interest in such cable system; or (B) who otherwise controls or is responsible for, through any arrangement, the management and operation of such a cable system. (6) Channel means a unit of cable service identified and selected by a channel number or similar designation. (7) City means the City of South Bend, Indiana. (8) Cost of Service Showing means a filing in which the cable operator attempts to show that the benchmark rate or the price cap is not sufficient to allow the cable operator to fully recover the costs of providing the basic service tier and to continue to attract capital . (9) FCC means the Federal Communications Commission. • (10) Initial Basic Cable Rates means the rates that the cable operator is charging for the basic service tier, including charges for associated equipment, at the time the City notifies the cable operator of the City' s qualification and intent to regulate basic cable rates . (11) Must-Carry Signal means the signal of any local broadcast station (except superstations) which is required to be carried on the basic service tier. (12) PEG Channel means the channel capacity designated for public, educational, or governmental use, and facilities and equipment for the use of that channel capacity. (13) Price Cap means the ceiling set by the FCC on future increases in basic cable rates regulated by the City, based on a formula using the GNP fixed weight price index, reflecting general increases in the cost of doing business and changes in overall inflation. (14) Reasonable Rate Standard means a per channel rate that is at, or below, the benchmark or price cap level . (15) Superstation means any non-local broadcast signal secondarily transmitted by satellite. Sec. 7 .15. Initial Review of Basic Cable Rates. (a) Notice. Upon the adoption of this Ordinance and the certification of the City by the FCC, the City shall immediately notify all cable operators operating pursuant to a franchise from the City, by certified mail, return receipt requested, that the City intends to regulate subscriber rates charged for the basic service tier and associated equipment as authorized by the Cable Act of 1992 . (b) Cable operator response. Within 30 days of receiving notice from the City, a cable operator shall file with the City, its current rates for the basic service tier and associated equipment (initial basic rates) and any supporting material concerning the reasonableness of its rates . (c) Expedited determination and public hearing. (A) hold a public hearing at which interested persons may express their views; and (B) act to approve the rates within 30 days from the date the cable operator filed its basic cable rates with the City. (2) If the Board of Public Works takes no action within 30 days from the date the cable operator filed its basic cable rates with the City, the initial basic rates will continue in effect, until final action is taken, as set forth in Section 7 .15 (d) or 7 . 15 (i) , hereinbelow. (d) Extended review period. (1) If the Board of Public Works is unable to determine whether the rates in issue are within the FCC' s reasonable rate standard based on the material before it, or if the cable operator submits a cost-of-service showing, the Board of Public Works shall, within 30 days from the date the cable operator filed its basic cable rates with the City and by adoption of a formal resolution, invoke the following additional periods of time, as applicable, to make a final determination: (A) 90 days if the Board of Public Works needs more time to ensure that a rate is within the FCC' s reasonable rate standard; or (B) 150 days if the cable operator has submitted a cost-of-service showing seeking to justify a rate above the applicable benchmark. (2) If the Board of Public Works has not made a determination within the 90 or 150 day period, the initial basic cable rates shall remain in effect until final action is taken, as set forth in Section 7 . 15 (i) , hereinbelow. The Board of Public Works shall issue a brief written order at the end of the period requesting the cable operator to keep accurate account of all amounts received by reason of the initial basic rates and on whose behalf the amounts are paid. (e) Public Hearing. During the extended review period and before taking action on the initial basic rates, the Board of Public Works shall hold at least one public hearing at which interested persons may express their views and record objections . (f) Objections. An interested person who wishes to make an objection to the initial basic rates may request the Clerk of the Board of Public Works to record the objection during the public hearing or may submit the objection in writing anytime before the decision resolution is adopted. In order for an objection to be made part of the record, the objector must provide the Clerk of the Board of Public Works with the objector' s name and address . (g) Benchmark analysis. If a cable operator submits its initial basic cable rate schedule as being in compliance with the FCC' s reasonable rate standard, the Board of Public Works shall review the rates using the benchmark analysis in accordance with the standard form authorized by the FCC. Based on the Board of Public Works' findings, the initial basic cable rates shall be established as follows : (1) If the initial basic cable rates are below the benchmark, those rates shall become the initial basic cable rates in the number of channels occurring between September 30, 1992, and the initial date of regulation. (3) If the initial basic cable rates