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HomeMy WebLinkAbout06-059 CC Resolution I I I RESOLUTION NO. 06.59 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA APPROVING AND AUTHORIZING THE EXECUTION OF A NONEXCLUSIVE CABLE FRANCHISE AGREEMENT BETWEEN THE CITY AND VERIZON CALIFORNIA INC. THE CITY COUNCIL OF THE CITY OF TEMECUlA DOES HEREBY RESOLVE AS FOllOWS: Section 1. This resolution is adopted in consideration of the following facts and circumstances: A. The City of Temecula is a "Franchising Authority" as defined in Title VI of the Communications Act (see 47 U.S.C. 9 522(10)) and is authorized to grant one or more nonexclusive cable franchises in accordance with California Government Code Section 53066 and Chapter 5.12 of the Temecula Municipal Code. B. Verizon California Inc. ("Franchisee") is in the process of installing a Fiber-to-the-Premise Telecommunications Network ("FTTP Network") that will occupy the public rights-of-way within the City of T emecula for the transmission of non-cable services pursuant to its status as a telecommunications carrier as set forth in Title II of the federal Communications Act and under authority granted by the State of California. C. The FTTP Network, once installed, will enable the provision of cable service to the residents of Temecula. D. Negotiations between the Franchising Authority and the Franchisee have resulted in a cable franchise agreement, which agreement comports with the requirements of applicable law. E. Notice of a public hearing by the Franchising Authority to consider the proposed cable franchise agreement was properly published in The Californian on June 12, 2006, and June 19, 2006, in accordance with California Government Code Sections 6066 and 53066.3(a). F. The Franchising Authority has reviewed the legal, technical, and financial qualifications of the Franchisee to operate a cable system and to provide cable service within the City, and the Franchising Authority's staff has prepared a Staff Report dated June 27, 2006, ("Staff Report"). The Staff Report sets forth Franchisee's qualifications, identifies the future cable-related needs and interests of the City of Temecula and its residents, and discusses each of the requirements and criteria set forth by federal, state, and local law with respect to granting an additional cable television franchise. G. After receiving the comments of interested parties at a public hearing affording due process to all parties, reviewing the entire record regarding this R:/Resos 2006JResos 06-59 I I I matter before it, and specifically considering each of the factors set forth in California Government Code Section 53066.3(a), 47 U.S.C. Section 541 (a), and all other applicable provisions of law, the Franchising Authority determines that is in the public interest to approve and to authorize the execution of the proposed cable franchise agreement. Section 2. The Franchising Authority finds and determines that it is in the public interest to grant to Verizon California Inc. a nonexclusive franchise to operate a cable system and to provide cable service. Based upon the analysis, conclusions, and recommendations of City staff as set forth in the Staff Report, the Franchising Authority makes the following findings and determinations concerning the following factors that are required to be considered under Section 53066.3(a) of the California Government Code: A. Whether there will be significant positive or negative impacts on the community being served. [Cal. Gov't Code 9 53066.3(a)(1 ).] The grant of a nonexclusive cable franchise to Verizon will have no negative impact on the community, and the overall impact of Verizon's presence as a cable service provider in Temecula will potentially be positive. Among the most significant positive impacts are those related to the benefits that competition will bring to the City's residents. The California State Legislature has proclaimed by statute that it: ".. .hereby finds and declares that the policies for telecommunications in California are.. .to promote lower prices, broader consumer choice, and avoidance of anticompetitive conduct" and "to remove the barriers to open and competitive markets and promote fair product and price competition in a way that encourages grater efficiency, lower prices, and more consumer choice." [Cal. Pub. Util. Code 99 709(f) & (g).] Congress, the General Accounting Office, and the Federal Communications Commission have specifically found that wireline competition in the provision of cable service results in higher customer service quality, improved programming and lower rates. By providing competition, the grant of a nonexclusive franchise to Verizon to provide cable services will have a significant positive impact on Temecula and will not have any negative impact. B. Whether there will be an unreasonable adverse economic or aesthetic impact upon public or private property within the area. [Cal. Gov't Code 9 53066.3(a)(2).] The grant of a nonexclusive cable franchise to Verizon will not result in any unreasonable adverse economic impact on the City. Grant of the franchise will bring competition for cable programming service to the residents of Temecula and potentially result in a positive