§ 9-217. TRANSFER OF CABLE COMMUNICATION SYSTEM FRANCHISE.

(a) This section establishes additional provisions that apply to applications for transfer approval.

(b) No transfer shall occur without prior written notice to and approval of the city.

(c) An application for transfer must contain all the information required by the CAO, by this article and all information required by any FCC transfer form. At a minimum, an application must: describe the entities involved in the transaction and the entity that will hold the franchise; describe the chain of ownership before and after the proposed transaction; show that the entity that will hold the franchise will be legally, financially, and technically qualified to do so; attach complete information on the proposed transaction, including the contracts or other documents that relate to the proposed transaction, and all documents, schedules, exhibits, or the like referred to therein; and attach any shareholder reports or filings with the Securities and Exchange Commission ("SEC") that discuss the transaction.

(d) In determining whether a transfer application should be granted, denied, or granted subject to conditions, the city may consider the legal, financial, and technical qualifications of the transferee to operate the cable communication system; any potential impact of the transfer on subscriber rates or services; whether the incumbent cable operator is in compliance with its franchise; whether the transferee owns or controls any other cable system in the city, whether operation by the transferee may eliminate or reduce competition in the delivery of cable service in the city; and whether operation by the transferee or approval of the transfer would otherwise adversely affect subscribers, the public, or the city's interest under this article, the franchise, or other applicable law. The proposed transferee shall pay all reasonable costs incurred by the city in reviewing and evaluating the applications to the maximum extent allowable by law.

(1) The applicant must be willing to comply with the provisions of this article and applicable laws; and to comply with such requirements of a franchise as the city may lawfully require;

(2) The applicant must not have had any cable system or OVS franchise validly revoked, (including any appeals) by the city within three (3) years preceding the submission of the application;

(3) The applicant may not have had an application to the city for an initial or renewal cable system franchise denied on the ground that the applicant failed to propose a cable system meeting the cable-related needs and interests of the community, or as to which any challenges to such franchising decision were finally resolved (including any appeals) adversely to the applicant, within three (3) years preceding the submission of the application; and may not have had an application for an initial or renewal franchise denied on any ground within three (3) years of the application;

(4) The applicant shall not be issued a franchise if, at any time during the ten (10) years preceding the submission of the application, applicant was convicted of fraud, racketeering, anticompetitive actions, unfair trade practices or other conduct of such character that the applicant cannot be relied upon to deal truthfully with city and the subscribers, or to substantially comply with its obligations;

(5) Applicant must have the necessary authority under California and federal law to operate a cable communication system, or show that it is in a position to obtain that authority;

(6) The applicant shall not be issued a franchise if it files materially misleading information in its application or intentionally withholds information that the applicant lawfully is required to provide.

(e) In order to obtain approval of a transfer, an applicant must show, at a minimum that: the transferee is qualified; the transfer will not adversely affect the interests of subscribers, the public, or the city; and that non-compliance issues have been resolved. No application shall be granted unless the transferee agrees in writing that it will abide by and accept all terms of this title and the franchise, and that it will assume the obligations, liabilities, and responsibility for all acts and omissions, known and unknown, of the previous franchisee for all purposes.

(f) Every franchise shall be deemed to be held in trust, and to be personal to the franchisee. Any transfer that is made without the prior approval of the city shall be deemed to impair that trust.

(g) Notwithstanding any other provision of this article, pledges in trust or mortgages of the assets of a cable communications system to secure the construction, operation, or repair of the system may be made without application and without the city's prior consent. However, no such arrangement may be made if it would in any respect under any condition: (A) prevent the cable communications system operator or any successor from complying with the franchise or applicable law; or (B) permit a third party to succeed to the interest of the operator, or to own or control the system, without the prior consent of the city. Any mortgage, pledge or lease shall be subject to and subordinate to the rights of the city under any franchise, this article, or other applicable law. (Added Ord. 2004-105, § 2, eff. 11-30-04).