ORDINANCE NO. 0-003-2022
CITY OF SOUTHSIDE
COUNTY OF ETOWAH
STATE OF ALABAMA
AN ORDINANCE GRANTING A FRANCHISE TO SPECTRUM SOUTHEAST, LLC, L/K/A CHARTER COMMUNICATIONS, TO CONSTRUCT, OPERATE, AND MAINTAIN A CABLE SYSTEM IN SOUTHSIDE, ALABAMA SETTING FORTH CONDITIONS ACCOMPANYING THE GRANT OF THE FRANCHISE; PROVIDING FOR REGULATION AND USE OF THE SYSTEM AND THE PUBLIC RIGHTS-OF-WAY AND PRESCRIBING PENALTIES FOR THE VIOLATION OF THE PROVISIONS HEREIN;
The City Council of Southside, Alabama ordains:
STATEMENT OF INTENT AND PURPOSE
City intends, by the adoption of this Franchise, to bring about the further development of a Cable System, and the continued operation of it. Such development can contribute significantly to the communication needs and desires of the residents and citizens of City and the public generally. Further, City may achieve better utilization and improvement of public services and enhanced economic development with the development and operation of a Cable System.
Adoption of this Franchise is, in the judgment of the City Council, in the best interests of City and its residents.
CABLE TELEVISION FRANCHISE AGREEMENT BETWEEN CITY OF SOUTHSIDE, ALABAMA AND SPECTRUM SOUTHEAST, LLC, L/K/A CHARTER COMMUNICATIONS
The purpose of this summary is to highlight some of the key provisions that were negotiated on behalf of the City with Spectrum Southeast LLC, L/K/A Charter Communications (“Charter”) to be included in a new Cable Television Franchise Agreement. The following provisions are proposed for the City’s new Agreement:
The City can audit Charter for a period of 6 years from the date a video service fee is received and shall be required to pay the City in addition to the payment, or sum due, interest from the due date at an annual rate equal to the state legal interest rate of 6% annually (Alabama Code § 8.8.1). Additionally, if any audit indicates a Franchise Fee underpayment of seven percent (7%) or more during the entire period reviewed, Charter shall, subject to Applicable Law, assume all reasonable documented costs of such audit, and pay same upon demand by the City.
Earlier this year, the Sixth Circuit Court of Appeals issued its decision regarding the FCC’s August 2019 Third Report and Order (“621 Order”). The 621 Order revised the FCC’s rules to provide that non-monetary, cable-related contributions from cable operators (such as for the cost of PEG transport and free service to schools and government buildings) must be counted towards the 5% cap on franchise fees. What this means is the City can no longer require Charter to provide free cable services to City owned buildings as the value of that service would be offset against the franchise fees the City receives therefore the new franchise does not contain a requirement for Charter to provide free services to city owned buildings such as City Hall, police, fire stations and public schools.
The City conducted an audit of the franchise fee payments made by Charter for the period from July 1, 2015 to June 30, 2021 (the “Audit Period”) which resulted in the city recovering $5,325.00 for underpayment of franchise fees. The city will realize an increase of approximately $1,000.00 more annually from revenue sources that were previously not paid on.