9-506

9-506. Authority to issue license;
limitations

A. For the purpose of authorizing and regulating the construction, operation and
maintenance of cable television systems, the licensing authority of a city, including a
charter city, or town for an incorporated area, or the licensing authority of the county
for unincorporated areas, either individually or jointly by intergovernmental contract,
may issue a license to any person to use public streets, roads and alleys and shall
impose conditions, restrictions and limitations upon the use of public streets, roads and
alleys and upon the construction, operation and maintenance of cable television systems.

B. Subject to the limitations of this section, a licensing authority may adopt
resolutions or ordinances implementing and controlling the license or joint license,
issue a license containing other terms and conditions and impose a license fee on gross
revenues. In addition to the limitations of this section, the license is subject to the
limits established by the communications act of 1934, as amended (47 United States Code
sections 151 through 615b) and the federal communications commission.

C. Other than the license fee on gross revenues authorized by this article and
transaction privilege taxes as provided in this subsection, a licensing authority may not
levy a tax, rent, fee or charge, however denominated, on a cable operator for the use of
the public streets, roads or alleys to provide cable service or levy a tax, fee or charge
on the privilege of engaging in the business of providing cable service in the area of
jurisdiction. Taxes, rents, fees and charges include all access channel support except
for in-kind services or payments as provided in subsection D of this section, rental,
application, construction, permit, inspection, inconvenience and other fees and charges
related to a cable operator's use of the public streets, roads and alleys. In addition,
the following apply:

1. Any transaction privilege taxes otherwise authorized by law to be levied on the
business of providing cable service or in relation to use of the public streets, roads or
alleys to provide cable service may be levied on a cable operator if the taxes are levied
only on gross revenues and the rate of the taxes is subject to paragraph 3 of this
subsection. This subsection does not authorize the imposition of transaction privilege
taxes on interstate telecommunications services.

2. The license fee and any transaction privilege taxes levied on gross revenues
constitute a franchise fee within the meaning of 47 United States Code section 542(g)(1).

3. Under no circumstances may the total of the rates of the license fee and of any
transaction privilege taxes on gross revenues levied or assessed by a licensing authority
for the privilege of providing cable service and related use of the public streets, roads
or alleys to provide cable service exceed a rate of five per cent, except during the
transition period for certain licenses as provided in subsection H of this section.

4. A cable operator shall pass on to subscribers any reduction in the amount of
fees, taxes or other charges paid by a cable operator and itemized to subscribers that
results from the implementation of the amendment to this section effective on September
21, 2006.

D. A licensing authority may not require a cable operator to provide in-kind
services, make in-kind payments or pay a fee in addition to the monetary license fee
levied or assessed as provided in this section as part of or as a condition of issuing a
license to provide cable service, except that:

1. A licensing authority may require a cable operator to provide channel capacity
to transmit programming over which the cable operator exercises no editorial control
except as authorized by 47 United States Code section 531(e). The channel capacity shall
be limited to not more than two channels of public, educational or governmental access
programming in the basic service tier of the cable television system and not more than
two channels of noncommercial governmental programming, at least one of which may be
programmed by the federal government, in the digital programming tier of the cable
television system. If channel capacity is required, the programming shall be specified
in the license and the cable operator may require that the channels regularly display an
unobtrusive logo or other suitable identifier of the cable operator as set forth in the
license.

2. A licensing authority may require a cable operator to incur costs and expenses
to provide, maintain and operate facilities and equipment of the cable television system,
including facilities and equipment for signal carriage, processing, reformatting and
interconnection:

(a) To connect the cable television system, as it may be relocated from time to
time, to transmit programming to and from existing locations of public, educational or
governmental access facilities and to allow monitoring of access programming at the
facilities.

(b) To transmit public, educational and governmental access channels to subscribers
with the same prevailing quality, functionality and identification as other channels.

3. A licensing authority may require a cable operator to provide the basic service
tier of cable service at no monthly service charge to offices and facilities of the
licensing authority.

4. The value of any channel capacity provided pursuant to paragraph 1 of this
subsection, the costs and expenses incurred pursuant to paragraph 2 of this subsection
and the value of basic service provided pursuant to paragraph 3 of this subsection may
not be offset against the license fee levied or assessed under this section.

E. This section does not prohibit a cable operator from agreeing to provide in-kind
services or make in-kind payments in the area of jurisdiction that are prohibited by
subsection D of this section if the agreement with the licensing authority is not part
of, or entered into as a condition of being issued, a new, renewed or amended license to
provide cable service. An agreement that requires in-kind cable service or payments shall
set forth the total annual fair market value of the in-kind cable service and payments,
which shall be less than or equal to and offset against the license fee levied or
assessed annually pursuant to this section. The license shall authorize the cable
operator to retain license fees and taxes collected from its subscribers in the amount of
this offset. In-kind cable services and payments include any channel capacity and all
capital costs and charges for or in support of the use of any channel capacity that the
cable operator agrees to provide under this subsection.

F. Notwithstanding subsection C of this section, a licensing authority may require
that a cable operator:

1. Bear reasonable costs that are associated with damage caused to public streets,
roads and alleys by construction, maintenance and operation of its facilities in the
public streets, roads and alleys and that are imposed on a competitively neutral and
nondiscriminatory basis in relation to costs borne by telecommunications corporations
under section 9-582, subsection C.

2. Pay fines, fees, charges or damages for breach of the terms and conditions of
the license.

G. This section does not affect the authority of a licensing authority to manage
the public streets, roads and alleys within its boundaries or to exercise its police
powers.

H. A license that is in effect on September 21, 2006, including one that is later
renewed or extended for a term that begins before July 1, 2007, is enforceable in
accordance with its terms and conditions as of July 1, 2007 and is not subject to the
provisions of the amendment to this section effective on September 21, 2006. If a license
that is in effect on September 21, 2006 is later extended or renewed for a term that
begins after June 30, 2007, the extended or renewed license is subject to the provisions
of the amendment to this section effective on September 21, 2006 and of the amendment to
this section, effective on the first day of the renewal or extension term, unless the
term begins before January 1, 2008, in which case the limitation in subsection C,
paragraph 3 of this section on the rates of the license fee and of any transaction
privilege taxes on gross revenues is:

1. Five per cent, if the gross effective rate is five per cent or less.

2. If the gross effective rate is more than five per cent, five per cent plus the
following percentage:

(a) In the first year of the extension or renewal term, the gross effective rate
minus five per cent, multiplied by two-thirds.

(b) In the second year of the term, the gross effective rate minus five per cent,
multiplied by one-third.

I. For purposes of subsection H of this section, "gross effective rate" means one
hundred per cent multiplied by the fraction in which the numerator is the sum of all
taxes, fees and charges of the licensing authority that the cable operator itemized to
subscribers and paid to the licensing authority under the license for the twelve calendar
months immediately preceding September 21, 2006 and the denominator is the cable
operator's gross revenues for that period in the area of jurisdiction.