Virginia Law

Article 1.1. Provision of Cable Television Services by Certain Localities.

As used in this article:

"Advanced service" means high-speed Internet access capability in excess of 144 kilobits per second both upstream and downstream.

"Cable television service" means (i) the one-way transmission to subscribers of video programming or other programming service; and (ii) subscriber interaction, if any, that is required for the selection or use of the video programming or other programming service.

"Capital costs" means all costs of providing a service that are capitalized in accordance with generally accepted accounting principles.

"Cross subsidize" means to pay a cost included in the direct costs or indirect costs of providing a service that is not accounted for in the full cost of accounting of providing the service.

"Direct costs" means those expenses of a municipality that are directly attributable to providing a cable television service and would be eliminated if such service were not provided by the municipality.

"Feasibility consultant" means an individual or entity with expertise in the processes and economics of providing cable television service.

"Full-cost accounting" means the accounting of all costs incurred by a municipality in providing a cable television service. The costs included in a full-cost accounting include all capital costs, direct costs, and indirect costs.

"Indirect costs" means any costs identified with two or more services or other functions; and that are not directly identified with a single service or function. "Indirect costs" may include cost factors for administration, accounting, personnel, purchasing, legal support, and other staff or departmental support.

"Private provider" means a private entity that provides cable television services.

"Telecommunications service" means the two-way transmission of signs, signals, writing, images, sounds, messages, data, or other information of any nature by wire, radio, lightwaves, or other electromagnetic means offered to the public generally.

"Subscriber" means a person who lawfully receives cable television services.

2003, c. 677.

A. Nothing in this article shall authorize any county or other political subdivision of the Commonwealth to (i) provide a cable television service; or (ii) purchase, lease, construct, maintain, or operate a facility for the purpose of providing a cable television service.

B. Nothing in this article shall apply to a municipality purchasing, leasing, constructing, or equipping facilities that are designed to provide services within the municipality, and that the municipality (i) uses for internal municipal government purposes; or (ii) by written contract, leases, sells capacity in, or grants other similar rights to a private provider to use the facilities in connection with a private provider offering cable television services.

2003, c. 677.

A. Except as provided in this article, a municipality shall not (i) provide a cable television service; or (ii) purchase, lease, construct, maintain, or operate any facility for the purpose of providing a cable television service to one or more subscribers.

B. For purposes of this article, a municipality provides a cable television service if the municipality provides the service:

1. Directly or indirectly, including through an authority or instrumentality acting on behalf of the municipality or acting for the benefit of the municipality; or

2. By itself, through a partnership, joint venture, or by contract, resale, or otherwise.

2003, c. 677.

A. Before a municipality may engage or offer to engage in an activity described in subsection A of § 15.2-2108.4, the governing body of the municipality shall hold a preliminary public hearing at which any interested party may appear and be heard.

B. If the governing body elects to proceed after holding the preliminary public hearing required by subsection A, the governing body shall approve the hiring of a feasibility consultant to conduct a feasibility study in accordance with § 15.2-2108.6.

2003, c. 677.

A. Upon the hiring of a feasibility consultant under § 15.2-2108.5, the governing body of the municipality shall require the feasibility consultant to:

1. Complete the feasibility study in accordance with this section;

2. Submit to the governing body by no later than 180 days from the date the feasibility consultant is hired to conduct the feasibility study the full written results of the feasibility study, and a summary of the results that is no longer than one page in length; and

3. Attend the public hearings required by § 15.2-2108.7, if held, to: (i) present the feasibility study results and (ii) respond to questions from the public.

B. The feasibility study described in subsection A shall at a minimum consider:

1. If the municipality is proposing to provide cable television services to subscribers, whether the municipality providing cable television services in the manner proposed by the municipality will hinder or advance competition for cable television services in the municipality;

2. Whether but for the municipality any person would provide the proposed cable television services;

3. The fiscal impact on the municipality of: (i) the capital investment in facilities that will be used to provide the proposed cable television services or (ii) the expenditure of funds for labor, financing, and administering the proposed cable television services;

4. The projected growth in demand in the municipality for the proposed cable television services;

5. The projections at the time of the feasibility study, and for the five years immediately thereafter, of a full-cost accounting for a municipality to purchase, lease, construct, maintain, or operate the facilities necessary to provide the proposed cable television services; and

6. The projections at the time of the feasibility study and for the five years immediately thereafter of the revenues to be generated from the proposed cable television services.

C. For purposes of the financial projections required under subdivisions B 5 and B 6 of this section, the feasibility consultant shall assume that the municipality will price the proposed cable television services consistent with subsection E of § 15.2-2108.11.