exceed the benchmark, but the cable operator' s per channel rate was below the benchmark on September 30, 1992, the initial basic cable rate shall be the benchmark, adjusted for inflation. (h) Cost-of-service showings. If a cable operator does not wish to reduce the rates to the permitted level, the cable operator shall have the opportunity to submit a cost-of-service showing in an attempt to justify initial basic cable rates above the FCC' s reasonable rate standard. The Board of Public Works will review a cost-of-service submission pursuant to FCC standards for cost-of-service review and rules and regulations promulgated by the Board of Public Works . The Board of Public Works may approve initial basic cable rates above the benchmark if the cable operator makes the necessary showing; however, a cost-of-service determination resulting in rates below the benchmark or below the cable operator' s September 30, 1992, rates minus 10 percent, will prescribe the cable operator' s new rates . (i) Decision. (1) By formal resolution. After completion of its review of the cable operator' s initial basic rates, the Board of Public Works shall adopt its decision by formal resolution. The decision shall include one of the following: (A) If the initial basic rates are within the FCC' s reasonable rate standard or are justified by a cost-of- service analysis, the Board of Public Works shall approve the initial basic cable rates proposed by the cable operator; or (B) If the initial basic rates are not within the FCC' s reasonable rate standard and the cost-of-service analysis, if any, does not justify the initial basic rates, the Board of Public Works shall establish initial basic cable rates that are within the FCC' s reasonable rate standard or that are justified by a cost-of-service analysis . (2) Rollbacks and refunds. If the Board of Public Works determines that the initial basic cable rates as submitted exceed the reasonable rate standard or that the cable operator' s cost-of-service showing justifies lower rates, the Board of Public Works may order the rates reduced in accordance with Paragraph (g) or (h) above, as applicable. In addition, the Board of Public Works may order the cable operator to pay to subscribers, refunds of the excessive portion of the rates with interest (computed at applicable rates published by the Internal Revenue Service for tax refunds and additional tax payments) , retroactive to September 1, 1993 . The method for paying any refund and the interest rate will be in accordance with FCC regulations as directed in the Board of Public Works' decision resolution. (3) Statement of reasons for decision and public notice. If the initial basic rates are disapproved in whole or in part, or if there were objections made by other parties to the initial basic rates, the resolution must state the reasons for the decision and the Board of Public Works must give public notice of its decision. Public notice will be given by advertisement once in the official newspaper of the City. Sec. 7 . 16. Review of Request for Increase in Basic Cable Rates. (a) Notice. A cable operator in the City who wishes to increase the rates for the basic service tier or associated equipment shall file a request with the Clerk of the Board of Public Works and notify all subscribers at least 30 days before the cable operator desires the increase to take effect . This notice may not be given more often than annually and not until at least one year after the determination of the initial basic cable rates . (b) Expedited determination and public hearing. (1) If the Board of Public Works is able to expeditiously determine that the cable operator' s rate increase request for basic cable service is within the FCC' s reasonable rate standard, as determined by the applicable price cap, the Board of Public Works shall : (A) hold a public hearing at which interested persons may express their views; and (B) act to approve the rate increase within 30 days from the date the cable operator filed its request with the City. (2) If the Board of Public Works takes no action within 30 days from the date the cable operator files its request with the City, the proposed rates will go into effect. (c) Extended review period. (1) If the Board of Public Works is unable to determine whether the rate increase is within the FCC' s reasonable rate standard based on the material before it, or if the cable operator submits a cost-of-service showing, the Board of Public Works shall, by adoption of a formal resolution, invoke the following additional periods of time, as applicable, to make a final determination: (A) 90 days if the Board of Public Works needs more time to ensure that the requested increase is within the FCC' s reasonable rate standard as determined by the applicable price cap; and (B) 150 days if the cable operator has submitted a cost-of-service showing seeking to justify a rate increase above the applicable price cap. (2) The proposed rate increase is tolled during the extended review period. (3) If the Board of Public Works has not made a decision within the 90 or 150 day period, the Board of Public Works shall issue a brief written order at the end of the period requesting the cable operator to keep accurate account of all amounts received by reason of the proposed rate increase and on whose behalf the amounts are paid. (d) Public hearing. During the extended review period and before taking action on the requested rate increase, the Board of Public Works shall hold at least one public hearing at which interested