This chapter shall be known and may be cited as the "Town of
Galena cable service Franchising Act" (this "chapter"). The purposes
of this chapter are to: i) establish the terms and conditions under
which a franchise occupying the public rights-of-way must operate
within the Town of Galena; ii) provide for the payment of a franchise
fee to the Town for use of the public rights-of-way and other costs
associated with administering and regulating cable service; and iii)
enhance the Town's authority to grant a cable service franchise
while managing the public rights-of-way.
As used in this chapter, the following terms shall have the
meanings indicated. Words not defined shall be given their common
and ordinary meaning.
Any person, including a nonprofit community access corporation,
designated by the Town to perform any or all of the following functions:
Each person who falls into one or more of the following categories:
Each person having, directly or indirectly, a controlling interest
in a grantee;
Each person in which a grantee has, directly or indirectly,
a controlling interest; or
Each person, directly or indirectly, controlling, controlled
by or under common management, common ownership or common control
with a grantee; provided that "affiliate" shall in no event mean any
creditor of a grantee solely by virtue of its status as a creditor
and which is not otherwise an affiliate by reason of owning, directly
or indirectly, a controlling interest in, being owned by or being
under common ownership, common management or common control with a
grantee.
A binding contract granting a cable service franchise pursuant
to this chapter, and any amendments, exhibits or appendices thereto,
containing the specific provisions of the cable service franchise
granted, including references, specifications, requirements and other
related matters.
Any service tier which includes the retransmission or delivery
of local television broadcast signals, origination channels and PEG
access channels. In the event that the definition of "basic cable
service" is amended by an act of the United States Congress, under
the Cable Act or otherwise, then the definition under this section
shall be amended to conform therewith.
The Cable Communications Policy Act of 1984, codified at
Title VI of the Communications Act of 1934, 47 U.S.C. §§ 521
through 573, as amended by the Cable Television Consumer Protection
and Competition Act of 1992 and the Telecommunications Act of 1996,
and as may be amended from time to time.
The one-way transmission to subscribers of video programming
or other programming services and subscriber interaction, if any,
which is required for the selection or use of such video programming
or other programming service.
A facility consisting of a set of closed transmission paths
and associated signal generation, reception, transmission and control
equipment that is designed to provide cable service, which includes
video programming and which is provided to multiple subscribers within
the Town of Galena, but such term does not include:
A facility that serves only to retransmit the television signals
of one or more television broadcast stations;
A facility that serves subscribers without using any public
rights-of-way;
A facility of a common carrier which is subject, in whole or
in part, to the provisions of Chapter II of the Cable Act, except
that such facility shall be considered a cable system if such facility
is used in the transmission of video programming directly to subscribers,
unless the extent of such use is solely to provide interactive on-demand
services; or
Any facilities of any electric utility used solely for operating
its electric utility system.
A reference to a "cable system" in this chapter refers to any
part of such cable system. The foregoing definition of "cable system"
shall not be deemed to circumscribe or limit the authority of the
Town to regulate or franchise the activities of any other communications
or information system to the maximum extent permitted by law.
A portion of the electromagnetic frequency spectrum that
is used in a cable system and which is capable of delivering a television
channel (as a "television channel" is defined by the FCC).
Actual working control or ownership of a system in whatever
manner exercised. A rebuttable presumption of the existence of control
or a controlling interest shall arise from the beneficial ownership,
directly or indirectly, by any person or entity (except underwriters
during the period in which they are offering securities to the public)
of 25% or more of a cable system or a franchise under which the system
is operated. A change in the control or controlling interest of any
entity which has control or a controlling interest in a grantee shall
constitute a change in the control or controlling interest of the
system under the same criteria. Control or a controlling interest,
as used herein, may be held simultaneously by more than one person
or entity.
An electronic tuning device which converts cable service
signals into a signal that can be received and displayed on a subscriber's
television set. While not an explicit part of signal conversion, many
cable converter boxes include forms of descrambling to manage carrier-controlled
access restriction to various channels.
The Federal Communications Commission and any legally appointed,
designated or elected agent or successor.
A nonexclusive authorization, or renewal thereof, evidenced
by a written franchise agreement, granted pursuant to this chapter
and applicable law, to construct, operate and maintain a cable system
within the public rights-of-way to provide cable service within all
or a specified area of the Town of Galena. The term "franchise" includes
a franchise agreement. Any such authorization, in whatever form granted,
shall not mean or include any license or permit required for the privilege
of transacting and carrying on a business within the Town of Galena
as required by applicable law, or for attaching devices to poles or
other structures, whether owned by the Town or a private entity, or
for excavating or performing other work in or along the public rights-of-way.
The geographic area within the corporate limits of the Town
of Galena that a grantee is authorized to serve by its franchise.
