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OR 93-628 Regulates rates, cable television subscribers for basic service tier ORDINANCE OF THE CITY OF COPPELL, TEXAS
ORDINANCE NO. 93628
AN ORDINANCE OF THE CITY OF COPPELL, TEXAS, PRESCRIBING
REGULATIONS FOR RATES CHARGED TO CABLE TELEVISION SUBSCRIBERS FOR
THE BASIC SERVICE TIER; PROVIDING THAT THIS ORDINANCE IS CUMULATIVE;
PROVIDING A SEVERABILITY CLAUSE; PROVIDING A REPEALING CLAUSE;
PROVIDING FOR A PENALTY OF FINE NOT TO EXCEED FIVE HUNDRED DOLLARS
($500.00); AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, the Federal Communications Commission ("FCC") has issued rules
pursuant to the Cable Television Consumer Protection and Competition Act, Pub. L. No.
102-385 (1992) ("1992 Cable Act"), implementing the regulation of cable television
subscriber rates; and
WHEREAS, these rules allocate the regulation of rates for the basic service tier and
associated equipment rates to local franchising authorities and require local authorities to
become certified and adopt their own regulations governing the process of rate regulation;
and
WHEREAS, the City of Coppell, Texas franchises cable television service for the
benefit of its citizens; and
WHEREAS, the City has submitted its application for certification to the FCC and
it is expedient to adopt the required regulations now, in order to implement regulations at
the earliest possible date to obtain the most competitive rates for the City's cable ratepayers;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF COPPELL, TEXAS:
SECTION 1. That the following regulations shall govern the charges to cable
television subscribers for the basic service tier and associated equipment, pursuant to the
1992 Cable Act:
DEFINITIONS
Basic Cable Rates means the monthly charges for a subscription to the basic service
tier and the associated equipment.
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,
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all must-carry signals, all PEG channels, and all domestic television signals other than
superstations.
Benchmark means per channel rate of charge for cable service and associated
equipment which the FCC has determined is reasonable.
Cable Act of 1992 means the Cable Television Consumer Protection and Competition
Act of 1992.
Cable Operator means any person or group of persons:
(a). Who provide cable service over a cable system and directly or through one or
more affiliates owns a significant interest in such a cable system; or
(b). who otherwise controls or is responsible for, through any arrangement, the
management and operation of such a cable system.
Channel means a unit of cable service identified and selected by a channel number
or similar designation.
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.
FCC means the Federal Communications Commission
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.
Must-Carry Signal means the signal of any local broadcast station (except
superstations) which is required to be carried on the basic service tier.
PEG Channel means the channel capacity designated for public, educational, or
governmental use, and facilities and equipment for the use of that channel capacity.
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.
Reasonable Rate Standard means a per channel rate that is at, or below, the
benchmark or price cap level.
Superstation means any non-local broadcast signal secondarily transmitted by
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satellite.
SECTION 2. 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 in 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 thirty (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 and
any supporting materials concerning the reasonableness of its rates.
C. Expedited determination and public hearing.
(1) If the City Council is able to expeditiously determine that the cable operator's
rates for the basic service tier and associated equipment are within the FCC's
reasonable rate standard, as determined by the applicable benchmark, the
City Council shall:
(a) hold a public hearing at which interested persons may express their
views; and
(b) act to approve the rates within thirty (30) days from the date the cable
operator filed its basic cable rates with the City.
(2) If the City Council takes no action within thirty (30) days from the date the
cable operator filed its basic cable rates with the City, the proposed rates will
continue in effect.
D. Extended review period.
(1) If the City Council 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 City Council shall,
within thirty (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:
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(a) ninety (90) days if the City Council needs more time to ensure that a
rate is within the FCC's reasonable rate standard; or
(b) one hundred fifty (150) days if the cable operator has submitted a cost-
of-service showing seeking to justify a rate above the applicable
benchmark.
(2) ff the City Council has not made a decision within the ninety (90) or one
hundred fifty (150) day period, the City Council 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 and on whose
behalf the amounts are paid.
E. Public hearing.
During the extended review period and before taking action on the proposed rate,
the City Council 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 proposed initial basic
rate may request the City Secretary 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 City Secretary with the objector's name and address.
G. Benchmark analysis.
If a cable operator submits its current basic cable rate schedule as being in
compliance with the FCC's reasonable rate standard, the City Council shall review
the rates using the benchmark analysis in accordance with the standard form
authorized by the FCC. Based on the City Council's findings, the initial basic cable
rates shall be established as follows:
(1) If the current basic cable rates are below the benchmark, those rates shall
become the initial basic cable rates and the cable operator's rates will be
capped at that level.
(2) If the current basic cable rates exceed the benchmark, the rates shall be the
greater of the cable operator's per channel rate on September 30, 1992,
reduced by ten percent (10%), or the applicable benchmark, adjusted for
inflation and any change in the number of channels occurring between
September 30, 1992, and the initial date of regulation.
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(3) If the current 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 an initial basic cable rate above the FCC's reasonable rate standard. The
City Council will review a cost-of-service submission pursuant to FCC standards for
cost-of-service review. The City Council 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 ten percent (10%), will prescribe the
cable operator's new rates.
I. Decision.
(1) By formal resolution. After completion of its review of the cable operator's
proposed rates, the City Council shall adopt its decision by formal resolution.
