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CITY OF SAN LEANDRO <br />STAFF REPORT <br />DATE: March 1, 2010 <br />TO: Stephen Hollister, City Manager <br />FROM: Jacquelyn Diaz, Deputy City Managey,/ <br />SUBJECT PROJECT/PROJECT DESCRIPTION: <br />APPROVED AND <br />FORWARDED <br />TO CITY COUNCIL <br />~~.. <br />Stephen Hollister <br />City Manager <br />AN ORDINANCE AMENDING THE SAN LEANDRO MUNICIPAL CODE TO ADD A <br />NEW CHAPTER 5-7 TO IMPLEMENT THE PROVISIONS OF THE DIGITAL <br />INFRASTRUCTURE AND VIDEO COMPETITION ACT (DIVCA) OF 2006 <br />SUMMARY AND RECOMMENDATION <br />Staff recommends City Council approval of the proposed ordinance implementing the provisions <br />of the Digital Infrastructure and Video Competition Act (DIVCA) of 2006 and thereby adding a <br />chapter to the San Leandro Municipal Code. Upon adoption, state franchise holders (video <br />service providers) shall pay to the City a Public, Education, and Government (PEG) fee equal to <br />1 % of gross revenues. <br />BACKGROUND <br />The Digital Infrastructure and Video Competition Act (DIVCA), also known as Assembly Bill <br />2987, was adopted in 2006 and became effective on January 1, 2007. The goal of the legislation <br />was to promote a fair and level playing field for all competitors in the video services market, <br />given the evolution of technology from traditional television service and community antenna <br />television system (CABLE) to wireless telecommunications and broadband Internet access. Prior <br />to the legislation, local jurisdictions had leeway in negotiating the terms of franchise agreements <br />for video service, including amounts to be paid under the franchise, the number of Public <br />Education and Government (PEG) channels, support for public access programming to air on the <br />PEG channels, and free cable provided to public locations such as schools, libraries, and other <br />municipal buildings. This required video service providers to negotiate individually with each <br />jurisdiction in which they desired to provide service. <br />With the state legislation, local jurisdictions are precluded from imposing local franchise <br />requirements on video service providers. Instead, DIVCA requires all video service providers to <br />obtain a state franchise from the California Public Utilities Commission (CPUC). The legislation <br />further establishes the amounts of franchise fees and PEG fees to be paid to local jurisdictions. <br />AT&T was granted a state franchise to provide video service on March 30, 2007, and Comcast <br />was granted a state franchise on January 2, 2008. <br />Under DIVCA, the CPUC retains responsibility for administration of certain provisions of the <br />state franchises, including the enforcement of built-out and non-discrimination provisions. <br />Administration of the other provisions of DIVCA are designated to local government control, <br />