The fee imposed by the Town pursuant to § 59-12 of this chapter. The term "franchise fee" does not include:
Any tax, fee or assessment of general applicability (including
any such tax, fee or assessment imposed on both utilities and cable
operators);
Capital costs that are required by a franchise agreement to
be incurred by the cable operator for public, educational or governmental
access facilities; or
Requirements or charges incidental to the awarding or enforcing
of a franchise, including payments for bonds, security funds, letters
of credit, insurance, indemnification, penalties or liquidated damages.
A person to whom or which a franchise is granted by the Town
pursuant to this chapter, along with the lawful successors or assigns
of such person.
All revenue, as determined in accordance with generally accepted
accounting principles, that is derived by the grantee and by each
affiliate from the operation of the cable system to provide cable
services.
Gross revenue shall include, to the extent it is received by
the grantee, revenue from any other person, including, without limitation,
leased or PEG channel programmers, that is derived from the operation
of the cable system to provide cable services.
Gross revenue shall also include, by way of example and without
limitation:
The fair market value of any nonmonetary (i.e., barter) transactions
between the grantee and any affiliate, which fair market value shall
not be less than the customary prices paid in connection with equivalent
transactions conducted with persons who are not affiliates and which
would, if received in the form of cash, otherwise be of a kind or
character constituting gross revenue;
Revenue received by the grantee which represents or can be attributed
to a subscriber fee or a payment for the use of the cable system for
the sale of merchandise through any cable service distributed over
the cable system;
Franchise fees received from subscribers;
Fees received from subscribers to support PEG channels;
To the extent allowed by applicable law, revenue generated from
the provision of cable modem service and Voice over Internet Protocol
(VoIP) service;
Any revenue generated by the grantee or by any affiliate through
any means which has the effect of avoiding the payment of compensation
that would otherwise be paid to the grantor for the franchise granted
in this agreement;
Any revenue from subscriber equipment sold or leased by the
grantee or an affiliate;
Late fees and administrative fees;
Revenue derived from program guides;
Revenue derived from forfeited deposits;
Revenue derived from installation, disconnection, or service
call fees;
Revenue derived from game channels;
Studio rental, rental of or charges for production equipment,
and personnel fees;
Revenue derived from commissions;
Any actual bad debt that is written off but subsequently collected
(such bad debt shall be included as gross revenue for the period in
which it is collected); and
Other revenues that may be posted in the general ledger as an
offset to an expense account.
Gross revenue shall also include all advertising revenue which
is derived, directly or indirectly, from or in connection with the
sale of advertising on the cable system, whether by the grantee or
whether collected by an affiliate or any other person for the grantee.
If the advertising revenue received from the affiliate is only net
advertising revenue, advertising revenues from an affiliate shall
be grossed up as if the grantee had received the advertising revenue
directly. Notwithstanding the preceding sentence, standard and reasonable
commissions retained by a regional interconnect that is an affiliate
may be excluded from gross revenue.
Gross revenue shall not include:
Any compensation awarded to the grantee based on the grantor's
condemnation of property of the grantee;
The revenue of any person, including, without limitation, a
supplier of programming to the grantee, to the extent that such revenue
is also included in gross revenue of the grantee;
The revenue of the grantee or any other person which is generated
directly from the sale of any merchandise through any service distributed
over the cable system, other than that portion of such revenue which
represents or can be attributed to a subscriber fee or a payment for
the use of the cable system for the sale of such merchandise, for
example, the portion of such payment attributable to a commission
for the grantee or an affiliate, which portion shall be included in
gross revenue;
Taxes imposed by law on subscribers which the grantee is obligated
to collect, it being acknowledged that franchise fees under this agreement
are not considered taxes;
Amounts collected by the grantee from subscribers on behalf
of leased or PEG channel programmers, other than affiliates, to the
extent that all of the amounts collected, in excess of the amounts
deducted and paid to the grantor, are passed on by the grantee to
such programmers;
The revenue of any affiliate which represents standard and reasonable
amounts paid by the grantee to the affiliate for ordinary and necessary
business expenses of the grantee, including, without limitation, professional
service fees and insurance or bond premiums;
Advertising commissions deducted by advertising agencies, other
than an agency which is an affiliate, before advertising revenues
are paid over to the grantee;
To the extent consistent with generally accepted accounting
principles, consistently applied, actual bad debt write-offs taken
in the ordinary course of business;
Amounts recovered by the grantee for theft or loss of portions
of the cable system, which amounts were previously written off;
Investment income; and
Payments received by the grantee or an affiliate that represent
a reimbursement for work performed by the grantee or its agents on
behalf of a contractor or third party, where payment for such work
would not normally be considered gross revenue based on the nature
of the work performed.
All areas in the Town of Galena that will receive cable service
initially, as set forth in a franchise agreement.
The connection of the system to subscribers' terminals,
and the provision of cable service.