The decision shall include one of the following:
(A) If the proposal is within the FCC's reasonable rate standard or is
justified by a cost-of-service analysis, the City Council shall approve the
initial basic cable rates proposed by the cable operator; or
(B) If the proposal is not within the FCC's reasonable rate standard and
the cost-of-service analysis, Council 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 City Council 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 City Council may
order the rates reduced in accordance with Paragraph G or H above, as
applicable. In addition, the City Council 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 City Council's decision resolution.
(3) Statement of reasons for decision and public notice. If rates proposed by
a cable operator are disapproved in whole or in part, or if there were
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objections made by other parties to the proposed rates, the resolution must
give public notice of its decision. Public notice will be given by advertisement
once in the official newspaper of the City.
J. Appeal.
The City Council's decision concerning rates for the basic service tier or associated
equipment may be appealed to the FCC in accordance with applicable federal
regulations.
SECTION 3. 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 City and notify all
subscribers at least thirty (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 City Council 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 City Council
shall:
(A) hold a public hearing at which interested persons may express their
views; and
(B) act to approve the rate increase within thirty (30) days from the date
the cable operator filed its request with the City.
(2) If the City Council takes no action within thirty (30) days from the date the
cable operator filed its request with the City, the proposed rates will go into
effect.
C. Extended review period.
(1) If the City Council 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 City Council shall, by
adoption of a formal resolution, invoke the following additional periods of
time, as applicable, to make a final determination:
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(A) ninety (90) days if the City Council needs more time to ensure that a
rate is within the FCC's reasonable rate standard; or
(B) one hundred fifty (150) days if the cable operator has submitted a cost-
of-service showing seeking to justify a rate above the applicable
benchmark.
(2) The proposed rate increase is tolled during the extended review period.
(3) If the City Council has not made a decision within the ninety (90) or one
hundred fifty (150) days period, the City Council 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 Heating.
During the extended review period and before taking action on the requested rate
increase, the City Council shall hold at least one public hearing at which interested
persons may express their view and record objections.
E. Objections.
An interested person who wishes to make an objection to the proposed rate increase
may request the City Secretary 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 City Secretary with the objector's name and address.
F. Delayed determination.
If the City Council 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 City Council 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 analysis in accordance with the standard form authorized
by the FCC, based on the City Council's findings, the basic cable rates shall be
established as follows:
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(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 City Council 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 City Council will review the submission pursuant
to the FCC standards for cost-of-service review. The City Council 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 City Council's decision concerning the 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 objections may be made at the public hearing by a person requesting the City
Secretary to record the objection or may be submitted in writing at anytime before
the decision resolution is adopted.
J. Refunds.
(1) The City Council may order refunds of subscribers' rate payments with
interest if:
(A) the City Council 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 City Council 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 City
Council disapproves any portion of the rate increase.
(2) The method for paying any refund and the interest rate will be in accordance
with FCC regulations as directed in the City Council's decision resolution.
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K. Appeal.
The City Council's decision concerning rates for the basic service tier or associated
equipment, may be appealed to the FCC in accordance with applicable federal
regulations.
SECTION 4. 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 City Council 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 City Council may request additional information only in order
to document that the cable operator's rates are in accord with the standard.
B. Request for con~dentiality.
(1) A cable operator submitting proprietary information to the City Council 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. Any
such request shall be submitted to the office of the City Attorney to ensure
compliance with Chapter 552, Government Code, V.T.C.A., the Open Records
Act.
(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.
C. City Council action.
Requests which comply with the requirements of Subsection B, will be acted upon
by the City Council. The City Council will grant the request if the cable operator
presents by a preponderance of the evidence, a case for nondisclosure consisting 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 City Council denies the request,
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the City Council 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 City Council, the
information will be made available for public inspection.
D. Appeal.
If the City Council denies the request for con~dentiality, the cable operator may seek
review of that decision from the FCC within five (5) working days of the City
Council's decision, and the release of the information will be stayed pending review.
SECTION 5. 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 regulations 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.
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C. Notification and review.
The cable operator shall notify the City at least thirty (30) days in advance of a rate
increase based on automatic adjustment items. The City shall review the increase
to determine whether the item or items qualify as automatic adjustments. If the City
makes no objection within thirty (30) days of receiving notice of the increase, the
increase may go into effect.
SECTION 6. 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 equipment; 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 Five Hundred and No/100 Dollars ($500.00)
for each day the cable operator fails to comply.
SECTION 7. CUMULATIVE CLAUSE
That the provisions of this ordinance are cumulative of any laws of the State of
Texas, or federal statutes, applicable to the regulation of rates for cable television
subscribers.
SECTION 8. SEVERABILITY CLAUSE
That if any article, paragraph or subdivision, clause or provision of this ordinance
shall be adjudged invalid or held unconstitutional, the same shall not affect the validity of
this ordinance as a whole or any part or provision thereof, other than the parts so decided
to be invalid or unconstitutional.
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SECTION 9. REPEALING CLAUSE
That all ordinances, or parts of ordinances, inconsistent or in conflict with provisions
of this ordinance, are hereby repealed.
SECTION 10. EFFECTIVE DATE
That this ordinance shall take effect immediately from and after its passage as the
law and charter in such cases provide.
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APPR~ED:
~4AYOR
ATTEST:
APPROVED AS TO FORM:
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