A cable communications system operator shall pay the city a franchise fee in an amount equal to five percent of gross revenues, or such other amount as may be specified in the franchise; provided, however, that if the franchise specifies a legal maximum amount, that amount shall be subject to increase should federal limits on fee payments be eliminated or changed and other cable system operators are subject to a higher fee.

    A.    Bundled Services. In the event that the cable communications system operator shall offer bundled, tied, or combined cable services (which are subject to the franchise fee) with non-cable services (which may not be subject to the franchise fee) to individual subscribers, the combined revenues from such bundled services shall be allocated consistent with the rates or prices advertised by the cable communications system operator through its marketing materials or on its published rate card. In the event the cable communications system operator does not advertise or publish separate prices for the combined services, the percentage that the price for the combined services is discounted from the regular retail rates of the individual services shall be pro-rated across all the services in the bundled package; provided, however, that the net revenues derived from services subject to mandatory tariff rates imposed by the California Public Utilities Commission (or other governmental entity having such authority) shall be deducted from the combined revenue to determine the revenue subject to the franchise fee. As an example, a cable communications system operator may offer a "bundle" of video, voice and data services for a flat fee of seventy-five dollars where the retail rate for the services purchased on an individual basis would equal one hundred dollars. Assuming that there is no service subject to the mandated tariff rate, the cable communications system operator would apply a twenty-five percent discount to each service. Thus, if the retail rate for the cable service in the bundle were fifty dollars, the cable communications system operator would recognize cable service revenue in the amount of thirty-seven dollars and fifty cents and pay a franchise fee on that revenue.

    B.    The definition of gross revenue is to be as inclusive as possible consistent with existing applicable law. If a change in federal law occurs subsequent to the effective date of the ordinance codified in this chapter, such change shall not impact the gross revenues definition in such a way to reduce gross revenues--unless the change specifically preempts the affected portion of the definition in this section. (Ord. 645 § 1 (part), 2004)