persons may express their views and record objections . provide the Clerk of the Board of Public Works with the objector' s name and address . (f) Delayed determination. If the Board of Public Works is unable to make a final determination concerning a requested rate increase within the extended time period, the cable operator may put the increase into effect, subject to subsequent refund if the Board of Public Works later issues a decision disapproving any portion of the increase. (g) Price cap analysis. If a cable operator presents its request for a rate increase as being in compliance with the FCC' s price cap, the Board of Public Works shall review the rate using the price cap analysis in accordance with the standard form authorized by the FCC. Based on the Board of Public Works' findings, the basic cable rates shall be established as follows : (1) If the proposed basic cable rate increase is within the price cap established by the FCC, the proposed rates shall become the new basic cable rates . (2) If the proposed basic cable rate increase exceeds the price cap established by the FCC, the Board of Public Works shall disapprove the proposed rate increase and order an increase that is in compliance with the price cap. (h) Cost-of-service showings. If a cable operator submits a cost-of-service showing in an attempt to justify a rate increase above the price cap, the Board of Public Works will review the submission pursuant to the FCC standards for cost-of-service review. The Board of Public Works may approve a rate increase above the price cap if the cable operator makes the necessary showing; however, a cost-of-service determination resulting in a rate below the price cap or below the cable operator' s then current rate will prescribe the cable operator' s new rate. (i) Decision. The Board of Public Works' decision concerning the requested rate increase shall be adopted by formal resolution. If a rate increase proposed by a cable operator is disapproved in whole or in part, or if objections were made by other parties to the proposed rate increase, the resolution must state the reasons for the decision. Objections may be made at the public hearing by a person requesting the Clerk of the Board of Public Works to record the objection or may be submitted in writing at anytime before the decision resolution is adopted. (j) Refunds. (1) The Board of Public works may order refunds of subscribers' rate payments with interest if: (A) the Board of Public Works was unable to make a decision within the extended time period as described in Paragraph (c) above; and (B) the cable operator implemented the rate increase at the end of the extended review period; and (C) the Board of Public Works determines that the rate increase as submitted exceeds the applicable price cap or that the cable operator failed to justify the rate increase by a cost-of-service showing, and the Board of Public Works disapproves any portion of the rate increase. appealed to the FCC in accordance with applicable federal regulations . Sec. 7. 17 . Cable Operator Information. (a) City may require. (1) In those cases when the cable operator has submitted initial rates or proposed an increase that exceeds the reasonable rate standard, the Board of Public Works may require the cable operator to produce information in addition to that submitted, including proprietary information, if needed to make a rate determination. In these cases, a cable operator may request the information be kept confidential in accordance with this section. (2) In cases where initial or proposed rates comply with the reasonable rate standard, the Board of Public Works may request additional information only in order to document that the cable operator' s rates are in accord with the standard. (b) Request for Confidentiality. (1) A cable operator submitting information to the Board of Public Works may request in writing that the information not be made routinely available for public inspection. A copy of the request shall be attached to and cover all of the information and all copies of the information to which it applies . (2) If feasible, the information to which the request applies shall be physically separated from any information to which the request does not apply. If this is not feasible, the portion of the information to which the request applies shall be identified. (3) Each request shall contain a statement of the reasons for withholding inspection and a statement of the facts upon which those reasons are based. (4) Casual requests which do not comply with the requirements of this subsection, shall not be considered. (c) Board of Public Works action. Requests which comply with the requirements of Subsection (b) , will be acted upon by the Board of Public Works . The Board of Public Works will grant the request if the cable operator presents by a preponderance of the evidence, a case for nondisclosure consistent with applicable federal regulations . If the request is granted, the ruling will be placed in a public file in lieu of the information withheld from public inspection. If the request does not present a case for nondisclosure and the Board of Public Works denies the request, the Board of Public Works shall take one of the following actions: (1) If the information has been submitted voluntarily without any direction from the City, the cable operator may request that the City return the information without considering it . Ordinarily, the City will comply with this request . Only in the unusual instance that the public