A. Each cable communications system grantee shall pay the City a franchise fee in an amount equal to five percent (5%) of gross revenues derived by the grantee from the operation of the cable communications system to provide cable communications services, or such other percentage amount as authorized by law. Each bill remitted to subscribers shall specifically indicate the amount of the franchise fee charged pursuant to this section.

B. Except as a franchise may otherwise specifically provide, where a grantee sells cable services and noncable services as bundled services, for purposes of franchise fee calculations the cable services will be presumed to generate the same revenues as would have been generated had the subscriber purchased cable services only.

C. If a grantee or any affiliated entity, during the term of the franchise, bundles, ties or combines the sale of some or all of its services, whether authorized or not by the franchise, and if it is necessary to separately determine gross revenues attributable to particular services in order to determine fees owed to the City, the following proportional methodology shall be applied: The combined, bundled revenues derived from a subscriber shall be allocated to each of the bundled, tied or combined services in the proportions that the standard published rate for each of the services, as realistically offered by grantee or an affiliated entity to, and paid by, subscribers who receive only the individual service, bears to the sum of such rates for all of the bundled, tied or combined services; except that a grantee may use an alternative methodology if the results of such alternative allocation are reasonably equivalent to the results which would be derived from the proportional methodology specified in this provision. Grantee shall bear any burden of proof regarding whether the actual methodology used is reasonably equivalent to the proportional methodology. For purposes of this paragraph, “reasonably equivalent” shall mean the revenue associated with any particular service resulting from the alternative allocation is within five percent (5%) of the amount resulting from the proportional methodology. If a particular service is not realistically offered on a stand alone basis, and, thus, it may be impracticable to apply the methodology for a particular service, the standard published rate of a competitor offering a comparable stand alone service may be used in the allocation subject to the approval of the City. Furthermore, for purposes of this paragraph, “realistically offered” shall mean at least five percent (5%) of subscribers for a particular service receive only that service and pay the standard published rate for that service. If a grantee offers bundled cable services and noncable services to subscribers, a grantee shall fairly and reasonably allocate revenue with regard to cable services. If a dispute arises between the parties regarding this matter, the City and a grantee will meet and discuss such matters in good faith in an attempt to reach a reasonable compromise thereof. In the event that the City believes that a grantee has unlawfully or unfairly allocated revenues between cable services and noncable services for the purpose of calculating franchise fee payments, the City and a grantee shall meet upon 15 days’ advance notice from the City to discuss the allocation methodology. If the City and a grantee cannot agree on the matter within a reasonable period of time, the City and grantee shall submit the matter to a mutually agreeable third party for mediation. The cost of the mediation shall be shared equally between the City and a grantee. If the mediation is unsuccessful or if the City and a grantee are unable to mutually agree on a mediator, then either the City or a grantee can bring the matter in King County Superior Court, or pursue any other remedies available to them at law or in equity.

D. Each person required by this chapter to remit a city tax or other in lieu fee shall file a return with the finance director on forms approved by the finance director on or before the due date. The finance director is authorized to require such further information as the director deems necessary to properly determine if the tax is being levied and collected in accordance with this chapter.

E. To prevent evasion of franchise fees, city tax, or in lieu fees, revenues of affiliates derived from the operation of the cable communications system to provide cable communications service will be treated as the revenue of the operator; but nothing herein shall be read to permit the City to charge a fee on affiliate revenues where the revenues were also included in the calculation of the revenues of a grantee.

F. Persons who provide cable services or other cable communications services to subscribers for a fee via a cable communications system and whose revenues are not included in the franchise fees specified above may be charged a fee by the City equal to five percent (5%) of the gross revenues of such person derived from the provision of such other service over the cable communications system, unless prohibited by state or federal law.

G. The fact that a fee is paid based on revenues derived from one type of service provided over a cable communications system, does not excuse an operator from its duty to pay fees and taxes imposed by the City on other types of services provided over that facility. As an example, and not as a limitation of the foregoing, a cable communications operator who pays a franchise fee on revenues derived from the provision of cable communications services must pay the fees imposed upon noncable service providers to the extent that it provides such services and consistent with applicable law.

H. General Rules for Payment of Fees.