economic impact for subscribers. There will also be a potential R:/Resos 2006JResos 06-59 2 I I I positive impact on Temecula's economic development efforts. With the grant of a franchise to Verizon, Temecula residents will be able to subscribe to bundled services that include video, voice, and data over the FTTP Network. The FTTP Network will enable subscribers to enjoy digital cable service, unencumbered by the need to share bandwidth with voice and data services. Granting Verizon a franchise may also increase cable penetration, adding subscribers to the City's franchise fee base. Some residents who do not currently subscribe to cable service, or who are now satellite customers, may subscribe to Verizon's cable service, thereby increasing the overall number of subscribers generating revenue on which cable franchise fees are paid. The increase in content choices proposed to be provided by Verizon's service offerings has the potential to generate more purchases in the higher cable tiers, thereby increasing the franchise fee revenue base in this manner as well. The grant of a franchise to Verizon will not result in any unreasonable adverse aesthetic impacts upon public or private property within Temecula. Verizon is seeking a franchise from the City to provide cable services over its existing FTTP Network, when it is completed. The FTTP Network carrying Verizon's cable services will be constructed, operated, and maintained as an upgrade to or an extension of its existing telecommunications facilities pursuant to authority granted by the state. During the installation of the FTTP Network, Verizon will work in coordination with the Public Works Department to minimize disruptions and adverse impacts to City streets. Where the existing network is placed overhead, on existing utility poles, the upgraded network facilities will be placed overhead; where the existing network is placed underground, the upgraded network will be placed underground. Because the facilities used to provide Verizon's cable services will be the same facilities used to provide the other services that will be carried by Verizon's FTTP Network, the grant of a cable franchise will have no additional adverse aesthetic effect on public or private property. C. Whether there will be an unreasonable disruption or inconvenience to existing users, or any adverse effect on future use, of utility poles, public easements, and the public rights-of-way contrary to the intent of Section 767.5 of the Public Utilities Code. [Cal. Gov't Code 9 53066.3(a)(3).] There will not be any unreasonable disruptions or inconvenience to existing cable users, nor any adverse effects in the areas noted above. Because the facilities used to provide Verizon's cable services will be the same facilities used to provide the other services that will be carried by Verizon's FTTP Network, consistent with Section 767.5 of the Public Utilities Code, the grant of a cable franchise to Verizon will cause no additional disruptions or inconvenience to existing users, nor any adverse effects on the future use of utility poles, public easements, or public rights-of-way. D. Whether the franchise applicant has the technical and financial ability to perform. [Cal. Gov't Code 9 53066.3(a)(4).] R:/Resos 2006JResos 06-59 3 I I I . Verizon has demonstrated its financial, technical and legal qualifications and the ability to provide cable service in Temecula. E. Whether there is any impact on the franchising authority's interest in having universal cable service. [Cal. Gov't Code 9 53066.3(a)(5).] The grant of a nonexclusive cable franchise to Verizon will have a positive impact on the City's interest in universal cable service. Providing the residents of Temecula with a choice of providers will have a positive impact on the City's desire to promote universal cable service. F. Whether other societal interests generally considered by franchising authorities will be met. [Cal. Gov't Code 9 53066.3(a)(6).] The grant of a nonexclusive franchise to Verizon will meet a variety of societal interests generally considered by franchising authorities. These include the City's interest in enhancing civic awareness and community participation through the reservation of educational and governmental access channels on the proposed cable system; the City's interest in community connectivity through Verizon's provision of cable service to City, school district, and community facilities; the City's interest in generating additional revenue through the payment of franchise fees; and the City's interest in continuing economic development in the community, as Verizon's state-of- the-art service offerings and network may add to the value and attractiveness of local residential and business development efforts. Finally, providing residents with a choice of cable providers will also enhance societal interests in the community by bringing to the City the benefits of competition in the provision of cable services. G. Whether the operation of an additional cable system in the community is economically feasible. [Cal. Gov't Code 9 53066.3(a)(7).] It is economically feasible for the community to support a competitive cable service provider. With a population nearing 95,000, Temecula