interest so requires, will the information be made available for public inspection. (2) If the information was required to be submitted by the Board of Public Works, the information will be made available for public inspection. Sec. 7 .18. Automatic Rate Adjustments. (a) Annual inflation adjustment. In accordance with FCC regulations, the cable operator may adjust its capped base per channel rate for the basic service tier annually by the final GNP-PI index. (b) Other external costs. (1) The FCC regulations also allow the cable operator to increase its rate for the basic service tier automatically to reflect certain external cost factors to the extent that the increase in cost of those factors exceeds the GNP-PI . These factors include retransmission consent fees, programming costs, state and local taxes applicable to the provision of cable television service, and costs of franchise requirements . The total cost of an increase in a franchise fee may be automatically added to the base per channel rate, without regard to its relation to the GNP-PI . (2) For all categories of external costs other than retransmission consent and franchise fees, the starting date for measuring changes in external costs for which the basic service per channel rate may be adjusted will be the date on which the basic service tier becomes subject to regulation or February 28, 1994, whichever occurs first . The permitted per channel charge may not be adjusted for costs of retransmission consent fees or changes in those fees incurred before October 6, 1994 . (c) Notification and review. The cable operator shall notify the Clerk of the Board of Public Works at least 30 days in advance of a rate increase based on automatic adjustment items . The City will review the increase to determine whether the item or items qualify as automatic adjustments . If the City makes no objection within 30 days of receiving notice of the increase, the increase may go into effect . Sec. 7. 19. Enforcement. (a) Refunds. The City may order the cable operator to refund to subscribers a portion of previously paid rates under the following circumstances : (1) A portion of the previously paid rates have been determined to be in excess of the permitted tier charge or above the actual cost of service; or (2) The cable operator has failed to comply with a valid rate order issued by the City. (b) Fines. If the cable operator fails to comply with a rate decision or refund order, the cable operator shall be subject to a fine of $500 for each day the cable operator fails to comply. Section II . This Ordinance shall be in full force and effect from and after its passage by the Common Council, approval by the Mayor and legal publication. ./0°' A/// G.!//i �,•offRRRR/ ,'''''$OU Tit 8 4 .41 ;= �.\PEACE/- - a `rte a x �:i�/ 1865_:.;ii'. IRR..RRiRRY.7/MY'' City of South Bend Joseph E. Kernan, Mayor Office of the Mayor January 18, 1994 Mrs . Ann Puzzello President South Bend Common Council 4th Floor, County-City Building South Bend, Indiana 46601 Re : A Bill Amending Chapter 7 of the South Bend Municipal Code to Provide for the Regulation of Basic Tier Cable Rates and Associated Equipment Dear Mrs . Puzzello: I am attaching for filing a bill amending Chapter 7 of the South Bend Municipal Code to provide for the regulation of basic tier cable rates and associated equipment . Passage of a law consistent with FCC regulations is the final step which must be taken before South Bend can commence cable rate regulation pursuant to the Cable Television Consumer Protection and Competition Act of 1992 . As you may be aware, basic cable television rates are subject to a freeze which has been extended to February 15, 1994 . At that time, cable operators will be free to raise rates for basic cable programming to any level unless its franchising authority is certified to regulate rates by the FCC and has adopted rules and regulations consistent with FCC regulations which provide for the consideration of the views of interested parties . The City has completed the necessary paperwork to commence regulation, but now needs the procedural mechanism to implement rate regulation. This ordinance outlines the process by which a cable operator can justify its current rates as well as a process for requests for future rate increases . This process is wholly consistent with FCC regulations . The ordinance also provides for a public hearing prior to any subsequent rate determination. County-City Building • South Bend, Indiana 46601 • 219/235-9261 • Telefax 219/235-9892 r a Mrs . Ann Puzzello January 18, 1994 Page 2 This ordinance will enable the City of South Bend to insure that the rates charged for basic cable programming and associated equipment are within acceptable limits as determined by the FCC. Your support and favorable consideration of this bill is respectfully requested. Sincerely, fhE. Kernan Mayor AB\sb Enc . cc : Jenny Pitts Manier w/Enc. 1puzzello. jek flnmmtttrr itrpurt Wu tie Torunwn Q ounril of tip (Mg of*uut1 Erni): Your Committee OF THE WHOLE to whom was referred BILL NO. 7-94 A BILL OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AMENDING CHAPTER 7 OF THE SOUTH BEND MUNICIPAL CODE TO PROVIDE FOR THE REGULATION OF BASIC SERVICE TIER RATES AND RELATED EQUIPMENT, INSTALLATION AND SERVICE CHARGES OF ANY CABLE TELEVISION SYSTEM OPERATING IN THE CITY OF SOUTH BEND. Respectfully report that they have examined the matter and that in their opinion This bill has been recommended to the Council favorable. Roland Kelly Chairman FREE PRESS PUBLISHING CO.