79-07 Fees Paid by Video Service

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PLACED ON 1ST READING & REFERRED TO THE RULES & ORDINANCES COMMITTEE 9/4/07. ORDINANCE NO 7 9-0 7 BY: Antonio, Butler, Demro, Dever, FitzGerald, Madigan, Saelie. AN ORDINANCE TO TAKE EFFECT IMMEDIATELY PROVIDED IT RECEIVES THE AFFIRMATIVE VOTE OF AT LEAST FIVE MEMBERS ELECTED TO COUNCIL, OTHERWISE, IT SHALL TAKE t!FFECT AND BE IN FORCE AFTER THE EARLIEST PERIOD ALLOWED BY LAW, DETERMINING THE FEES TO BE PAID BY ANY PERSON OFFERING VIDEO SERVICE IN THE CITY PURSUANT TO A STATE-ISSUED VIDEO SERVICE AUTHORIZATION, AND AUTHORIZING THE MAYOR TO GIVE NOTICE OF THE FEE TO THE VIDEO SERVICE PROVIDER. WHEREAS, the General Assembly enacted Sections 1332.21 through 1332.34 of the Ohio Revised Code, effective September 24~ 2007, to provide a statewide "uniform regulatory framework" for the provision of cable television and/or other video service, which will substantially reduce the City of Lakewood's traditional franchising authority to regulate cable aa~d/or video service offered in the City and will eliminate the City's authority to negotiate with cable operators for financial support for Institutional Network purposes, Public, Educational and Governmental (PEG) Access television purposes and other purposes; and WHEREAS, the City has a cable television franchise agreement with Cox which expires by its Own terms on or about November 23, 2018 and pursuant to which Cox pays franchise fees in the amount of five percent (5%) of gross revenues, which are defined by the franch/se to include advertising revenues; and WHEREAS, the City has a Video Competition Agreement with the Ohio Bell Telephune Company ("AT&T") which expires by its own terms on or about July 16~ 2011, and pursuant to which AT&T provides its Project Lightspeed/"U-Verse' video service in the City and pays a fee to the City in the amount of five percent (5%) of gross revenues, which includes advertising revenues pursuant to the terms of the agreement; and WHEREAS, the City has a cable television franchise agreement with Time Warner wbich expired on or about October 20, 1997, pursuant to which Time Warner continues to provide service in the City and to pay franchise fees in the aanount of three percent (3%) of gross revenues received from subscribers in the City; and WHEREAS, R.C Section 133223 provides that a cable operator providing video service pursumat to the terms of an expired franchise on the effective date of S B 117 must apply for a video service authorization from the Director of the Ohio Departmant of Commerce within ninety (90) days from the effective date of S.B. 117; and WHEREAS~ R.C. Section 133223 also permits a cable operator with a franchise agreement that is in effect, or a video service provider with a video competition agreement that is in effect, to terminate its franchise or video competition agreement with the City, at the option of the cable operator or video service provider, by applying for a state-issued video service authorization if there is another cable operator or video service provider offering service to City residents; and WHEREAS, under R.C Section 1332.32, a video service provider that is providing service to subscribers in the City pursuant to a state-issued video service autl/orization must pay the City a video service provider fee ("VSP Fee") based on a percentage of the provider's "gross revenues" derived from providing video service in the City, not to exceed five percent (5%) of such revenues; and 512303-2