D. The governing body of the municipality shall determine whether the average annual revenues under subdivision B 6 exceed the average annual costs under subdivision B 5 by at least the amount necessary to meet the bond obligations of any bonds issued to fund the proposed cable television services based on the feasibility study's analysis for the first year of the study and the five-year projection, and separately stated with respect to the proposed cable television services.

2003, c. 677.

A. If the results of the feasibility study satisfy the revenue requirements of subsection D of § 15.2-2108.6, the governing body shall, at the next regular meeting after the governing body receives the results of the feasibility study, schedule at least two public hearings to be held at least seven days apart, but both shall be held not more than 60 days from the date of the meeting at which the public hearings are scheduled. The purpose of such public hearings shall be to allow the feasibility consultant to present the results of the feasibility study, and to inform the public about the feasibility study results and offer the public the opportunity to ask questions of the feasibility consultant about the results of the feasibility study.

B. Except as provided in subsection C, the municipality shall publish notice of the public hearings required under subsection A three times in a newspaper of general circulation in the municipality, with the first notice appearing no more than 35 days before and the third notice appearing no less than seven days before the first public hearing.

C. If there is no newspaper of general circulation in the municipality, for each 1,000 residents the municipality shall post at least one notice of the hearings in a conspicuous place within the municipality that is likely to give notice of the hearings to the greatest number of residents of the municipality. The municipality shall post the notices at least seven days before the first public hearing required under subsection A is held.

D. After holding the public hearings required by this section, if the governing body of the municipality elects to proceed, the municipality shall adopt by resolution the feasibility study.

2003, c. 677; 2023, cc. 506, 507; 2024, cc. 225, 242.

A. Before a municipality may offer cable television service, the governing body of the municipality shall by a majority vote call an election on whether or not the municipality shall provide the proposed cable television services.

B. When under subsection A the governing body calls an election, the election shall be held:

1. At the next municipal general election or as provided in Article 5 (§ 24.2-681 et seq.) of Chapter 6 of Title 24.2 at a local special election the purpose of which is authorized by this section; and

2. In accordance with the law of Virginia regarding elections in Title 24.2 and as provided in this section.

C. The notice of the election shall include with any other information required by law:

1. A summary of the cable television services that the governing body of the municipality proposes to provide to subscribers residing within the boundaries of the municipality;

2. The feasibility study summary under § 15.2-2108.6;

3. A statement that a full copy of the feasibility study is available for inspection and copying; and

4. The location in the municipality where the feasibility study may be inspected or copied.

D. The ballot at the election shall pose the question substantially as follows: "Shall this municipality provide cable television service to the inhabitants of the municipality?"

E. The ballot proposition shall not take effect until submitted to the electorate and approved by the majority of those voting on the ballot.

2003, c. 677.

A. A municipality that provides a cable television service under this article shall:

1. Establish an enterprise fund to account for the municipality's operations of a cable television service; and

2. Adopt separate operating and capital budgets for the municipality's cable television services.

B. A municipality that provides a cable television service under this article shall not:

1. Transfer any appropriation or other balance in any enterprise fund established by the municipality under this section to another enterprise fund; or

2. Transfer any appropriation or other balance in any other enterprise fund established by the municipality to any enterprise fund established by the municipality under this section.

The restrictions on transfers described in this subsection do not apply to transfers made by a municipality between other enterprise funds established by the municipality.

C. A municipality authorized pursuant to subsection E of § 56-265.4:4 to provide cable television service shall:

1. Establish a separate department within an enterprise fund to account for the municipality's operations of a cable television service. This department may share a common balance sheet with other telecommunications and communications services, but the income statements must be stated separately; and

2. Adopt separate operating and capital budgets for the municipality's cable television services.

D. A municipality authorized pursuant to subsection E of § 56-265.4:4 to provide cable television service shall not transfer funds from other departments to the cable television department, but the municipality may make interdepartmental loans at market rates, upon such terms and conditions as would prevail from a private lender.

2003, c. 677.

A. The governing body of a municipality may by resolution determine to issue one or more bonds to finance the capital costs for facilities necessary to provide to subscribers a cable television service. Such resolution shall: (i) describe the purpose for which the indebtedness is to be created and (ii) specify the dollar amount of the one or more bonds proposed to be issued.

B. A bond issued under this section shall be secured and paid for solely from the revenues generated by the municipality from providing cable television services with respect to bonds issued to finance facilities for the municipality's cable television services. Notwithstanding the foregoing, a municipality authorized under subsection E of § 56-265.4:4 to provide cable television services shall not be subject to the requirement that it secure a bond with solely the revenues generated by the municipality from providing cable television services, and such municipality shall repay the bond indebtedness in a fashion that reflects a reasonable pro rata allocation of such indebtedness by enterprise fund or department.

