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. r <br />City Manager <br />October 25, 1978 <br />Page 2 <br />The proposed ordinance would therefore limit the Municipal Code regulations <br />of CATV to (a) establishing the requirement for a franchise to operate <br />a CATV system in the City, and (b) establishing the procedure for <br />receiving and deciding CATV franchise applications. The details of <br />any particular CATV franchise would thereafter be set by a second <br />ordinance granting the specific franchise for a specified term of <br />years, once the nature of the applicant's proposal is known. <br />(We have prepared a draft franchise ordinance for Six Star Cablevision. <br />No action is requested on this second ordinance at the present time, <br />but it is available for Council review.) <br />FINANCIAL IMPACT There is no financial impact from the proposed <br />ordinance revising the Municipal Code CATV franchise regulations. If <br />in the future a franchise is granted, it will be a source of City <br />revenue, since the City will be entitled to a license fee (2% of gross <br />income is proposed in the draft franchise ordinance for Six Star). On <br />the other hand, if the City should undertake to regulate a CATV operator's <br />rates, services, and business practices (which is not proposed), the <br />City would have to meet the cost of administering such regulations out <br />of the franchise fee revenues. <br />RICHARD E. LAY <br />Deputy City Attorney <br />REL:ms <br />2 <br />