Any channel designated or dedicated for use by persons unaffiliated
with a grantee in accordance with 47 U.S.C. § 532.
Those hours during which most businesses in and about the
Town of Galena similar to a grantee are open to serve customers.
Those service conditions which are within the control of
a grantee. Those conditions which are not within the control of a
grantee include, but are not limited to, natural disasters, civil
disturbances, power outages, telephone network outages and severe
or unusual weather conditions. Conditions which are ordinarily within
the control of a grantee include, but are not limited to, special
promotions, pay-per-view events, rate increases, regular peak or seasonal
demand periods and maintenance or upgrade of the cable system.
The complete loss of picture, sound or both on multiple channels
from a common problem which affects multiple customers on the system.
A person authorized to administer or operate a PEG facility,
and shall include the Town and the access manager. If several persons
operate or share the same PEG facility, each person shall be considered
a separate PEG access user.
Any natural person or any partnership, association, joint
stock company, joint venture, domestic or foreign corporation, stock
or nonstock corporation, limited liability company, professional limited
liability company, an organization or entity of any kind or any lawful
successor thereto or transferee thereof. Such term does not include
the Town.
The surface of and all rights-of-way and the space above
and below any public street, road, highway, freeway, lane, path, public
way or place, sidewalk, alley, court, boulevard, parkway, bridge,
driveway, drive or easement now or hereafter held by the Town for
the purpose of public travel, and shall include other similar easements
or rights-of-way as shall be now held or hereafter held by the Town
which shall, within their proper use and meaning, entitle a grantee
to the use thereof for the purposes of installing poles, wires, cable,
conductors, ducts, conduits, vaults, manholes, amplifiers, appliances,
attachments and other property as may be ordinarily necessary and
pertinent to a cable system.
The loss of either picture or sound or both, on one or more
channels, affecting at least one subscriber on the system.
The State of Maryland.
Any person lawfully receiving cable service provided by a
grantee by means of or in connection with the cable system, whether
or not a fee is paid for such cable service, including such persons
authorized to receive cable service without charge as provided for
in a franchise agreement.
The Mayor and Council of Galena, a body politic and municipal
corporation under the laws of the State of Maryland, and any agency
or department thereof.
The person designated pursuant to Section 804 of the Charter
of the Town of Galena, or that person's designee.
Any franchise granted by the Town shall grant to a grantee the
nonexclusive right and privilege to construct, erect, install, maintain
or operate: i) a cable system in, upon, along, across, above, over
and under the public rights-of-way within the Town of Galena now in
existence and as may be created or established during any franchise
term; ii) any poles, wires, cable, underground conduits, manholes
and other television conductors and fixtures necessary for the maintenance
and operation of a cable system to provide cable service; and iii)
other services as may lawfully be allowed within a franchise area.
A franchise granted by the Town does not expressly or implicitly authorize
a grantee to provide service to, or install a cable system on, private
property without the owner's consent (except for use of compatible
easements pursuant to the Cable Act) or to use publicly or privately
owned conduits or any other public property without a separate agreement
with the owner(s) thereof.
A.
Any person desiring an initial franchise for cable service or the
renewal or modification of an existing franchise for cable service
shall file a written application with the Town. The application shall
be in such form and under such terms and conditions as determined
by the Town.
B.
To be acceptable for filing, a signed original of the application
shall be submitted together with sufficient copies required by the
Town. The application must be accompanied by any required application
filing fee, conform to any applicable request for proposals and contain
all required information. All applications shall include the names
and addresses of persons authorized to act on behalf of all applicants
with respect to the application.
C.
All applications accepted for filing shall be made available by the
Town for public inspection.
D.