is a desirable residential community in Riverside County. The City is an attractive place to live because of the many recreational and cultural opportunities and a thriving economy. Verizon intends to offer a competitive program lineup that will be attractive to cable subscribers. In addition, Verizon is installing the FTTP Network over which its cable service will be delivered as an upgrade to its existing telecommunications network that will also carry voice and data services. This should result in a reduction of the capital expenditures needed to enable Verizon to support its cable service offering. Given the growth in the community, the higher than average household incomes, and the community's expressed desire for competitive cable offerings, the Franchising R:/Resos 2006JResos 06-59 4 I I I Authority determines that the operation of an additional cable system in Temecula is economically feasible. H. Such other additional matters, both procedural and substantive, as the franchising authority may determine to be relevant. [Cal. Gov't Code 9 53066.3(a)(8).] (1) EG Reauirements. California Government Code Section 53066.3(d) requires the City to ensure that competitive franchise agreements contain the same educational and governmental (EG) access requirements that are set forth in the existing franchise with an incumbent. The incumbent cable operator in Temecula currently provides one shared EG channel. The proposed Franchise Agreement requires Verizon initially to provide one exclusive EG channel and to carry the EG programming that is now cablecast on the incumbent provider's cable system. The proposed Franchise Agreement further requires Verizon to reserve two additional EG channels for future use by the City. Verizon has agreed to provide on-going monetary support for EG programming based on monthly subscriber levels. The per subscriber amount will be determined by the Franchising Authority, as set forth in Article 6 of the proposed Franchise Agreement. The terms of the proposed Franchise Agreement ensure that Verizon will provide adequate EG access channel capacity, facilities, and financial support, and Verizon's obligations in this area are comparable to those contained in the City's cable franchise agreement with the incumbent cable operator. (2) Non-Discrimination Reauirements. State and Federal laws contain certain non-discrimination requirements. The Franchising Authority finds and determines Verizon's proposed buildout of its cable system complies with these requirements. (3) Comoetitive Neutralitv Between Prooosed Verizon Cable Franchise Aareement and Incumbent Cable Franchise Aareement. The proposed Franchise Agreement contains a number of significant provisions that are relevant to Verizon's provision of cable services in the City. Taken as a whole, the Franchise Authority finds and determines that the material provisions of the proposed Franchise Agreement are competitively neutral when compared with the provisions contained in the franchise agreement with the incumbent cable operator. In addition, the proposed Franchise Agreement does not deprive any party of equal protection under the law. R:/Resos 2006JResos 06-59 5 I I I Section 3. Based upon the findings and determinations set forth above in Section 2, the Franchising Authority authorizes the grant of a nonexclusive franchise to Verizon California Inc. to operate a cable system and to provide cable service within the City. This authorization is made in accordance with the applicable provisions of California Government Code Section 53066.3 and Title VI of the Communications Act. A copy of the Cable Franchise Agreement in the form presented to the Franchising Authority at its public hearing on June 27, 2006, is directed to be retained in the office of the City Clerk for the purpose of public inspection for a period of 30 days after the effective date of this resolution. Section 4. That certain Cable Franchise Agreement in the form presented to the Franchising Authority at this public hearing is approved, and the Mayor is authorized and directed to execute that agreement on behalf of the Franchising Authority following its execution by the Franchisee. Section 5. The City Clerk is directed to transmit a certified copy of this resolution to: Mr. Tim McCallion, President, Pacific Region, Verizon California Inc., 112 Lakeview Canyon Road, Thousand Oaks, California 91362. Section 6. The City Clerk is directed to certify to the passage and adoption of this resolution. PASSED, APPROVED, AND ADOPTED by the City Council of the City of Temecula this 27th day of June, 2006. GG1, Ron Roberts, Mayor ATTEST: [SEAL] R:/Resos 2006JResos 06-59 6 I I I STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss CITY OF TEMECULA ) I, Susan W. Jones, MMC, City Clerk of the City of Temecula, do hereby certify that the foregoing Resolution No. 06-59 was duly and regularly adopted by the City Council of the City of Temecula at a meeting thereof held on the 27th day of June, 2006, by the following vote: AYES: 5 COUNCIL MEMBERS: NOES: 0 COUNCIL MEMBERS: COUNCIL MEMBERS: ABSENT: 0 ABSTAIN: 0 COUNCIL MEMBERS: R:/Resos 2006JResos 06-59 7 Comerchero, Edwards, Naggar, Washington, Roberts None None None . Jones, MMC City Clerk