On September 29, 2006, Governor Schwarzenegger signed AB 2987 which became effective January 1, 2007 establishing the Digital Infrastructure and Video Competition Act (DIVCA).

DIVCA created a state franchising scheme for cable television and eliminated license agreements such as the one the District had operated under with Volcano Telecommunications.  Since 2007 video service providers must apply to the California Public Utilities Commission for a state license to operate video service in a given area, and these providers are required to pay a “local entity” a fee for operating the video service through the public’s right of way.

On March 4, 2011, the PUC notified the District that it had issued a state franchise to Volcano Telecommunications under the DIVCA, and that it designated the District as the local entity for the purpose of that franchise.  The District’s Ordinance No. 11-02 was signed on April 9, 2011 confirming the intents and purposes of the DIVCA, authorizing collection of a state franchise fee, and the District’s responsibilities to uphold this agreement with Volcano.  The District is required to enforce the DIVCA’s customer service and privacy protection standards having to do with service interruptions, video and audible quality, and customer identity theft issues.

The District collects a franchise fee in the amount of 5% of Volcano’s gross revenues that are derived from the operation and exercise of its Franchise within Kirkwood.

Volcano is also required to continue to provide and maintain public, educational and government access channels (PEG) within the District.

The District currently does not charge an additional fee to support PEG channels; however it has the option to to establish an additional fee by Ordinance in the amount of 1% of Volcano’s gross revenues to support PEG channels. Volcano would then be entitled to pass this fee on to its customers.  Currently the District has no plans to establish this additional fee.