A person may apply for an initial franchise or a franchise renewal
by submitting an application containing, at a minimum, the following
information:
(1)
Name and address of the applicant and identification of the ownership
and control of the applicant, including; i) the names and addresses
of the 10 largest holders of an ownership interest in the applicant
and affiliates of the applicant, and all persons with 5% or more ownership
interest in the applicant and its affiliates; ii) the persons who
control the applicant and its affiliates; and iii) all officers and
directors of the applicant and its affiliates;
(2)
A demonstration of the applicant's technical ability to construct
and/or operate the proposed cable system, including identification
of key personnel;
(3)
A demonstration of the applicant's legal qualifications to construct
and/or operate the proposed cable system;
(4)
A statement prepared by a certified public accountant regarding the
applicant's financial ability to complete the construction and
operation of the cable system proposed;
(5)
A description of the applicant's prior experience in cable system
ownership, construction and operation and identification of communities
in which the applicant or any of its principals have, or have had,
a cable franchise or any interest therein;
(6)
Identification of the area of the Town of Galena to be served by
the proposed cable system, including a description of the proposed
franchise area's boundaries;
(7)
A detailed description of the physical facilities proposed, including
channel capacity, technical design, performance characteristics, head
end and access facilities;
(8)
Where applicable, a description of the construction of the proposed
cable system, including an estimate of plant mileage and its location;
the proposed construction schedule; a description, where appropriate,
of how services will be converted from existing facilities to new
facilities; and information on the availability of space in conduits,
including, where appropriate, an estimate of the cost of any necessary
rearrangement of existing facilities;
(9)
The proposed rate structure, including projected charges for each
service, installation, converters and all other proposed equipment
or service;
(10)
A demonstration of how the applicant will reasonably meet the future
cable-related needs and interests of the Town of Galena, including
descriptions of how the applicant will meet the needs described in
any recent community needs assessment conducted by or for the Town,
and how the applicant will provide adequate PEG access channel capacity,
facilities or financial support to meet the Town's needs and
interests;
(11)
Pro forma financial projection for the proposed franchise term, including
a statement of projected income, and a schedule of planned capital
additions, with all significant assumptions explained in notes or
supporting schedules;
(12)
If the applicant proposes to provide cable service to an area already
served by an existing grantee, the identification of the area where
the overbuild would occur and the ability of the public rights-of-way
and other property that would be used by the applicant to accommodate
an additional cable system;
(13)
Any other information that may be reasonably necessary to demonstrate
compliance with the requirements of this chapter;
(14)
Any additional information that the Town may request of the applicant
that is relevant to the Town's consideration of the application;
(15)
An affidavit or declaration of the applicant or authorized officer
certifying the truth and accuracy of the information in the application,
acknowledging the enforceability of application commitments and certifying
that the application complies with applicable law;
(16)
The Town may, at its discretion and upon request of an applicant,
waive in writing the provision of any of the information required
by this section; and
(17)
The application for a renewal franchise may incorporate by reference
any of the above required information by reference if such information
was supplied in the initial application and has not changed since
the time of the initial application.
E.
An applicant shall be notified of any public hearings held in connection
with the evaluation of its application and shall be given an opportunity
to be heard.
F.
An nonrefundable application fee of $5,000 shall accompany any initial franchise application. A nonrefundable application fee of $1,000 shall accompany any renewal application or modification application unless otherwise stipulated by the Town. In addition, the Town may require an applicant to reimburse the Town for its reasonable out-of-pocket expenses in considering the application, including attorneys' and consultants' fees. Payments made by a grantee hereunder shall not be deemed to be franchise fees within the meaning of the Cable Act, and such payment shall not be deemed to be involuntary payment chargeable against, or part of, the compensation to be paid to the Town by the grantee pursuant to § 59-12 of this chapter and applicable provisions of a franchise agreement. The purpose of the application fees is to cover costs incidental to processing and evaluating the application and/or enforcement of the franchise.
A.
A franchise and the rights, privileges and authority granted thereto
shall take effect and be in force as set forth in the franchise agreement
and shall continue in force and effect for a term of no longer than
10 years. Such franchise shall be nonexclusive and revocable.
B.
Within 30 days after the Town's decision to grant a franchise,
the intended grantee shall file with the Town its unconditional acceptance
of the franchise and its promise to comply with and abide by all its
provisions, terms and conditions.
Franchise renewals shall be conducted in accordance with applicable
law, including, but not limited to, the Cable Act, as amended. The
Town and a grantee, by mutual consent, may enter into renewal negotiations
at any time during the term of a franchise agreement.
All notices, reports or demands required to be given in writing
pursuant this chapter shall be delivered via certified first-class
mail or reputable overnight courier service to the Town Administrator
or to the Town Administrator's designee, if to the Town, and
to the person designated by the grantee in a franchise agreement,
if to the grantee. A grantee shall maintain with the Town, throughout
the term of a franchise, an address for personal service and a central
office to address any issues relating to a franchise operating under
this chapter.
A.
In entering into a franchise agreement with the Town, a grantee shall
acknowledge that its rights thereunder are subject to the police powers
of the Town to adopt and enforce general public local laws pursuant
to applicable law and necessary to the health, safety and welfare
of the public. A grantee shall also agree to comply with all applicable
laws enacted or adopted by the Town pursuant to such power.
B.
Any conflict between the provisions of this chapter and any other
present or future lawful exercise of the Town's police powers
shall be resolved in favor of the latter, except that any such exercise
that is not of general application in the Town of Galena, or applies
exclusively to a grantee or cable service, which contains provisions
inconsistent with the grantee's franchise agreement, shall prevail
only if upon such exercise the Town finds an emergency exists constituting
a danger to health, safety, property or general welfare or such exercise
is mandated by law.
C.
In the event that the state or federal government discontinues preemption
in any area of cable service over which it currently exercises jurisdiction
in such manner as to expand rather than limit municipal regulatory
authority, the Town may, if it so elects, adopt rules and regulations
in such area(s) to the extent permitted by law.
