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b. The benefits that may accrue to subscribers as a result of cable system competition, such as lower rates and improved service. c. The disadvantages that may result from cable system competition, such as the requirement for multiple pedestals on residents' property, and the disruption arising from numerous excavations within the public rights-of-way. (2) The city may require that any new grantee be responsible for its own underground trenching and the associated costs if, in the city's opinion, the streets or public ways in any particular area cannot reasonably accommodate additional cables. Section 3: Division 6 is added to Chapter 15 of the Santa Ana Municipal Code to read in full as follows: Chapter 15. Division 6. Regulation of State Video Franchise Holders Section 15. 270 Purpose and Authority This Chapter is designed to regulate video service providers holding state video franchises and operating with the City of Santa Ana. As of January 1, 2007, the State of California has the sole authority to grant state video franchises pursuant to the Digital Infrastructure and Video Competition Act of 2006 ("the Act"). Pursuant to the Act, the City of Santa Ana shall receive a franchise fee and a fee for public, educational and government (PEG) purposes from all state video franchise holders (hereinafter "State franchisee") operating within the City. Additionally, the City has the responsibility to establish and enforce penalties, consistent with state law, against all State franchisee's operating within the City for violations of customer service standards set by the State. Section 15.271 State Video Franchise and PEG Fees a. A State franchisee that offers video service within the boundaries of the City of Santa Ana, shall calculate and remit a state franchise fee equal to five percent (5%) of the gross revenue of that State franchisee. b. A State franchisee that offers video service within the boundaries of the City of Santa Ana shall calculate and remit, a fee equivalent to one percent (1%) of that State franchisee's gross revenue, for the support of public, educational and governmental (PEG) access facilities and activities within the local franchise service area. c. The state franchise fee and PEG support fee shall be remitted to the City of Santa Ana on a quarterly basis within 45 days after the end of each quarter Ordinance No. NS-2774 Page 6 of 9