C. A municipality shall pay that portion of the origination, financing, or other carrying costs associated with one or more bonds issued under this section associated with cable television solely from the funds of the cable television department.

2003, c. 677.

A. A municipality that provides a cable television service shall comply with all terms and provisions of the Cable Communications Policy Act of 1984 (47 U.S.C. § 521 et seq.) and the regulations issued by the Federal Communications Commission under such Act that would be applicable to a similarly situated private provider of cable television services.

B. A municipality may not cross subsidize its cable television services with:

1. Tax dollars;

2. Income from other municipal or utility services;

3. Below-market rate loans from the municipality; or

4. Any other means.

C. A municipality shall not make or grant any undue or unreasonable preference or advantage to itself or to any private provider of cable television services.

D. A municipality shall apply, without discrimination as to itself and to any private provider, the municipality's ordinances, rules, and policies, including those relating to (i) obligation to serve; (ii) access to public rights of way and municipal utility poles and conduits; (iii) permitting; (iv) performance bonding; (v) reporting; and (vi) quality of service.

E. In calculating the rates charged by a municipality for a cable television service:

1. The municipality shall include within its rates an amount equal to all taxes, fees, and other assessments that would be applicable to a similarly situated private provider of the same services, including federal, state, and local taxes; franchise fees; permit fees; pole attachment fees; and any similar fees; and

2. The municipality shall not price any cable television service at a level that is less than the sum of: (i) the actual direct costs of providing the service; (ii) the actual indirect costs of providing the service; and (iii) the amount determined under subdivision E 1.

F. A municipality that provides cable television services shall comply with the provisions of Title 47 of the Code of Federal Regulations regarding rate and service changes.

G. A municipality shall offer to provide or provide cable television services to only those subscriber locations within either (i) the municipality's electric utility service area as it existed on January 1, 2003, or (ii) the area, as of January 1, 2003, in which the municipality was providing local exchange service or Internet service over telecommunications facilities owned by the municipality, provided that a cable television franchise from any jurisdiction other than the municipality authorized herein shall be required for any service outside the municipality's boundaries.

H. A municipality shall keep accurate books and records of the municipality's cable television services. A municipality shall conduct an annual audit of its books and records associated with the municipality's cable television services, such audit to be performed by an independent auditor approved by the Auditor of Public Accounts. Such audit shall include such criteria as the Auditor of Public Accounts deems appropriate and be filed with him, with copies to be submitted to each private provider that holds a franchise to offer service within the municipality. If, after review of such audit, the Commonwealth's Auditor of Public Accounts determines that there are violations of this article, he shall provide public notice of same.

I. Notwithstanding any other provision of law, the Auditor of Public Accounts shall not disclose those portions of any comprehensive business plan that reveal marketing strategies of a municipal cable television service except as necessary to perform his duties and such information shall be otherwise exempt from public disclosure and not subject to the provisions of the Virginia Freedom of Information Act (§ 2.2-3700 et seq.).

2003, c. 677; 2004, c. 586.

A. No municipality shall exercise its power of eminent domain to condemn any plant or equipment of a private provider for the purpose of providing to a subscriber a cable television service.

B. No municipality, for the purpose of providing to a subscriber a cable television service, shall exercise its power of eminent domain to condemn real property, whether in whole or in part, or to obtain an easement.

2003, c. 677.

A municipality that provides a cable television service shall adopt an ordinance governing the quality of service the municipality shall provide to its subscribers, which standard of quality shall be no more favorable or less burdensome to the municipality than the standard of quality applied to any other private providers within the municipality.

2003, c. 677.

A private provider may file an action against a municipality in the circuit court having jurisdiction over the municipality for equitable relief, including a restraining order and injunction, for a violation of the provisions of this article. At least 10 days before filing such action the private provider shall file a written notice thereof with the municipality.

2003, c. 677.

A municipality that provides cable television service shall enact an ordinance establishing a procedure for the filing and resolution of complaints relating to the municipality's provision of cable television service. Such ordinance shall comply with Title 47 of the Code of Federal Regulations and shall be no more favorable or less burdensome to the municipality than such procedure applicable to any private provider providing service in the municipality.

2003, c. 677.

A municipality that provides cable television service shall provide to a private provider the same information required to be filed with the municipality by that private provider under the terms of its franchise.

2003, c. 677.

A municipality that provides a cable television service is subject to applicable antitrust liabilities and immunities from liabilities under the federal Local Government Antitrust Act of 1984 (15 U.S.C. § 34 et seq.).

2003, c. 677.

Repealed by Acts 2016, cc. 724 and 725, cl. 4, effective April 8, 2016.