Section 4.70.610 Initial review of basic cable rates.

1. 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.

2. Cable operator response. Within 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 material concerning the reasonableness of its rates.

a. 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:

b. If the city council takes no action within 30 days from the date the cable operator filed its basic cable rates with the city, the proposed rates will continue in effect.

a. 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 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:

b. If the city council has not made a decision within the 90 or 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.

5. 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.

6. Objections. An interested person who wishes to make an objection to the proposed initial basic rate may request the city clerk 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 clerk with the objector's name and address.

7. 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:

a. 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.

b. 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 10 percent, 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 regulations.

c. 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.

8. 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 a initial basic cable rates 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 10 percent, will prescribe the cable operator's new rates.

a. 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:

(1) 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

(2) If the proposal is not within the FCC's reasonable rate standard and the cost-of-service analysis, if any, does not justify the proposed rates, the city 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.

b. 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 7 or 8 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 pay any refund and the interest rate will be in accordance with FCC regulations as directed in the city council's decision resolution.

c. 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 objections made by other parties to the proposed rates, the resolution must state the reasons for the decision and the city council must give public notice to its decision. Public notice will be given by advertisement once in the official newspaper of the city.

10. 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. (Ord. 93/U-1502)